Industry-oriented technology policy in China - danger for Germany's technological competitiveness?

Despite efforts to increase its innovative standing, China will not become a "knowledge factory of the world" in the foreseeable future, according to a study by the Ifo Institute, even if China's technological lag to the industrialised countries is gradually reduced. Other than in Germany and in the other Western industrialised countries, technological progress in China is still mainly the preserve of institutions outside the private sector whereas in most OECD countries the enterprise sector is the primary driving force behind research and innovation. On the other hand, the Chinese innovation system has the advantage that strategic master plans can be implemented even against individual interests and that tremendous amounts of money are employed. At least in the short term, strong impulses on the economy result from such an industry-policy course. Another question is how sustainable such an industry-policy stance is, which in part does not include the business sector. Germany has a good and broad scientific and technological basis and is the leading nation in many areas. In order to maintain this position, it is necessary from a technology-policy standpoint to respond to the "Chinese challenge" - as also to the challenge from other countries - by strengthening efforts in education and innovation.