A Technological China

ISABELLA CHENG introduces the November 2018 Domestic Theme.

In 2007, Apple released its first iPhone. If we compare it to our iPhones today, it’s astonishing that this little gadget was so revolutionary—the original iPhone had no third-party apps, no GPS, and no video recording capabilities. Fast forward just ten years later, the success of a product as primitive as the original iPhone is unimaginable. Technological advancement is moving forward at breakneck speed. This is not just in terms of hardware like slimmer phones and computers but also more innovative processes like the advent of Uber’s ride-share and smart speaker home assistants.

It is no secret that the majority of the companies driving this technological growth are American. Think of all the household names: Apple, Amazon, Google, Facebook. As a recent 2018 Internet Trends Report shows, 11 of the world’s top 20 internet leaders measured in market value are American companies. While this is certainly a celebration for America, the inevitable question must be asked: who are the other 9 leaders? Who are the competitors blocking American companies from completely dominating the top 20? As so many answers seem to be these days, it’s China.

China’s recent emergence as a worldwide leader in technology seems to be a true underdog story. China was a leader of technological innovation until the early Qing Dynasty, contributing what is common referred to as the “Four Great Inventions”: paper-making, printing, the compass, and gunpowder. Yet, it was one of the losers of the “Great Divergence”, a term coined by historian Kenneth Pomeranz, detailing the economic and technological leap Europe had over the rest of the world. The reasons for this divergence are complex and still debated. Regardless, from the late Qing onward, constant political and social instability submerged China into almost a century of economic and technological stagnation. During the Cultural Revolution, universities shut down and academic research came to a halt. As an article from the Southeast Review of Asian Studies points out, while state-sponsored research continued, this was done in a non-theoretical way and really only benefited the trickle down of rural peasants finally having access to science and technology for the very first time.  Still, “future decades would witness a gap between science and talent among professionals” as the turmoil of the Cultural Revolution scattered China’s most brilliant brains into the countryside to be re-educated through hard labor and, in some cases, emotionally pushed them into taking their own lives.

All of this changed following the death of Mao Zedong. From 1979-2001, Deng Xiaoping’s Four Modernizations reform program leveraged technology to pioneer China’s shift from socialist economic planning to a market-driven system. Colleges and universities reopened and these centers of research began to develop and transfer technology to state-owned enterprises. As Deng proclaimed in 1978 to the National Science Conference, “The crux of the Four Modernizations is the mastery of modern science and technology. Without the high-speed development of science and technology, it is impossible to develop the national economy at a high speed.” And it seems as if China has done almost just that, developing both its economy and science and technology at high speed. In 2017, China overtook Japan as the number two patent filer in the world, with 13.4% annual growth. China now spends 2.1% of its GDP on research and development (R&D). While it does not yet match US levels of 2.75%, China spent just 0.7% of its GDP on R&D in the 1990’s. If China follows this trajectory, it could easily rival the US for the spot of number one innovator.

To start off this month’s theme, we will first investigate the case of Chinese investment in foreign technology. Investment in foreign tech is actively supported by the Chinese government, inherently creating a conundrum where foreign powers, such as the US, become even more suspicious of China’s motives. How should China rebalance accordingly and reevaluate its strategy for foreign investment moving forward? Competing for broader global recognition is all good and well, but it is just as important to consider what technology truly offers to its users. What does the product bring and is it actually innovative? Does it disrupt the space in a positive way? And ultimately, does it make life better? These are a few of the questions that will guide us this month as we dive into the vibrant and evolving Chinese technology industry. Throughout this month, we will also have the opportunity to dive deeper into China’s domestic tech scene by learning more about the successes of homegrown companies and their plans for the future. Familiarizing ourselves with the potential of China’s tech industry will allow us to better understand how technology fits into China’s industrial policies, such as Made in China 2025. Made in China 2025, a comprehensive plan issued in 2015 by Premier Li Keqiang to “upgrade Chinese industry”, will be strongly reliant on the maturation of China’s AI and Internet capabilities. Looking to surpass the US as the world leader in AI, how exactly does China plan on making this a reality and will this plan ultimately bring about international scientific collaboration or only further alienate world powers? Finally, we consider what China’s dynamic tech industry brings to the international stage. While China is a lucrative market of almost 1.4 billion consumers for international companies to enter, it has been heavily accused of cyber-hacking and forcibly requiring technology transfer from companies who wish to make money on Chinese soil. Allegations of intellectual property theft have been used by the White House as the basis for levying trade tariffs against China. Do these allegations have any weight to them? How will these allegations strain US-China relations past solely economic considerations?

This year, Chinese companies have dominated tech IPOs in US markets, making it an exciting time to be studying China’s technological growth. As with every other intriguing facet of China’s society, the tech industry brings an immense number of challenges and opportunities to both the domestic and international realms. Perhaps another meteoric rise is waiting for China’s fledgling tech companies—all this will depend on China’s actions and reactions.

Isabella Cheng is a student at Yale University. Contact her at isabella.cheng@yale.edu.

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