Chinese innovation is declining
James Andrew Lewis, 2024 - Senior Vice President; Pritzker Chair; and Director, Strategic Technologies Program at the Center for Strategic and International Studies “America is Losing the Shoe Race With China” 4/1, https://www.csis.org/blogs/working-papers/america-losing-shoe-race-china //DH
China is good at manufacturing what others have invented but no longer so good at innovation itself. This is the result of political change. China was becoming a leading innovator when it was politically open, before 2012. It still has advantages, but now that it is becoming politically closed, idea creation has slowed, entrepreneurs, investors and researchers are leaving, foreign investment is in decline (because of a perception of increased political risk), and geopolitics frays connections to global research and tech. Under different political leadership, China would be a much more formidable competitor, but China made a political decision that values continued party control over innovation and its ability to innovate is at risk.
Similarly, the EU spends significantly on R&D and has excellent research facilities, but its regulations are a powerful disincentive to entrepreneurship and commercialization. Europe’s major economies have shown flat income growth for more than a decade. It is not positioning itself to compete in a digital economy, since this requires a willingness to accept risk and allow entrepreneurship. Europe values privacy over innovation.