Review of “China’s Path to Innovation” by Xiaolan Fu

To date there are few research monographs that go beyond picking out striking cases of innovative companies. We clearly also need systematic analyses of China’s growing innovative capacity. For this reason, Xiaolan Fu’s book China's Path to Innovation (Cambridge University Press, 2015) is a welcome addition to the literature. Fu is Professor of Technology and International Development at Oxford and has written about innovation in China for more than ten years. China's Path to Innovation has 16 chapters (Table of Contents).  The book provides an excellent overview of scholarly literature on the development of Chinese innovative capacities. It deserves to be in the library of anyone working on China’s innovative capacity.  Read my full review on economic-evolution.net.

Are recent crackdowns on VPNs and Academic Freedom Bad for China’s Ability to Innovate?

I am co-editing with Arie Lewin and Martin Kenney a Cambridge University Press book on the future of Chinese innovative capability. The opening of China in since 1978 has created stunning economic achievements. My hope was that China would prove that you do not necessarily need liberal democracy to continue its economic development and reach GDP per capita figures that are closer to the most advanced countries in the world.

But I am getting more nervous about the future of China after reading this series of articles.

  1. China Tells Schools to Suppress Western Ideas, With One Big Exception
  2. Ideology Matters: Parsing Recent Changes in China’s Intellectual Landscape
  3. China Further Tightens Grip on the Internet
  4. New Rules in China Upset Western Tech Companies

Victor Shih wrote fascinating book on how China has been able to keep inflation under control

I am presently reading Victor Shih's Cambridge University Press book "Fraction and Finance." In it he explains how despite periods of high monetary growths and inflation, China's politics allowed hyper-inflation to broad down again. China never experienced the 4000 percent inflation in Ukraine after communism. I publish here some interesting comparative data from the book. 

Surprise: In China electric toothbrushes are twice as expensive as in USA

The other day I forgot my electric toothbrush in my London hotel room. I figured that because of the great competition in many Chinese products markets, I would be able to buy one more cheaply when I would arrive in China the following week. I had read about price wars in microwave ovens, TV sets, etc.  And did not Chinese manufacturers bring down theprice of solar panels to such a low level that Westerns firms went out of business in larger numbers in the past few years.  So yesterday I set out to buy myself an electronic toothbrush. The prices at a large electronics store in my neighborhood in Shanghai was shockingly high. Next I went online. Even online the best deal I could find was substantially more expensive then in USA.  The same electric toothbrush (Oral-B Professional Healthy CleanPrecision 1000) on Amazon  USA  costs $39.99; on Amazon China it sells for US$  78.28 (RMB 480).   No wonder I am told exchange students are being asked to bring electronic gadgets back from abroad. I wonder if I can find any high quality Chinese imitations, as is the case in smartphones. In the meantime I bought the expensive one on Amazon.cn. 


Economist.com explains how Chinese Economic Success has called into question benefits of democratic rule

Here is a short excerpt  from an Essay "What's gone wrong with democracy"  in the March 1st Economist

Meanwhile, the Chinese Communist Party has broken the democratic world’s monopoly on economic progress. Larry Summers, of Harvard University, observes that when America was growing fastest, it doubled living standards roughly every 30 years. China has been doubling living standards roughly every decade for the past 30 years. The Chinese elite argue that their model—tight control by the Communist Party, coupled with a relentless effort to recruit talented people into its upper ranks—is more efficient than democracy and less susceptible to gridlock. The political leadership changes every decade or so, and there is a constant supply of fresh talent as party cadres are promoted based on their ability to hit targets.

China’s critics rightly condemn the government for controlling public opinion in all sorts of ways, from imprisoning dissidents to censoring internet discussions. Yet the regime’s obsession with control paradoxically means it pays close attention to public opinion. At the same time China’s leaders have been able to tackle some of the big problems of state-building that can take decades to deal with in a democracy. In just two years China has extended pension coverage to an extra 240m rural dwellers, for example—far more than the total number of people covered by America’s public-pension system.

Many Chinese are prepared to put up with their system if it delivers growth. The 2013 Pew Survey of Global Attitudes showed that 85% of Chinese were “very satisfied” with their country’s direction, compared with 31% of Americans. Some Chinese intellectuals have become positively boastful. Zhang Weiwei of Fudan University argues that democracy is destroying the West, and particularly America, because it institutionalises gridlock, trivialises decision-making and throws up second-rate presidents like George Bush junior. Yu Keping of Beijing University argues that democracy makes simple things “overly complicated and frivolous” and allows “certain sweet-talking politicians to mislead the people”. Wang Jisi, also of Beijing University, has observed that “many developing countries that have introduced Western values and political systems are experiencing disorder and chaos” and that China offers an alternative model. Countries from Africa (Rwanda) to the Middle East (Dubai) to South-East Asia (Vietnam) are taking this advice seriously.

China’s advance is all the more potent in the context of a series of disappointments for democrats since 2000. The first great setback was in Russia. After the fall of the Berlin Wall in 1989 the democratisation of the old Soviet Union seemed inevitable. In the 1990s Russia took a few drunken steps in that direction under Boris Yeltsin. But at the end of 1999 he resigned and handed power to Vladimir Putin, a former KGB operative who has since been both prime minister and president twice. This postmodern tsar has destroyed the substance of democracy in Russia, muzzling the press and imprisoning his opponents, while preserving the show—everyone can vote, so long as Mr Putin wins. Autocratic leaders in Venezuela, Ukraine, Argentina and elsewhere have followed suit, perpetuating a perverted simulacrum of democracy rather than doing away with it altogether, and thus discrediting it further.