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China’s Transition to the Innovation-Driven Economy: Stepping Stones and Road-Blocks

Author

Listed:
  • SARMIZA PENCEA

    (Institute for World Economy, Romanian Academy, ROMANIA)

  • ANA-CRISTINA BÂLGĂR

    (Institute for World Economy, Romanian Academy, ROMANIA)

Abstract

Besides its past outstanding accomplishments in terms of extensive development, China has also accumulated multiple distortions and structural imbalances and has reached a crossroads, where a major qualitative switch is a must. Its outdated export-oriented economic model has covered both the factor-driven and investment-driven stages of development and now China needs to more firmly advance towards the stage of innovation-led growth, transiting from cheaply processing and assembling foreign-designed goods, using foreign-designed technologies and supplying foreign markets, to producing high quality, services-and-knowledge-intensive products, using locally-devised technologies and meeting, primarily, its own domestic demand. This paper looks at the progress attained in recent years in the Chinese research, development and innovation system, sketching its landscape in terms of structure, endowment and goals, inputs and output improvement, significant shifts and trends paving the way to an innovation-driven economy, as well as to potential road-blocks on the way.

Suggested Citation

  • Sarmiza Pencea & Ana-Cristina Bâlgăr, 2016. "China’s Transition to the Innovation-Driven Economy: Stepping Stones and Road-Blocks," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 4(1), pages 31-46, May.
    • Handle: RePEc:ntu:ntugeo:vol4-iss1-16-031
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    References listed on IDEAS

    as
    1. Sarmiza Pencea & Cristina Balgar & Daniel Bulin, 2015. "Building blocks of China’s path to technological prowess and innovation-led development," National Strategies Observer (NOS), Institute for World Economy, Romanian Academy, vol. 2.
    2. Quirin Schiermeier, 2014. "China: At a crossroads," Nature, Nature, vol. 507(7490), pages 129-131, March.
    3. Sarmiza Pencea, 2014. "“The New Season of Chinese Economic Miracle” and its Challenges," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(1), pages 56-64, May.
    4. Thomas J. Holmes & Ellen R. McGrattan & Edward C. Prescott, 2015. "The Costs of Quid Pro Quo," Economic Policy Paper 15-1, Federal Reserve Bank of Minneapolis.
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    Cited by:

    1. Lan, Xiujuan & Hu, Zheneng & Wen, Chuanhao, 2023. "Does the opening of high-speed rail enhance urban entrepreneurial activity? Evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 88(C).
    2. Miklós Losoncz, 2017. "The Dilemmas of China’s Shift in Growth Trajectory and Economic Governance," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 16(Sepcial I), pages 21-49.
    3. Wensheng Xiao & Haojia Kong & Lifan Shi & Valentina Boamah & Decai Tang, 2022. "The Impact of Innovation-Driven Strategy on High-Quality Economic Development: Evidence from China," Sustainability, MDPI, vol. 14(7), pages 1-20, April.
    4. Li, Chenhui & Lian, Xubei & Zhang, Zhi, 2018. "Public education expenditure, institution development, and regional innovations: An empirical evidence from China," Economics Discussion Papers 2018-23, Kiel Institute for the World Economy (IfW Kiel).

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