China can’t innovate, and isn’t even pretending to try anymore. It’s not that surprising, considering how much intellectual firepower Beijing is directing at censoring, social engineering and firewalling. China’s brightest creative stars seem to be so busy with activities designed to control, eavesdrop, restrict, monitor and indoctrinate — it makes sense that there would be less energy for product development or creative branding.
Chinese industry has a silo orientation towards international commerce — as long as the walls are high enough then they are protected and isolated from the rest of the world. It’s juche -lite — self-reliance with a trade surplus. Beijing selects what gets in — and doesn’t really worry too much about what goes out (as long as it isn’t information).
We’re Winning – For Now
The real beneficiary of the Chinese Silo approach have been US and Western MNCs – who so far have not had to worry about going head-to-head with Chinese brands or products. Imagine a world where Baidu demonstrated a wearable computer with a unique design — a year BEFORE Google was ready with a prototype? Or if Chinese policymakers marshaled national resources to leapfrog the iPad – instead of trying to hobble it with nationalistic whinging?
The day will come when the best Chinese engineers are paid to solve problems and design new products — not hack databases or censor chat -sites. Chinese marketers will eventually develop strategies to kill categories instead of just copying last year’s overseas winners.
Fortunately for the US, that day isn’t here yet — we still have some breathing room. Every time a Chinese firm clones a hot product or a bureaucrat restricts access to a Western brand, a US investor gets his wings (or at least a dividend payment that can be applied to a corporate jet).
But someday the Chinese government will be less successful at stifling and warping the direction of Chinese industrial development — and that’s when US manager really have to start worrying.
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