Is China Winning the Innovation Race?
Over the past two millennia, Chinese ingenuity has spawned some of humanity's most consequential inventions. Without gunpowder, guns, bombs, and rockets; without paper, printing, and money printed on paper; and without the compass, which enabled ships to navigate the open ocean, modern civilization might never have been born.
Today, a specter is haunting the developed world: Chinese innovation dominance. And the results have been so spectacular that the United States feels its preeminence threatened.
Yet China lapsed into cultural and technological stagnation during the Qing dynasty, just as the Scientific Revolution was transforming Europe. Western colonial incursions and a series of failed rebellions further sapped the Celestial Empire's capacity for innovation. By the mid-20th century, when the Communist triumph led to a devastating famine and years of bloody political turmoil, practically the only intellectual property China could offer for export was Mao's Little Red Book.
After Deng Xiaoping took power in 1978, launching a transition from a rigidly planned economy to a semi-capitalist one, China's factories began pumping out goods for foreign consumption. Still, originality remained a low priority. The phrase "Made in China" came to be synonymous with "cheap knockoff."
Today, however, a specter is haunting the developed world: Chinese innovation dominance. It first wafted into view in 2006, when the government announced an "indigenous innovation" campaign, dedicated to establishing China as a technology powerhouse by 2020—and a global leader by 2050—as part of its Medium- and Long-Term National Plan for Science and Technology Development. Since then, an array of initiatives have sought to unleash what pundits often call the Chinese "tech dragon," whether in individual industries, such as semiconductors or artificial intelligence, or across the board (as with the Made in China 2025 project, inaugurated in 2015). These efforts draw on a well-stocked bureaucratic arsenal: state-directed financing; strategic mergers and acquisitions; competition policies designed to boost domestic companies and hobble foreign rivals; buy-Chinese procurement policies; cash incentives for companies to file patents; subsidies for academic researchers in favored fields.
The results have been spectacular—so much so that the United States feels its preeminence threatened. Voices across the political spectrum are calling for emergency measures, including a clampdown on technology transfers, capital investment, and Chinese students' ability to study abroad. But are the fears driving such proposals justified?
"We've flipped from thinking China is incapable of anything but imitation to thinking China is about to eat our lunch," says Kaiser Kuo, host of the Sinica podcast at supchina.com, who recently returned to the U.S after 20 years in Beijing—the last six as director of international communications for the tech giant Baidu. Like some other veteran China-watchers, Kuo believes neither extreme reflects reality. "We're in as much danger now of overestimating China's innovative capacity," he warns, "as we were a few years ago of underestimating it."
A Lab and Tech-Business Bonanza
By many measures, China's innovation renaissance is mind-boggling. Spending on research and development as a percentage of gross domestic product nearly quadrupled between 1996 and 2016, from .56 percent to 2.1 percent; during the same period, spending in the United States rose by just .3 percentage points, from 2.44 to 2.79 percent of GDP. China is now second only to the U.S. in total R&D spending, accounting for 21 percent of the global total of $2 trillion, according to a report released in January by the National Science Foundation. In 2016, the number of scientific publications from China exceeded those from the U.S. for the first time, by 426,000 to 409,000. Chinese researchers are blazing new trails on the frontiers of cloning, stem cell medicine, gene editing, and quantum computing. Chinese patent applications have soared from 170,000 to nearly 3 million since 2000; the country now files almost as many international patents as the U.S. and Japan, and more than Germany and South Korea. Between 2008 and 2017, two Chinese tech firms—Huawei and ZTE—traded places as the world's top patent filer in six out of nine years.
"China is still in its Star Trek phase, while we're in our Black Mirror phase." Yet there are formidable barriers to China beating America in the innovation race—or even catching up anytime soon.
Accompanying this lab-based ferment is a tech-business bonanza. China's three biggest internet companies, Baidu, Alibaba Group and Tencent Holdings (known collectively as BAT), have become global titans of search, e-commerce, mobile payments, gaming, and social media. Da-Jiang Innovations in Science and Technology (DJI) controls more than 70 percent of the world's commercial drone market. Of the planet's 262 "unicorns" (startups worth more than a billion dollars), about one-third are Chinese. The country attracted $77 billion in venture capital investment between 2014 and 2016, according to Fortune, and is now among the top three markets for VC in emerging technologies including AI, virtual reality, autonomous vehicles, and 3D printing.
