{"id":422807,"date":"2022-11-20T13:00:00","date_gmt":"2022-11-20T12:00:00","guid":{"rendered":"https:\/\/innovationorigins.com\/?p=422807"},"modified":"2022-11-20T13:00:00","modified_gmt":"2022-11-20T12:00:00","slug":"hurdles-on-the-road-to-innovation-china-as-a-partner-competitor-and-rival","status":"publish","type":"post","link":"https:\/\/ioplus.nl\/archive\/en\/hurdles-on-the-road-to-innovation-china-as-a-partner-competitor-and-rival\/","title":{"rendered":"Hurdles on the road to innovation: China as a Partner, Competitor, and Rival"},"content":{"rendered":"\n
Why we write about this topic:<\/summary>

That geopolitics is a subject as sensitive as it is dynamic is something we see in the news every day. An alliance that seemed ideal yesterday may already be completely undesirable tomorrow. How do we keep things in balance as a continent, as a country or even as a region? How do companies deal with this? To find out, Dr. Yuxi Nie puts the magnifying glass on the relationship between Brainport Eindhoven – which, as a high-tech region, is extremely sensitive to the consequences of geopolitics – and China. In a series of articles, she keeps us informed of the progress of her research, which aims to devise effective communication strategies for Brainport. Today part 6. Read the other episodes here.<\/a><\/p><\/div><\/details>\n\n\n\n

The global economy unfolds more intensified competition among major players from different world regions. As the previous blog<\/a> mentions, increasingly emphasizing its centralization, China has entered a new phase to establish its self-reliance in the midst of global disruptions. In global trade, both China and Europe are looking for more self-reliance by creating strong imperatives for innovation in a variety of sectors. However, nurturing an innovation ecosystem requires dialogues and collaboration from both sides on science and technologies. This blog discusses some of these challenges and opportunities. <\/p>\n\n\n\n

In their day-to-day operations, small and medium sized businesses do not necessarily discuss the geopolitics in great power rivalry. However, they are often the most affected from the repercussions of political standoffs and economic restrictions. Based on my interviews with both Dutch and Chinese business professionals from tech and service industries, SMEs witness the direct consequences caused by direct economic sanctions as well as the shifting sentiments for investment and consumption. The degree of such impact on their business performances depends on their business model and more importantly, on the sectors they work in. <\/p>\n\n\n\n

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\u201cThe more vibrant China- EU bilateral relation is, the better it is for our business. However, to weather the likely intensified decoupling, we are now looking to adjust our business strategy through further localizing our operation,\u201d<\/em><\/p>\nsays a business developer of a Chinese company based in the Netherlands<\/em>.<\/cite><\/blockquote>\n\n\n

<\/a>
<\/div><\/div>
On EU-China bilateral relations: Is there such a thing as strategic decoupling?<\/div>
Our global economy is amid a disruptive shift catalyzed by Covid-19, the Ukraine War, inflation, sanctions, and the imminent rise of China as the world\u2019s largest economy.<\/div><\/div><\/div>\n\n\n

Protect or Promote: Depending on the sectors<\/h2><\/div>\n\n\n\n

Based on a survey report from MERICS<\/a>, China remains to be an attractive place to conduct innovation work in a general sense. However, the authors also point out \u201cthe benefits that European companies can derive from their participation very much depends on the sector they are in. \u2026In other words, China\u2019s R&D environment is a microcosm of its overall market \u2013 it is not for everyone.\u201d <\/p>\n\n\n\n

Sectors where companies find considerable value in participating and investing include chemicals, industrial machinery and automotive. In contrast, firms in sectors that are under \u201cincreasing pressure from China\u2019s state-planners, such as in information and communications technology\u201d hold pessimistic views. These sectors are also the chokepoints of China\u2019s technological development. <\/p>\n\n\n\n

Semi-conductors are known as the China\u2019s chokepoint technologies. At the moment, the development of such chokepoint technologies is on top priority. This is especially the case since the US has announced its latest export controls policy<\/a> on AI and semiconductor technologies to China, in which the vendors are required to obtain an export license to sell to China cutting-edge semiconductors, components, chip-design software and manufacturing equipment made with U.S. technology<\/a>. The impact, as authors from a Rhodium Group report estimate, can be far-reaching and comprehensive<\/a> if applied more broadly. More recent examples are shown from Germany\u2019s vetoing of two chip facilities, Elmos and ERS electronic takeovers<\/a>, and halting Duisberg\u2019s cooperation with Huawei<\/a>. <\/p>\n\n\n\n

