Global Technology Leadership: The Case of China

Abstract

Over the last century and a half, global technological leadership has shifted from Great Britain to the United States. In this paper we argue that China is positioning itself to assume global leadership in technology within the coming few decades. We identify three sources of competitive advantage for China’s ascent in the global technology stakes: its massive domestic market, its centralized power and willingness to employ state-sponsored industrial policy and government support, and the process of globalization that continues to transform markets worldwide. After acknowledging skeptical views of China’s capacity to achieve global technology leadership, we survey the present state of affairs and assess its prospects for growth based on statistical evidence and multiple illustrative examples. We argue that the three sources of competitive advantage we explicate offer China a path to imminent global technological leadership.

Keywords: technology leadership, innovation, industrial policy, globalization, China

JEL Classification: Q55, O31, O32, O14