China’s Innovation Challenge


Following a challenging economic climate, the importance for China to focus on innovation is greater than ever. Shedding the country’s image of being the go to location for cheap manufacturing won’t be easy. Continuous growth within the specialised manufacturing sector is helping. However, over the long term, the country needs even further technology advances.

Article Highlights

  • Innovation is the only thing that determines long-term economic growth.
  • Innovation benefits the ageing population in China.
  • Innovation means less strain on public services.

The term innovation can be difficult to describe. Many assume it simply means the next new product or idea. China’s context of innovation is closer related to a wider view of the term. “The application of better solutions that meet new requirements, inarticulate needs, or existing market needs”. This definition encompasses new products or services, that achieve the end goal in a more effective manner. Innovation relates by the same token to business models in a more liberal view of the term.

The Benefits for Innovation in China

Innovation and economic growth has a positive correlation. By being at the forefront of innovation a country can be leaders of emerging industries. Innovation can create jobs, can set a country apart from competitors and increase wages amount citizens.

New products are continually emerging from factories within China. Benefits of new products themselves are marginal. Globalisation has seen worldwide changes in economic pressures. Competition is on a global scale. Countries now worry further afar than their domestic borders.

China creating a business environment that encourages innovation to foster and flourish will drive industries. Job security would be increased. China could cement itself as a leader in future markets. In fact, innovation does not simply have to mean increased profits. For instance, public services would benefit from found efficiency gains. Innovation within sectors like healthcare and education will result directly in net gains to all citizens.

The Ageing Chinese Population

Innovation may just be the answer to China’s ageing population. China would have the worlds most aged population by 2030 claims on thinktank. 2050 could see 30% of China’s population being senior citizens.
Profound economic implications result from changes in these demographics. Policies, social security and health care will still need to be adequate to support such a demographic. Currently, China and many nations globally struggle to address the needs of an ageing population.

Through innovation and technological advancements, these needs can be better met. A futuristic vision by and large contains a world without jobs. An alternative to the traditional 9-5 shift. Citizens may buy a share in an autonomous machine. Similar to a stock market share, this slice of ownership could result in a regular income stream like dividends. Pensions would no longer be required. Arguably a welcome break from one of the biggest costs to 1st world countries.

Business process innovation could greatly benefit hospitals. Services are constantly in-demand, and the elderly depend on these the most. Efficiency increases and cost savings could result in more citizens being treated. Resulting in an increase in age expectancy.


In conclusion, innovation in China can solve many upcoming problems. However innovation is not something that happens overnight. Luckily the government recognises this factor. Investments within technology and encouraging innovation are forthcoming. Presumably, noticeable gains will result from the investment. However, money does not always solve all problems. The Chinese government have historically been capable of tackling challenges. With a stagnating growth rate, innovation should be top of the agenda.


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