Innovation, China-style

Here’s an insight into how Chinese leaders think about innovation.

Xi Guohua, China Mobile chairman and one of the country's most influential ICT officials, believes the digital divide between China and the rest of the world is growing.

That’s interesting, but just as revealing is his solution. No, it’s not to help private firms access bank loans or to revitalise the IPO market, or further deregulate the economy.

Xi's solution: more committees.

He called on the government to emulate the successful atom bomb and aircraft carrier programmes with national hi-tech projects in “core technologies” such as  electronic devices and high-end chips.

Speaking in Beijing last week, Xi urged the Communist Party to strengthen the country’s top ICT policy body, the party 'informatization leading group’ ('informatization’ is local jargon for ICT adoption) and for central and provincial level governments to put ICTs high on the agenda.

Xi's views may not be universally supported but they are doubtless influential. Until two years ago he was vice-minister and ranking party member of the Ministry of Industry and Information Technology (MIIT).  His current post heading up the giant mobile carrier is a position reserved for senior party officials.

A World Bank report issued 12 months ago called for liberalisation and urgent structural reforms to break out of the middle income trap. Xi neglected to mention any of those, nor any of the difficulties faced by startups and other businesses, such as red tape, unhelpful banks, state-owned monopolies, and the heavy burden of the Great Firewall.

Xi said the ICT gap between China and developed countries had widened since 2007, and that the country was not internationally competitive in developing core technologies. He also called for more efforts in cyberspace security and development.

Xi isn't the only ex-MIIT official fretting about the digital gap. Former MIIT boss Li Yizhong last week made the same point, noting that Chinese spent just $192 a year on information services, compared with $3,400 by Americans.