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\u201cThe US sanctions surely have had a negative impact on Huawei\u2019s results, but it has also pushed Huawei to focus on its product development, create its own operating system, and diversify its business, for example towards the energy sector. And if we look at the much relevant green transition at this time, everyone needs each other.\u201d <\/em><\/p>\nRichard Spaans, Head of Corporate & Public Affairs at Huawei, 2022<\/em><\/cite><\/blockquote>\n\n\n\n

As Mr. Spaans replies in an interview, \u201cWe should not be only looking at the risks of technology, but also at the benefits. At the moment, Huawei is already looking into 6G. If we look at the earlier discussions within Europe, the 5G toolbox discussion was circled around fear and concerns, with the result that Europe is actually lagging behind on such digital innovation.\u201d <\/p>\n\n\n\n

How would these geo-political challenges influence the EU-China business relations? And what does it mean for the European businesses? According to a recent Rhodium Group research<\/a> report, major European businesses have not been hesitant to expanded their investment in China, and the European investment shows a strong preference in sectors of \u201cautos, food processing, pharma\/biotech, chemicals and consumer products manufacturing\u201d. <\/p>\n\n\n

<\/a>
<\/div><\/div>
The Digital Shiftings in Sino-Dutch Business Communication<\/div>
Geopolitics is a subject as sensitive as it is dynamic; we can see it in the news every day. An alliance that seemed ideal yesterday may already be completely undesirable tomorrow.<\/div><\/div><\/div>\n\n\n

Cold politics and hot economics? <\/h2><\/div>\n\n\n\n

On November 4th<\/sup>, as the first government leader from a G7 nation to China since 2019, German Chancellor Olaf Scholz, accompanied by the trade delegation, met with the Chinese President Xi Jinping in Beijing<\/a>. Taking place after China\u2019s 20th Party Congress, Scholz\u2019s visit, bundled with diplomatic messages and economic goals, has received mixed sentiments on future outlook of EU China relations. On the one hand, the cabinet\u2019s recent approval of China\u2019s Cosco\u2019s 24.9% stake investment<\/a> in the Hamburg port has already sparked much criticism domestically, with fear of allowing more dependence on China. On the other, with China\u2019s automotive marketing becoming much more innovative, to retain Germany\u2019s automotive competitiveness, German carmakers addressed the need to tap into China\u2019s innovation ecosystem and deepen their investment footprint in the country<\/a>. <\/p>\n\n\n\n

\n

\u201cChina-bashing will not stop the inevitable. The focus now has to be on creating the conditions that will allow European companies to outcompete the very rivals they have helped to create.\u201d<\/em><\/p>\nPeggy Hollinger, 2022, <\/em>Financial Times<\/em><\/a><\/cite><\/blockquote>\n\n\n\n

Thus, perceptions of China being seen as a partner, a competitor or a rival are constantly shifting and have caused heated debate. Jungbluth and Walkenhorst propose that China could be \u201ca partner in climate change mitigation; a competitor in key technologies; and a systemic rival in the international rules-based <\/em>system<\/em><\/a>.\u201d<\/em> It all eventually depends on the interests and paths we share. <\/p>\n\n\n\n

Looking at China\u2019s innovation imperative<\/h2><\/div>\n\n\n\n

Though it remains a question as to whether China\u2019s innovation system continues to accelerates, the system has proven to be an effective one in the past three decades. With a high degree of pragmatism, China\u2019s policymakers and entrepreneurs are able to strike a balance between the central control and market logic. Motivated by its domestic demand and building rapidly its production and logistic capabilities, Chinese businesses are already taking the lead in particular sectors in terms of product and market. These areas include solar, automotive, artificial intelligence, and e-commerce. Looking back, the factors that contribute to China\u2019s innovation system include entrepreneurial pragmatism and initiative, market relations and international interactions. To promote product innovation, many Chinese firms have strategically located themselves in industrially diversified areas and have consolidated their relations with local universities and research centers. <\/p>\n\n\n\n

Innovation in China is seen as more of a process that aims to constantly adapt and evolve. Compared to innovators located in more developed economies, Chinese companies have adopted a much more customer-oriented approach. To keep up with the development of digital consumption<\/a> and meet the rising expectations from an increasingly affluent population, China is moving beyond delivering \u201cgood enough\u201d<\/a> product and services and reinventing itself to be a leading innovator. <\/p>\n\n\n\n

With the huge population of hyper-adapters and hyper adopters, China\u2019s developmental ecosystem demonstrates more accepting sentiments toward \u201cchange, adoption, and newness<\/a>\u201d.<\/p>\n\n\n\n

\n

\u201cIf you\u2019re used to believing in your own exceptionalism, leaning into imitation as a strategy can feel like a declaration of defeat. But innovation has always been about both invention <\/em>and imitation.<\/em>\u201d <\/p>\nZak Dychtwald, Harvard Business Review, 2021<\/cite><\/blockquote>\n\n\n\n

