Journal of Knowledge-based Innovation in China

Purpose – “China phenomena” is changing the knowledge balance of the world. Many countries, in particular, Western countries, are carefully following the development and change of China's technology system and innovation policy. After turning itself into the world's manufacturing powerhouse, China aims to be an innovation-oriented country. The purpose of this paper is to list some of the key factors which favor or hinder China's efforts to build an innovative economy.

Design/methodology/approach – The paper lists some of the key factors, which favor or hinder China's efforts to build an innovation-oriented country. The factors identified are summarized from a literature review on studies about China's efforts to build innovation capabilities.

Findings – The paper finds that three key factors favor China's efforts to build an innovation-oriented country, including escalating R&D spending, the upgrading of technological capabilities and global linkages. Four central challenges are facing China, such as how to build human resources, innovative cultures and incentive systems appropriate for innovation and how to strength intellectual property rights protection.

Originality/value – Today, China is, by and large, a follower rather than an innovator in technology. The question whether China will become a real innovative economy in the next 13 years is hard to answer. This paper lists some of the key factors which favor or hinder China's effort to build an innovation-oriented economy, all of which should be of interest to China's scholars, government officials and practicing managers.