How the Chinese Model for Economic Innovation is Spurring Innovation

After visiting Shenzhen, China for the Tuck Global Leadership program, a Tuck visiting professor reflects on economic innovation in China.

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Shenzhen skyline | iStock: bingfengwu
David Wessel is director of the new Hutchins Center on Fiscal and Monetary Policy at the Brookings Institution.

David Wessel, visiting faculty for the Tuck Executive Education Global Leadership program, admits that some Chinese companies copy American products to make them more cheaply, and that there are challenges between China and the U.S. around intellectual property. But Wessel also admits that there is more to the Chinese model of economic innovation than business parlor tricks.

“The Chinese government has a plan for its future prosperity,” he says.

On a recent trip to China with the Global Leadership program, Wessel saw that plan in action, centered on the city of Shenzhen.

“In Shenzhen, China is creating an ecosystem of talent, money, government support, and access to the huge Chinese market. It’s China’s answer to Silicon Valley,” he says.

He also notes that, while U.S. companies often struggle to sell to the vast Chinese markets, Chinese companies are innovating their business models to take advantage of cashless payment systems.

“I saw a man with a bicycle cart selling ears of corn who had a QR code on his bike so customers could pay with WePay.”

Wessel discussed the Chinese economic innovation model and his recent trip to China on the Brookings Institution podcast Wessel’s Economic Update.

Originally aired on Brookings Institution podcast, Wessel’s Economic Update.