Today's globalized economy, which every country is weaved into, means that only those who retain their edge through innovation end up ahead of competitors.
At a time when contemporary economies are relying more and more on high-quality growth, China too is relying on original ideas to overcome low-yielding strategies. Several factors are promising for China's aim of transforming from "workshop of the world" to a forerunner in finance and technology.
The Chinese system is efficient in adopting a top-down approach when state plans are to be implemented. With innovation now a national strategy, the government has been building an environment of out-of-the-box solutions to a variety of challenges.
A guideline released in 2016 set three milestones for innovation-driven development. By 2020, the plan is to make China an "innovative nation." Subsequently, by 2030, the country will mature into an international leader in innovation. A further 20 years ahead in 2050, China will solidify its position as a powerhouse of scientific and technological innovation.
The recently concluded China International Import Expo (CIIE) was another effort by the government to pitch for an open economy which needs to be innovative and inclusive. A science and technology innovation board at the Shanghai Stock Exchange was also launched during the expo to spur the city's financial competence and to push the domestic stock market higher.
Apart from the official innovation drive, the private sector is also playing its requisite part. Contributing over 70 percent of technological innovations and 60 percent of GDP, it is a major player in shaping the industrial direction and maintaining a leading role in the relentless international market.
The tendency of private entities to take greater risks as compared to state-owned enterprises makes them even more suitable to introduce inventive means of development. This attribute allows them to contribute to a vibrant structure while making use of the opening up policies.
In like manner, their successes are instilling a simultaneous bottom-up spiraling of innovation. Widespread adoption of digital payment systems and the steady rise of tech giants like Alibaba, Tencent and Baidu are the result of this workable arrangement actualizing the government's vision of an evolving economy.
China's achievements in innovation guided development can be further attributed to investment in research. Forming 2.2 percent of the GDP last year, the funding has revamped a manufacturing based development model into a more sustainable one that is based on knowledge.
Meanwhile, the quality of education in universities has strikingly improved – producing world class scholars who are continuously contributing to national progress. These young academics form the base of novel ideas which need a common place to be fused together for their practical manifestation.
Addressing this precondition, numerous areas across China have evolved into clusters of talent and capital. Shanghai is one such city striding with its innovative prowess. Zhangjiang hi-tech park in the east of the city is home to thousands of enterprises varying from pharmaceuticals to software houses. The park is a birthplace of many technologies that have found their way to all parts of the globe.Then there is the Greater Bay Area-an integrated economic zone encompassing the special administrative regions of Hong Kong and Macao, as well as nine cities in southern Guangdong province. By housing the most innovative tech companies, it is spearheading the nation's advancement. Its combined GDP, greater than that of many countries, is expected to retain the area's crucial role in modernization.
It has been well established by financial experts that innovation strongly influences prosperity of a country. China, on one hand, is utilizing this approach in favor of the economy, while on the other it is pushing to make the economy conducive for innovation. Either way, the results are speaking for themselves.
Daniel Hyatt is a Pakistan-based freelance journalist and commentator.
Opinion articles reflect the views of their authors only, not necessarily those of China.org.cn.