China is positioned to evolve from an imitator to an innovator, following a path blazed by its Asian Tiger neighbors. It has already shown itself capable of leading the world in a number of advanced technologies such as supercomputers and high-speed rail.
China’s potential for innovation threatens the market share of the United States and allied nations in high-value-added, advanced industries, which are important to U.S. prosperity and security.
In 2010, China’s innovation and advanced-industry capabilities were approximately 58 percent of U.S. capabilities on a proportional basis (accounting for size of its economy, population, etc.) and 78 percent of U.S. output in absolute terms.
By 2020, China’s innovation and advanced-industry capabilities increased to roughly 75 percent of U.S. capabilities on a proportional basis and 139 percent in absolute terms.
China made notable progress in most of the innovation indicators the Information Technology and Innovation Foundation (ITIF) examined and in each indicator group, with its greatest progress coming in innovation outputs.
China still faces economic challenges. But its progress in a wide range of innovation indicators suggests that it is on the path to overtake the United States in innovation and advanced-industry output—in both proportional and absolute terms.
