China must prioritise innovation to avoid being ‘strangled’ by US in next five years, top researcher says

China must prioritise innovation to avoid being ‘strangled’ by US in next five years, top researcher says

  • China Academy of Social Sciences (CASS) researcher Zhang Xiaojing says China ‘needs to rely more on itself’ to create growth drivers and combat decoupling
  • Current trade and technology disputes are the US ‘kicking away the ladder’ which China used to become the world’s second largest economy

China should prioritise innovation and building a higher level economy in its next five-year plan to create new drivers of growth, lift the nation’s core competitiveness, and, more importantly, avoid being “strangled by Washington”, a top Chinese government economist has recommended.Zhang Xiaojing, deputy head of the Chinese Academy of Social Sciences’ (CASS) Institute of Economics, said Beijing needs to focus inwardly given the country’s more challenging development environment – from the hostile attitude from across the Pacific, the global recession caused by the coronavirus pandemic to the major domestic economic risks.

“Innovation is the key ingredient in lifting a nation’s core competitiveness. It will facilitate the change of growth drivers in the new normal period, and also help to counter technological decoupling,” said Zhang.

Current US-China trade and technology disputes, key parameters for longer term planning and policymaking, are Washington “kicking away the ladder” which China used to become the world’s second largest economy, according to Zhang.