The End of Copycat China
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The End of Copycat China

The Rise of Creativity, Innovation and Individualism in Asia

Shaun Rein
Wiley, 2014
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Strategy consultant Shaun Rein entertainingly explains why you cannot call China a “copycat nation” anymore. The Chinese have re-examined their original plan for encouraging economic growth, which depended on emulating foreign business practices and borrowing foreign technology. This approach produced diminishing returns. The Chinese are now changing the nature of their economy and encouraging innovation. Chinese economic development has followed three broad stages. In the first stage, the government encouraged heavy capital investment; Chinese businesses borrowed business models from abroad. In the second stage, China’s companies explore innovation for their domestic market. In the third stage, Chinese businesses use innovative practices to target foreign markets – perhaps including yours. Based on more than 50,000 interviews with those involved in business in China, Rein performs a singular service by showing why China’s economy evolved as it has and by forecasting the direction it may seek in the future. getAbstract recommends his insights to investors, entrepreneurs, economic historians, and anyone seeking to understand China’s economic future – whether to capitalize on it or to compete against it.

Summary

Rapid Economic Growth

Most people in the US believe that over the past 30 years, China unfairly engineered its rapid economic growth. They think China manipulated its currency and stole intellectual property and jobs. Few Americans know that China’s currency, the yuan, has strengthened against the dollar since 2005. They don’t know that countries with lower average wages than China’s have lured jobs away. China is America’s second-largest trading partner after Canada and, for now, the world’s second-largest purchaser of luxury goods. Contemporary Chinese economic development has followed three broad stages:

“The Innovation Curve Stage 1: Copycat Companies”

In the first stage, starting in the early 1980s and going into the new millennium, China’s government encouraged heavy capital investment. Chinese businesses borrowed growth and production models from abroad. The government promoted the development of standardized new cities, an approach Chinese officials found easy to implement and monitor. They worked with real estate developers and state-owned banks to build the infrastructure a city requires. The government then coerced state-owned companies to move ...

About the Author

Shaun Rein is the managing director of CMR, a strategic market intelligence firm.

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