Innovations Key Growth driver for China's new economy

Innovations Key Growth driver for China’s

By Tom McGregor, CNTV Commentator

The Washington D.C.-based think tank, Brooking Institute, has touted innovation as the key driver of growth for the “new economy” of China, which is also expected to be a major topic of conversation at the upcoming G20 Forum, scheduled for Sept. 4-5, 2016 in Hangzhou, best known for its scenic West Lake, east China.

Leading members of the research institute had visited Beijing on Tuesday to attend a panel with Chinese experts. They had offered their forecasts on what to expect for this year’s G20.

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They gave warnings that the Western media would likely publish negative stories about China’s slowdown in its economy, but Chinese experts discussed measures that Beijing is taking on structural reforms, supply-side reforms and encouraging more innovation to rejuvenate the nation.

Sparking innovation not only benefits China but the rest of the world as well.

Innovation needs cooperation

Charles Freeman III., senior fellow at John L. Thornton China Center, explained that scientists and those working in research and development (R&D) centers require collaboration to succeed.

To invent new technologies, developers often must rely on cooperation from organizations, governments, investors and universities from all over the world.

Freeman expressed concerns that US Presidential candidates, including Hillary Clinton, who is seeking the Democrat Party nomination for the White House and GOP front-runner Donald Trump, are both engaging in “nationalism and protectionism” on the campaign trail.

He defined nationalism as “excessive pridefulness in one’s country that breeds antagonism in other countries,” when speaking to CNTV Panview. “There’s been a shift towards authoritarianism, even in the USA.”

Freeman added, “Nationalism cuts off cooperation on new ideas and cooperation.”

Overcoming challenges with new growth patterns

Wang Xiaolong, special envoy on G20 for China’s Ministry of Foreign Affairs, highlighted major obstacles for reigniting stronger growth of the global economy.

He listed such challenges as a weak recovery after a global recession, cyclical factors, transition away from a strong US dollar and low interest rates, slowdown in the emerging markets, along with changing modes of growth.

He sees the path of innovation as the solution. They will act as “new drivers of global economic growth,” while Beijing’s plans to implement new structural reforms and endorse a “new industrial revolution” for our digital era.

Meanwhile, most panellists appeared to agree that the G20 should move forward on steps to raise global trade and investments, since they are lagging behind overall economic growth.

Digital Gap to Digital Dividend

Hu Angang, director for the Center of China Studies at Tsinghua University, contends that China’s embrace of the digital era would play a fundamental role in future economic growth for the nation.

He mentioned China’s annual report on promoting the internet, “Digital Gap to Digital Dividend,” which predicted that China would become the world’s most important internet user by 2020. Additionally, Alibaba, China’s leading online shopping site, is recognized as a major contributor to the global economy.

Alibaba claims to have online buyers from over 232 countries and regions – 400 million customers worldwide, which has created more than 10 million new jobs. Small businesses can cash in as well.

Effective innovation with G20 support

Chinese President Xi Jinping will chair this year’s G20 in Hangzhou and he has called for the Chinese to embark on more innovation for sustainable development. Moving ahead on R&D, digital technologies and upgrading new modes of production, as well as producing more high-quality goods to keep the domestic economy running strong.

Building on innovation would also establish a more invigorated and inclusive world economy.