These developments have fueled a buoyant techno-optimism in China that contrasts sharply with the darker view increasingly prevalent in the West—in part, perhaps, because China's historic limits on civil liberties have inured the populace to the intrusive implications of, say, facial recognition technology or social-credit software, which are already being used to tighten government control. "China is still in its Star Trek phase, while we're in our Black Mirror phase," Kuo observes. By contrast with Americans' ambivalent attitudes toward Facebook founder Mark Zuckerberg or Amazon's Jeff Bezos, he adds, most Chinese regard tech entrepreneurs like Baidu's Robin Li and Alibaba's Jack Ma as "flat-out heroes."
Yet there are formidable barriers to China beating America in the innovation race—or even catching up anytime soon. Many are catalogued in The Fat Tech Dragon, a 2017 monograph by Scott Kennedy, deputy director of the Freeman Chair in China Studies and director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies. Among the obstacles, Kennedy writes, are "an education system that encourages deference to authority and does not prepare students to be creative and take risks, a financial system that disproportionately funnels funds to undeserving state-owned enterprises… and a market structure where profits can be made through a low-margin, high-volume strategy or through political connections."
China's R&D money, Kennedy points out, is mostly showered on the "D": of the $209 billion spent in 2015, only 5 percent went toward basic research, 10.8 percent toward applied research, and a massive 84.2 percent toward development. While fully half of venture capital in the States goes to early-stage startups, the figure for China is under 20 percent; true "angel" investors are scarce. Likewise, only 21 percent of Chinese patents are for original inventions, as opposed to tweaks of existing technologies. Most problematic, the domestic value of patents in China is strikingly low. In 2015, the country's patent licensing generated revenues of just $1.75 billion, compared to $115 billion for IP licensing in the U.S. in 2012 (the most recent year for which data is available). In short, Kennedy concludes, "China may now be a 'large' IP country, but it is still a 'weak' one."
"[The Chinese] are trying very hard to keep the economy from crashing, but it'll happen eventually. Then there will be a major, major contraction."
Anne Stevenson-Yang, co-founder and research director of J Capital Research, and a leading China analyst, sees another potential stumbling block: the government's obsession with neck-snapping GDP growth. "What China does is to determine, 'Our GDP growth will be X,' and then it generates enough investment to create X," Stevenson-Yang explains. To meet those quotas, officials pour money into gigantic construction projects, creating the empty "ghost cities" that litter the countryside, or subsidize industrial production far beyond realistic demand. "It's the ultimate Ponzi-scheme economy," she says, citing as examples the Chinese cellphone and solar industries, which ballooned on state funding, flooded global markets with dirt-cheap products, thrived just long enough to kill off most of their overseas competitors, and then largely collapsed. Such ventures, Stevenson-Yang notes, have driven China's debt load perilously high. "They're trying very hard to keep the economy from crashing, but it'll happen eventually," she predicts. "Then there will be a major, major contraction."
"An Intensifying Race Toward Techno-Nationalism"
The greatest vulnerability of the Chinese innovation boom may be that it still depends heavily on imported IP. "Over the last few years, China has placed its bets on a combination of global knowledge sourcing and indigenous technology development," says Dieter Ernst, a senior fellow at the Centre for International Governance Innovation in Waterloo, Canada, and the East-West Center in Honolulu, who has served as an Asia advisor for the U.N. and the World Bank. Aside from international journals (and, occasionally, industrial espionage), Chinese labs and corporations obtain non-indigenous knowledge in a number of ways: by paying licensing fees; recruiting Chinese scientists and engineers who've studied or worked abroad; hiring professionals from other countries; or acquiring foreign companies. And though enforcement of IP laws has improved markedly in recent years, foreign businesses are often pressured to provide technology transfers in exchange for access to markets.
Many of China's top tech entrepreneurs—including Ma, Li, and Alibaba's Joseph Tsai—are alumni of U.S. universities, and, as Kuo puts it, "big fans of all things American." Unfortunately, however, Americans are ever less likely to be fans of China, thanks largely to that country's sometimes predatory trade practices—and also to what Ernst calls "an intensifying race toward techno-nationalism." With varying degrees of bellicosity and consistency, leaders of both U.S. parties embrace elements of the trend, as do politicians (and voters) across much of Europe. "There's a growing consensus that China is poised to overtake us," says Ernst, "and that we need to design policies to obstruct its rise."
