Having filed 526,000 patent applications in 2011, which makes up a quarter of the global total, China has crowned itself with the international patent award, leaving behind the US and Japan, who have been in the top two spots since 2006, says a UN report.
With every passing moment, innovation is gaining steam in China. From eye controlled laptops to driverless vehicles, China has turned many science fictions into facts.
With its mind-boggling breakthroughs and out-of-the-box ideas, China has revamped the concept of usual things as consumer electronics, online gaming, instant messaging, and transportation.
Not only this, China is excited with the goal to design and manufacture a home-grown commercial aircraft known as the C919 by 2016 that can compete with Boeing and Airbus.
The surprise list doesn end here. China is geared up with numerous mega projects in diverse fields ranging from pharmaceuticals to broadband wireless networks and from nuclear reactors to pollution control systems.
Besides, according to MGI, China well poised to become the worlds largest market for renewable energy resource and is already a home to some of the sectors biggest companies, providing critical components for the industry globally.
With innovations heaping up, a long-held perception that China can only emulate, not innovate, seems to dispel.
Chinas leaders know the worth of innovation and are pouring billions of dollars into R&D. Chinas expenditure on R&D tallied 868.7 billion yuan ($139.2 billion) in 2011, up 23 percent YoY, according to a report published by the National Bureau of Statistics. The R&D outflow accounted for 1.84 percent of the nations annual GDP, up from 1.76 percent in 2010.
Moreover, the current five-year indigenous innovation plan aims at subsidizing the strategic industries and compelling foreign firms to transfer intellectual property to burgeoning national champs to do business in China and to obtain Chinese government contracts.
Some critics argue that as the glut of cheap labor is drying out on account of shrinking younger population, China days as a low-cost production center to the world are numbered. Thus, the government is making out ways to rescue the economy by bringing the country to the vanguard of technological innovation.
However, rising costs doesn mean that companies should bundle their baggage from China and move towards cheaper countries, instead, the reality is that Chinas workforce and infrastructure is far superior, so China won lose its supremacy in manufacturing. Furthermore, with its extraordinary growth plans and a continental-sized consumer market that has begun to develop already, China is a market no MNC can overlook.
Thus, resultant higher prices will propel the companies to either accept the squeezed margins or transfer higher costs to the final consumers. Thus, instead of being a deflationary force in the global economy, China will export inflation to the rest of the world.