China at Risk of Getting Caught in Middle-Technology Trap that Could Thwart Innovation
• China risks getting stuck in a "middle-technology trap" where it lacks core technologies retained by developed nations, hampering innovation • This trap emerges when low-cost advantage diminishes and local firms struggle to catch up technologically • China aims to promote industrial innovation via scientific and tech innovation to spawn new industries and momentum • China's manufacturing is still downstream, facing risks of restraints by developed nations • China may need more open policy and reforms, attract foreign talent, open labs, and share state and private resources