The 20th<\/sup> Party\u2019s Congress taken place in October shows no sign of scaling down on its innovation system under Xi\u2019s leadership in his third term, albeit the increasingly questioned Covid-zero policy cause travel restrictions. On the contrary, Beijing is in full swing to achieve its goal to \u201caccelerate the realization of high-level scientific and technological self-reliance and self-improvement<\/a>\u201d. <\/p>\n\n\n\n

The incentives for China\u2019s push for technological rise come from both within the domestic demand and external international relations. As Huang and Henderson argue, Chinese technocrats are given a more powerful stage under Xi\u2019s leadership when China-US tech rivalry escalates<\/a>.  Bearing the strong ambition to strengthen local tech supply chains, \u201cthe new cohort of technocrats are plucked from the aerospace, semiconductors, and advanced manufacturing industries\u201d. <\/p>\n\n\n\n

Steadily adopting industrial policy, the Chinese policy-makers are keen to push forward technological breakthrough by establishing industry zones, allowing tax rebate and setting up research funds. The efforts through policy intervention are made in industries that bring about both the rising new technologies and the chokepoints technologies. <\/p>\n\n\n\n

\"\"
Yuxi Nie<\/figcaption><\/figure>\n\n\n\n

Dr. Yuxi Nie<\/a> is a researcher-lecturer at Fontys University of Applied Sciences, executing the research project “Towards a communicative strategy that guides Brainport companies to do business with China in a growing digital business context”. Business relations between Brainport organizations and their partners based in China have been growing rapidly. Probing the geo-political, intercultural and digital challenges, this project explores the Sino-Dutch corporate communicative strategies and aims to develop effective communication strategies for organizations in Brainport. This two-year Hbo-postdoc project started in 2022 and is funded by Regieorgaan SIA<\/a>, part of NWO, the Dutch Research Council.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The global economy unfolds more intensified competition among major players from different world regions. As the previous blog mentions, increasingly emphasizing its centralization, China has entered a new phase to establish its self-reliance in the midst of global disruptions. In global trade, both China and Europe are looking for more self-reliance by creating strong imperatives […]<\/p>\n","protected":false},"author":2491,"featured_media":507547,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"advgb_blocks_editor_width":"","advgb_blocks_columns_visual_guide":"","footnotes":""},"categories":[42],"tags":[27730,96,72903,70553],"location":[6763],"article_type":[60595],"serie":[],"archives":[],"internal_archives":[],"reboot-archive":[],"class_list":["post-422807","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-sustainability-nl","tag-business","tag-china","tag-fontys-2","tag-fontys-china","location-netherlands","article_type-analysis"],"blocksy_meta":[],"acf":{"subtitle":"Based on a survey report from MERICS, China remains to be an attractive place to conduct innovation work in a general sense.","text_display_homepage":false},"author_meta":{"display_name":"Yuxi Nie","author_link":"https:\/\/ioplus.nl\/archive\/author\/yuxi-nie\/"},"featured_img":"https:\/\/ioplus.nl\/archive\/wp-content\/uploads\/2019\/01\/Cleanroom-EF-EUV-Veldhoven_-ASML.jpg","coauthors":[],"tax_additional":{"categories":{"linked":["Sustainability<\/a>"],"unlinked":["Sustainability<\/span>"]},"tags":{"linked":["business<\/a>","china<\/a>","Fontys<\/a>","Fontys China<\/a>"],"unlinked":["business<\/span>","china<\/span>","Fontys<\/span>","Fontys China<\/span>"]}},"comment_count":"0","relative_dates":{"created":"Posted 3 years ago","modified":"Updated 3 years ago"},"absolute_dates":{"created":"Posted on November 20, 2022","modified":"Updated on November 20, 2022"},"absolute_dates_time":{"created":"Posted on November 20, 2022 1:00 pm","modified":"Updated on November 20, 2022 1:00 pm"},"featured_img_caption":"","series_order":"","_links":{"self":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts\/422807","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/users\/2491"}],"replies":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/comments?post=422807"}],"version-history":[{"count":0,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/posts\/422807\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/media\/507547"}],"wp:attachment":[{"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/media?parent=422807"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/categories?post=422807"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/tags?post=422807"},{"taxonomy":"location","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/location?post=422807"},{"taxonomy":"article_type","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/article_type?post=422807"},{"taxonomy":"serie","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/serie?post=422807"},{"taxonomy":"archives","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/archives?post=422807"},{"taxonomy":"internal_archives","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/internal_archives?post=422807"},{"taxonomy":"reboot-archive","embeddable":true,"href":"https:\/\/ioplus.nl\/archive\/wp-json\/wp\/v2\/reboot-archive?post=422807"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}