Why China's makeover plans to go from 'photocopier' to 'creator' have gone astray
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Chinese progress is not driven by ingenuity, for the country is sometimes called the "world's photocopier"
China's growth story, in a nutshell, is built on imitation worth billions of dollars. Chinese progress is not driven by ingenuity, for the country is sometimes called the "world's photocopier". All things available in the West have a Chinese variant, which is usually cheaper, less durable, and indistinguishable at first glance.
For a long time, patent laws in China permitted the replication of products. In the name of import substitution, Western duplicates flooded the market.
After Deng Xiaoping opened the floodgates in the late 70s, foreign producers were able to access the untapped Chinese market. With the investment, China went from being a photocopier to a factory, but there was still no ingenuity. Under Xi Jinping, China wants to shed this tag and emerge as original and inventive - qualities that are not easily enforceable.
What is China's solution?
China is scooping up many patents and trademarks through forced technology transfers - a simple, shrewd, and extremely unfair practice whereby the government offers a condition to a foreign firm attempting to enter the Chinese market. Essentially, China asks companies to share technology in exchange for access, which was also one of the reasons for the trade war with the US.
Since the mid-1980s, China has a patent system that is not largely enforced. In most democracies, enforcing a law like this isn't an issue. But behind China's great wall of secrecy, laws are more political than judicial. China's makeover plan to go from a copier to a creator fits in perfectly with Xi Jinping's larger global ambitions - to go from an ally to an alliance leader; from an aspiring power to a world-beating hegemon.
Also read: Is China really leading in the global war for patents?
But there's a catch. China's makeover as a creator is largely cosmetic 20 per cent of products in China are counterfeit. It's so popular that they even have a word for it called "Shanzhai". China will have to start from the bottom to reinvent itself as a creator. China loves singularity - one leader, one party, and one culture and China does not have an entrepreneurial culture.
The country doesn't have room for diversity of thought but exceptions remain, like Alibaba's Jack Ma and Tencent's Pony Ma. But instead of celebrating them, Beijing wants to make an example out of them. After Jack Ma criticised Chinese regulators, Jack is now out of China's top three richest men.
Instead of creating world-beating ideas, China has been content with copying them. Some companies like Huawei have had limited success. But since Chinese companies come with the baggage of Chinese politics, they are never welcomed with open arms. Xi Jinping is on a mission to change this, but what if he is the problem?
The Chinese have invented an array of things from gunpowder, the compass, paper currency, and long-distance banking. They never had a problem with innovation until the Communist regime came to power.