China is becoming a tech giant, says the IMF

APD NEWS

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China is joining the world's leading technological powers as its research and development capabilities mean it is leaving behind its previous status as a second-tier industrial economy, the International Monetary Fund believes.

The world's second-largest economy has successfully moved from basic manufacturing into cutting-edge industry, challenging the traditional view of emerging market economies as technological followers of the West.

“Even though until recently much of the production of knowledge and technology was concentrated in a small number of advanced economies, China and Korea have now emerged as significant contributors to the global technology frontier,” the IMF said in its World Economic Outlook.

“Therefore, there may be scope in the future for spillovers from these new innovators to the traditional innovators” – with Western firms learning from China's new technological developments, reversing the traditional flow of knowledge.

Since 2000 China has overtaken the UK, France, Germany and Japan in terms of cumulative spending on research and development (R&D), leaving it second only to the USA.

China, which here is the grey line, has overtaken every nation except the US, in blue, in terms of cumulative R&D spendingCredit: IMF

Donald Trump has expressed concern that the US risks falling behind China, a fear which will receive a boost from the IMF's finding that world's most populous nation is now a top-five powerhouse in R&D in several tech sectors, including electrical and optical equipment.

President Trump as well as some business leaders have accused China of unfairly growing its tech sector, with a combination of theft of intellectual property, blocking US firms out of the market, and supporting companies which have little respect for individuals' privacy.

(NEW REPUBLIC)