Once the World's Great Factory, China Is the Next Great Innovator
The GE China Technology Center in suburban Shanghai is one of the industrial giant's premier R&D showcases. There, 600 engineers from around the world beaver away on next-gen products, everything from cleaner coal to high tech manufacturing. But GE's pride is just another boomtown office building compared with its new neighbor across the street, a stadium-sized saucer that looks like it escaped from Beijing's Olympic Park. Constructed by the Chinese Academy of Sciences, the gleaming behemoth is an electron-smashing particle accelerator, and by next year it will be drilling into world-class problems of microelectronics and pharmaceuticals.
Everyone knows about China's emergence as a global manufacturing power. Well, guess what: the People's Capitalist Republic isn't just emerging or ascending — it's exploding. And not only with boatloads of flatscreen TVs and great gusts of atmospheric carbon. The world's go-to source for low-cost labor is generating mountains of capital, squads of hot new companies, and — surprise! — glimmers of innovation.
The country's hottest export is actually cold cash. Until recently, China's pinstripe brigades were happy to stash the national hoard — $1.5 trillion in foreign exchange reserves, and counting — in US T-bills and other financial no-brainers. Now they're buying resources to feed their global ambition: raw materials (Sudanese oil, Australian iron), international capitalist bastions (billion-dollar stakes in Morgan Stanley and the Blackstone Group), and technology (a bid by router maker Huawei and others for 3Com, derailed by US security concerns).
Meanwhile, the world's biggest digital hothouse teems with exotic fruit. With more than 700 million registered users, Tencent Holding's QQ messaging platform is the largest online community on earth. Baidu handles 60 percent of Chinese Web searches, dwarfing Google's role in the vast national market. In video sharing, Tudou and 56.com offer licensed programming, supplanting broadcast TV for millions of users; YouTube is barely a blip. Hulu, the $100 million video-streaming venture from News Corp. and NBC, has its headquarters in Hollywood — and engineers in Beijing.
Aren't these just ideas cribbed from abroad? Perhaps. But the pieces are now in place for a great leap forward from "made in China" to invented there. US venture capitalists committed $1.4 billion to Chinese companies last year. Among their favorite targets are returning èmigrès and young professionals trained at places like GE's Shanghai facility and the Beijing outposts of Google, Microsoft, and Yahoo. For inspiration, would-be entrepreneurs can look to homegrown rock-star CEOs like Alibaba Group's Jack Ma (age 43), Tencent's Pony Ma (36), and Baidu's US-schooled Robin Li (39).
Even China's notorious environmental meltdown has an upside: It's both a sharp spur to innovation and the driver of a huge homegrown market for green technologies. The country will soon be the number one maker of windmills and solar cells. Broad Air Conditioning is the global leader in super-efficient cooling systems that can be powered by waste heat — an unmistakable growth opportunity in a power-short, warming world. Shenzhen-based BYD Company, a leading manufacturer of rechargeable batteries, showed up at the Detroit Auto Show earlier this year with a slick plug-in hybrid sedan, scheduled to roll out of Chinese showrooms in time for the summer Olympics.
Not long ago, China had neither the skills nor the spare cash to fuel amazing greatness. Now it has both. How about a BYD Technology Center in Detroit?
The GE China Technology Center in suburban Shanghai is one of the industrial giant's premier R&D showcases. There, 600 engineers from around the world beaver away on next-gen products, everything from cleaner coal to high tech manufacturing. But GE's pride is just another boomtown office building compared with its new neighbor across the street, a stadium-sized saucer that looks like it escaped from Beijing's Olympic Park. Constructed by the Chinese Academy of Sciences, the gleaming behemoth is an electron-smashing particle accelerator, and by next year it will be drilling into world-class problems of microelectronics and pharmaceuticals.
Everyone knows about China's emergence as a global manufacturing power. Well, guess what: the People's Capitalist Republic isn't just emerging or ascending — it's exploding. And not only with boatloads of flatscreen TVs and great gusts of atmospheric carbon. The world's go-to source for low-cost labor is generating mountains of capital, squads of hot new companies, and — surprise! — glimmers of innovation.
The country's hottest export is actually cold cash. Until recently, China's pinstripe brigades were happy to stash the national hoard — $1.5 trillion in foreign exchange reserves, and counting — in US T-bills and other financial no-brainers. Now they're buying resources to feed their global ambition: raw materials (Sudanese oil, Australian iron), international capitalist bastions (billion-dollar stakes in Morgan Stanley and the Blackstone Group), and technology (a bid by router maker Huawei and others for 3Com, derailed by US security concerns).
Meanwhile, the world's biggest digital hothouse teems with exotic fruit. With more than 700 million registered users, Tencent Holding's QQ messaging platform is the largest online community on earth. Baidu handles 60 percent of Chinese Web searches, dwarfing Google's role in the vast national market. In video sharing, Tudou and 56.com offer licensed programming, supplanting broadcast TV for millions of users; YouTube is barely a blip. Hulu, the $100 million video-streaming venture from News Corp. and NBC, has its headquarters in Hollywood — and engineers in Beijing.
Aren't these just ideas cribbed from abroad? Perhaps. But the pieces are now in place for a great leap forward from "made in China" to invented there. US venture capitalists committed $1.4 billion to Chinese companies last year. Among their favorite targets are returning èmigrès and young professionals trained at places like GE's Shanghai facility and the Beijing outposts of Google, Microsoft, and Yahoo. For inspiration, would-be entrepreneurs can look to homegrown rock-star CEOs like Alibaba Group's Jack Ma (age 43), Tencent's Pony Ma (36), and Baidu's US-schooled Robin Li (39).
Even China's notorious environmental meltdown has an upside: It's both a sharp spur to innovation and the driver of a huge homegrown market for green technologies. The country will soon be the number one maker of windmills and solar cells. Broad Air Conditioning is the global leader in super-efficient cooling systems that can be powered by waste heat — an unmistakable growth opportunity in a power-short, warming world. Shenzhen-based BYD Company, a leading manufacturer of rechargeable batteries, showed up at the Detroit Auto Show earlier this year with a slick plug-in hybrid sedan, scheduled to roll out of Chinese showrooms in time for the summer Olympics.
Not long ago, China had neither the skills nor the spare cash to fuel amazing greatness. Now it has both. How about a BYD Technology Center in Detroit?
