The Australian Financial Review:
According to Rein China's leaders' laser-like focus is to move away from being a manufacturing hub as its former advantages such as cheap labour and a fairly lax regulatory environment disappear. Similar to the rise of the United States in the 19th century and Japan post World War II, China has "copycatted" its way to success thus far but it now wants to become an innovator itself.
"In the past the barriers to innovation have been issues such as intellectual property protection and a fear of the state coming in and taking away business. As these issues become less of a problem and business starts to see a better more regulated environment you'll see China become an innovation powerhouse," Rein said.
"Straight after the cultural revolution the country's leaders looked to the low hanging fruit such as manufacturing to drive the economy and now it's moving into new stages of innovation."
Rein says the next stage of innovation saw the rapid growth of companies like Alibaba in China but it's focus is all about innovation for China and Chinese consumers. He said what we are seeing now is China's move to become a world innovator.
"China wants to move up the value chain and it's now leading the wave in automation in manufacturing for a start. It's an innovator in drone technology and a world leader in mobile communications.
"With around 900 million mobile phone users and 70 per cent of those users accessing the internet from those devices, China is leading the way in app design. In the United States so much software is built on a PC whereas in China everything is built for mobile.
"You're starting to see Chinese companies lead the way in construction equipment and they are more likely to buy western brands as they look to become global players – not just Chinese players."
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