China goes back to a future of ingenuity and invention
Entrepreneurs see opportunities along the Silk Road and beyond
China was a great innovator and exporter of products and ideas long before most western nations existed. The common perception of China as an imitator disregards the ingenuity that altered world history with the inventions such as paper, printing, the compass, and gun powder. And it ignores the Silk Road that brought products to neighboring Asian lands, and to Rome and other parts of Europe.
This network of overland and sea trading routes was established during the Han Dynasty, more than a century before the Common Era. By the eighth century, when Europe was in the Middle Ages, the Tang Dynasty presided over a golden period of medical, scientific, and cultural advancement. Chang’an (now Xi’an), at the eastern terminus of the Silk Road, became the Imperial capital and one of the world’s most populous cities with around a million people.
The perception of China as an imitator is a more recent phenomenon. Other nations experience this stage of development that, for China, is linked to the disruption caused by the industrial revolution and western powers’ need for raw materials and markets in which to sell finished goods. China has been rebounding for over 100 years, since the end of Imperial China with the fall of the Qing Dynasty in 1911, and the creation a modern state, culminating in 1949 with the establishment of the People’s Republic of China.
The gradual reengagement with the West reached an important inflection point with the introduction of economic reforms by Deng Xiaoping in 1978, and the establishment of the first four Special Economic Zones, two years later. These Zones, on China’s southeastern coast – in Shenzhen, Zhuhai, Xiamen, and Shantou – operated with lower import duties and other concessions to encourage foreign investment and trade, and local manufacturing.
The economic reforms resulted in a production-driven economy and extraordinary GDP growth. Many Chinese companies served as Original Equipment Manufacturers (OEMs), making products that western companies branded and marketed. During this period, China gained a reputation for making cheap, low-quality merchandise, including knockoffs of major brands.
To create sustainable growth, China today is rebalancing its economy by raising the quality of its products and services, and promoting consumption at home and abroad. President Xi Jinping’s One Belt, One Road strategy evokes the Silk Road by encouraging international trade cooperation among modern nations along those historic routes. Many of the young entrepreneurs who today create and export new Chinese products and services were not yet born when Deng first opened the economy over 35 years ago.