Does China lack innovation?

Maxencius (US)

To create an innovation economy, China must:

- Change its education system. Currently, it relies intensively on memorizing knowledge, without teaching children how to exert a critical point of view, to compare ideas and argue logically.

- Reform the way the state promotes clever individuals. Currently, the only meritocratic way to success is through the Gaokao, which mainly ignores creativity, relies too much on luck and is easily bypassed by wealthy individuals who can send their children abroad in case they did not get into a good enough university.

- Change the hierarchical organization of firms, where bosses are kinglets and their employees do not try to explain why they may have a different point of view, because of the risk for the boss to loose face if he's wrong. This creates a lot of inefficiencies in companies, and prevents new ideas to emerge.

- The State needs to retreat from its control-freak habits in the economy. Too much successful companies are bought because of their success, and too many companies are still in its hands without any reason. Those companies, relieved from market pressure and having an easy access on credit, do not have a lot of incentives to innovate.

- China should stop subsidizing heavy-polluting activities and put a price on environmental damage. Innovation is better stimulated under constraints, and depleting environmental resources has anyway a very high opportunity cost, jeopardizing the country's future. Imposing more order and regulations would promote cost reduction, and help the country's economy to focus on cleaner ways to grow.