China’s Command Innovation

http://ggc-mauldin-images.s3.amazonaws.com/uploads/pdf/TFTF_Sept_07_2018.pdf



...When I say “consequential,” I mean they can be either good or bad. We’ve seen both and will continue doing so. Along with Worth Wray, I wrote a 2015 anthology on China called A Great Leap Forward? So this is not my first deep-dive into China.

Even so, periodically I like to step back and assess where we are in this massive change, and that will be my focus for the next three letters. 

...Beijing sees this same data and realizes its leadership is not guaranteed. China needs to
develop its own technology, and doing so requires research, and research requires capital. So,
through a combination of government edicts and profit-seeking, it is right now in a major effort to
build its own innovation economy.
The plan isn’t complicated. To summarize, “Throw money at it.”

...As of 2016—before the numbers Peter lists there—China VC investment had roughly caught up
to US level. Now it is probably ahead.

...It is common knowledge that China has produced more scientists and engineers for decades
than the West has combined. Many of us had suspicions about the qualities of the universities
and their degrees. They couldn’t be as good as ours, could they? Well, we’re beginning to see
the answer to that, and it turns out they were comparable and possibly even better in some
areas.

...Looking at it another way, China has 15% of global GDP but produces more than a third of the
scientific papers. It seems those university degrees are beginning to pay off in actual research....