中文
By Xin Ping
For years, Western perceptions of the Chinese economy have oscillated between miscalculation and anxiety, evident in a series of theories predicting when and how China would collapse.
Amid these sensational narratives, observers miss one fundamental reality: The Chinese economy, underpinned by agile and predictable government policies, is smoothly navigating an unprecedented transformation – a voyage of rebalancing with no global or historical parallel.
When China's National Bureau of Statistics reports the service sector's share of GDP surging from 45.5 percent to 56.2 percent in a decade, and the Hurun Global Unicorn Index shows that Chinese startups account for 22.52 percent of the world's total – eclipsing Europe, the trend is clearer than ever: This is no cyclical fluctuation. It is the metamorphosis of an ancient civilization into an innovation powerhouse.
The innovation shift: Why Western perceptions miss China's strategic evolution
The Western discourse has long been plagued by two fallacies: dismissing China's innovation as "copycat" mimicry and framing its market regulations as "innovation suppression." This binary thinking obscures China's ongoing structural evolution; while Western analysts cried "innovation winter," China was trimming its sails for new winds.
Take antitrust and education reforms for example. In Western depictions, the Chinese government is accused of hurting market confidence and choking investment and innovation by restricting "natural" capital flows.
In fact, China's reforms are not sporadic or spontaneous, but well-deliberated recalibrations aimed at curbing market distortions and ensuring long-term growth. Through these endeavors, the Chinese government supports the market in realizing sustainable development: enforcing regulations where risk-prone short-term interests cause capital congestion, and encouraging investment in vital long-term sectors. Instead of being choked, investment is redirected toward more innovative, long-term projects that serve the interests of both the public and investors.
Policy interventions also guide capital toward advanced manufacturing, green tech, and frontier areas like artificial intelligence (AI) and industrial robotics, accelerating the shift from "Made in China" to "Created in China." Official statistics indicate a jump of high-tech manufacturing's share from 9.4 percent to 15.5 percent. Reports by the World Intellectual Property Organization confirm China now dominates global AI patents with a share of 60.3 percent. These figures are only part of the overall progress.
Self-driven innovation, spurred by effective policy tools, is precisely a core element of China's economic compass.
Breaking barriers: The scale-driven innovation ecosystem
Contrary to claims that U.S. "small yard, high fence" restrictions would cripple China, the country's exponential growth is debunking the myth of Western technological invincibility.
Apple CEO Tim Cook laid it bare at Beijing's China Development Forum, pointing out that "In the U.S., you struggle to fill this room with engineers. In China, you fill stadiums. We're here for unmatched expertise."
American containment has only taught the dragon to navigate stormier seas. Chinese chipmaker Semiconductor Manufacturing International Corporation's reportedly 95 percent chip yield rate, chipmaker Yangtze Memory Technologies Co's NAND flash memory breakthrough and China's 63 percent electric vehicle (EV) battery market share all signal a shift in green energy leadership.
In an auto market once foreign-dominated, BYD and other Chinese EV brands now take up over half of the global EV sector, their exports surpassing Japan's entire output. Huawei leads with 14 percent of 5G patents. DJI holds 70 percent of the drone market – a two-generation tech lead.
This revolution rides an "engineer tide." LinkedIn shows that China is home to 22.4 percent of global AI talent, with 5 million annual Science, Technology, Engineering and Mathematics graduates fortifying its innovation harbor. Renewables have attracted $818 billion in carbon-neutral investment. Meanwhile, China's 400 million middle-income group consumers fuel an average annual growth of 20 percent in smart home appliances.
A 1.4-billion-strong market, approaching 20 million engineers and unparalleled efficiency forge a "scale-innovation" vessel. Where America withholds its tech skiffs, China launches innovation fleets.
Capital's verdict: Cutting through the noise
Industry insiders understand better. Scottish investment firm Baillie Gifford's trilogy – "China: Fear or FOMO?" "China: A Tale of Two Stories" and "China: The Fallacy of Fear" – captures China's pivot: An economic transformation unfolding at an unprecedented scale and velocity is propelling the nation from the world's factory floor to a self-sustaining exporter of technological prowess.
BlackRock's 2024 analysis found that consumption contributes 67.4 percent of China's GDP growth, compared to the OECD's 54.9 percent. IMF Managing Director Kristalina Georgieva concurs: "China offers a new paradigm."
Capital flows where it sees fit: Tesla's Shanghai Gigafactory now anchors the majority of the company's global production output. Foreign holdings of Chinese bonds quadrupled to over $600 billion – confidence flying full sail.
All these figures point to one fact: International investors' confidence in the Chinese economy's future is rising. The Chinese government's economic doctrine – supply-side reform sharpening the prow, domestic demand stabilizing the hull, and innovation redrawing trade routes – is gaining global recognition.
While the West remains mired in zero-sum thinking, China's economic flagship isn't just sailing – it's drafting new nautical charts.
The only question is: Who is ready to join the crew?
Xin Ping is a Beijing-based international affairs commentator.
