Rob Atkinson's testimony before the U.S.-China Economic and Security Review Commission stresses China has made a strategic decision to leapfrog its current development path to become a high-tech economy. The implications for the United States economy should be clear. The Chinese no longer want to dominate just cost-based commodity production and let us be the innovators, they want to also win in innovation-based economic competition, exactly what so many in the United States believe is America’s “sweet spot” and natural comparative advantage. While there is a broad consensus among experts on what China is trying to do, there is considerably less consensus over whether China will be successful and whether America should be concerned. But the bottom line is that America ignores China’s innovation policies and growing innovation capability at its own peril.
