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Innovation called key to status as superpower

By Hong Xiao in New York | China Daily USA | Updated: 2018-03-09 00:14
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Ann Lee believes a country's innovative prowess is a better indicator of superpower status than its gross domestic product.

"I think at this point, people who have been watching China closely noticed that China has crossed the bar from copycats to innovating these days," she said. "Silicon Valley's capitalists now are spending probably more time in China looking for investment."

The author and commentator on global economics and finance issues shared her thoughts on a panel at the China Institute on Feb 20.

Lee, a former investment banker, also taught economics and finance at Peking University and New York University and has made frequent guest appearances on major TV networks.

"China and the US are probably neck and neck right now in terms of research and innovation in the area of artificial intelligence," she said.

Innovation is flourishing in biotech, big data technologies and many other areas, Lee said. With the Made in China 2025 policy, Beijing is making strategic moves about development.

Made in China 2025, unveiled in 2015, is a 10-year action plan designed to transform China from a manufacturing giant into a world manufacturing power.

Ten key sectors are new information technology, numerical control tools and robotics, aerospace equipment, ocean engineering equipment and high-tech ships, railway equipment, energy saving and new energy vehicles, power equipment, new materials, biological medicine and medical devices, and agricultural machinery.

Lee gave examples of technological innovation in China: hypersonic vehicles, which travel at five times the speed of sound or faster; artificial sun technology, with a goal of being operational by 2023, could be used to generate clean energy for China in 50 to 60 years; and quantum computing — China will open a $10 billion quantum computing center in 2020. The computer could have a million times the power of all other computers presently in the world.

"All of those [developments that] China is working on could be seen as a preview of what is going to happen," Lee said.

The status of having the yuan named as a reserve currency in 2016 for the International Monetary Fund's Strategic Drawing Right (SDR) basket could be seen as another indicator of superpower status.

In 2017, China announced it would set up an oil futures market in Shanghai Free Trade Zone based in renminbi (RMB), which means that oil can be purchased using that currency instead of dollars. The Shanghai International Energy Exchange is expected to begin trading on March 26.

Lee believes such a system would quickly make the RMB more international.

"So this (move) certainly could put China into superpower status from an economic standard," Lee said.

On the current relationship between China and the US, Lee said, "The world is not black and white; everything is basically along shades of gray, and there's lots of room for negotiation."

Lee suggested there's plenty of room for the two sides to work together on common issues such as climate change.

"When people sit down and start brainstorming, I'm sure there are many solutions. It's never a zero-sum game," she said.

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