THE BEIJING AXIS China Business in Perfect Strokes

Published as the preface to the May 2010 edition of The China Analyst.

As the world economy gradually emerges from the worst financial crisis since the 1930s, it cannot but look towards China again, which long since emerged from the crisis and showed the way forward. In this edition of The China Analyst we examine China's next frontier of development: technology, where China has ample ability to surprise the world yet again.

The financial crisis is behind us. We have lived through a period of immense historical significance and, finally, we are able to look forward to a perhaps more normal year for the global economy in 2010. Yet looking back now, the global financial crisis seemed like little more than a blip for China's resilient economy, and if the crisis can now pass into history, the ongoing story of China's rise is leading the world further into the future with seemingly boundless potential.

In the years since 2003 that THE BEIJING AXIS has published The China Analyst, it has been a remarkable experience to track the journey of China's economic development. It has been a multifaceted picture not only of how China itself has been able to shed an image of backwardness, but also of how the rest of the world has been able to profit from China's rise. China's role in the global recovery from the financial crisis was a case in point.

In previous editions of The China Analyst we have paid particular attention to China's manufacturing capability and the complex processes of procurement that have enabled the world to profit from China's cheap industrial outputs; we have illustrated the macroeconomic and financial fundamentals of China's economy and given forecasts of underlying trends; we have analysed China's outbound investments in various parts of the world and looked at China's relations with strategic countries and regions; we have studied the impact of the global financial crisis on China and monitored its response; and we have—more recently—investigated the business strategies of China's leading enterprises.

For this edition, however, we have chosen to look at China from a new perspective: technology. On the surface, China is often perceived to be still inordinately afflicted by intellectual property enforcement problems. Yet in this China Technology Edition we illustrate how effective China has been in harnessing foreign technology and fusing it with China's own corporate ingenuity. After 30 years of technology absorption, political reform and industrial innovation, Chinese manufacturers are increasingly able to compete successfully in global markets by utilising China's low-cost advantages to produce quality products.

As we make clear in the features to follow, we are only at the beginning of China's global emergence in technology and innovation. Yet the outlines of China's technological capabilities are already impressive, from the numbers of patents taken out by its leading firms and inventors; the vast increases in its output of scientific research; the expanding activities of its engineering and design firms in executing contracts the world over; and the ability of its industries to produce sophisticated machinery ranging from small cost-cutting telecommunications products to large airplanes and aircraft carriers.

As we finally leave the financial crisis behind us, it seems in retrospect that this global calamity clearly illustrated China's ability to lead. Experience has taught us never to underestimate China's ability to surprise, however, and it is with this perspective that we consider China's emergence in technology and innovation.

It has been a remarkable journey documenting China's progress in the last few years, and we will do so still, with only increasing fascination. I trust that our readers will be able to gain new insights from this China Technology Edition of The China Analyst – and as always we look forward to receiving your feedback.