China’s top science academy and experts have warned about the country potentially facing a “middle-technology trap” – where China progresses from low-end manufacturing but struggles to transition to high-end innovation. This trap could hamper sustainable economic growth. Amid escalating US-China technological tensions, China pledges to break containment and achieve self-reliance, especially across semiconductors.
The Risk of a Middle-Technology Trap
The warning comes as China remains stuck downstream in global supply chains despite being the world’s largest manufacturer. While benefiting from industrial transfers and low-cost labor thus far, further upgrading requires original innovation – which risks being hindered by technology blocks from developed nations. Hence the trap, where China’s growth stagnates at middle-level technologies.
China’s Commitment to Technological
Upgrades China’s leaders have underlined tackling this risk by prioritizing research and guiding breakthroughs across strategic fields like AI and space tech. The aim is spawn new industries and sustain growth by leveraging innovation, while securing domestic manufacturing chains. Already a top R&D spender, China must still embrace more open, liberal policies according to experts.
Attracting Global Talent and Private Sector Participation
To drive innovation, China must attract international and domestic talent by opening access to national laboratories and other science infrastructure beyond state-run entities. Collaboration between public and private sectors is also essential to expand industrial capacity and supply chains. Unilateral opening up is necessary despite global decoupling.
Fundamental Reforms for Transitioning Up the Value Chain
In addition to increased R&D spending, China needs significant enterprise reforms so state firms and private companies can better integrate resources and capabilities. This is vital for absorbing imported technologies, developing original innovations to replace imports, and finally leading indigenous designs – key stages preceding transitioning up the value chain.
Risk of Not Breaking the Trap
Without sufficient indigenous innovation and technology breakthroughs, China risks losing its existing manufacturing strengths to cheaper developing countries as costs rise. Meanwhile, middle-income traps suggest that stellar economic growth rates typically slow down after reaching certain income levels, unless productivity is boosted through innovation and high-value productions.