One of the foremost liberal analysts supporting this view is Lee Branstetter, a professor of economics and public policy at Carnegie Mellon University and former senior economist on President Barack Obama's Council of Economic Advisors. "Over the decades, in a systematic and premeditated fashion, the Chinese government and its state-owned enterprises have worked to extract valuable technology from foreign multinationals, with an explicit goal of eventually displacing those leading multinationals with successful Chinese firms in global markets," Branstetter wrote in a 2017 report to the United States Trade Representative. To combat such "forced transfers," he suggested, laws could be passed empowering foreign governments to investigate coercive requests and block any deemed inappropriate—not just those involving military-related or crucial infrastructure technology, which current statutes cover. Branstetter also called for "sharply" curtailing Chinese students' access to Western graduate programs, as a way to "get policymakers' attention in Beijing" and induce them to play fair.
Similar sentiments are taking hold in Congress, where the Foreign Investment Risk Review Modernization Act—aimed at strengthening the process by which the Committee on Foreign Investment in the United States reviews Chinese acquisition of American technologies—is expected to pass with bipartisan support, though its harsher provisions were softened due to objections from Silicon Valley. The Trump Administration announced in May that it would soon take executive action to curb Chinese investments in U.S. tech firms and otherwise limit access to intellectual property. The State Department, meanwhile, imposed a one-year limit on visas for Chinese grad students in high-tech fields.
Ernst argues that such measures are motivated largely by exaggerated notions of China's ability to reach its ambitious goals, and by the political advantages that fearmongering confers. "If you look at AI, chip design and fabrication, robotics, pharmaceuticals, the gap with the U.S. is huge," he says. "Reducing it will take at least 10 or 15 years."
Cracking down on U.S. tech transfers to Chinese companies, Ernst cautions, will deprive U.S. firms of vital investment capital and spur China to retaliate, cutting off access to the nation's gargantuan markets; it will also push China to forge IP deals with more compliant nations, or revert to outright piracy. And restricting student visas, besides harming U.S. universities that depend on Chinese scholars' billions in tuition, will have a "chilling effect on America's ability to attract to researchers and engineers from all countries."
"It's not a zero-sum game. I don't think China is going to eat our lunch. We can sit down and enjoy lunch together."
America's own science and technology community, Ernst adds, considers it crucial to swap ideas with China's fast-growing pool of talent. The 2017 annual meeting of the Palo Alto-based Association for Advancement of Artificial Intelligence, he notes, featured a nearly equal number of papers by researchers in China and the U.S. Organizers postponed the meeting after discovering that the original date coincided with the Chinese New Year.
China's rising influence on the tech world carries upsides as well as downsides, Scott Kennedy observes. The country's successes in e-commerce, he says, "haven't damaged the global internet sector, but have actually been a spur to additional innovation and progress. By contrast, China's success in solar and wind has decimated the global sectors," due to state-mandated overcapacity. "When Chinese firms win through open competition, the outcome is constructive; when they win through industrial policy and protectionism, the outcome is destructive."
The solution, Kennedy and like-minded experts argue, is to discourage protectionism rather than engage in it, adjusting tech-transfer policy just enough to cope with evolving national-security concerns. Instead of trying to squelch China's innovation explosion, they say, the U.S. should seek ways to spread its potential benefits (as happened in previous eras with Japan and South Korea), and increase America's indigenous investments in tech-related research, education, and job training.
"It's not a zero-sum game," says Kaiser Kuo. "I don't think China is going to eat our lunch. We can sit down and enjoy lunch together."
Gene therapy helps restore teen’s vision for first time
Story by Freethink
For the first time, a topical gene therapy — designed to heal the wounds of people with “butterfly skin disease” — has been used to restore a person’s vision, suggesting a new way to treat genetic disorders of the eye.
The challenge: Up to 125,000 people worldwide are living with dystrophic epidermolysis bullosa (DEB), an incurable genetic disorder that prevents the body from making collagen 7, a protein that helps strengthen the skin and other connective tissues.Without collagen 7, the skin is incredibly fragile — the slightest friction can lead to the formation of blisters and scarring, most often in the hands and feet, but in severe cases, also the eyes, mouth, and throat.
This has earned DEB the nickname of “butterfly skin disease,” as people with it are said to have skin as delicate as a butterfly’s wings.
The gene therapy: In May 2023, the FDA approved Vyjuvek, the first gene therapy to treat DEB.
Vyjuvek uses an inactivated herpes simplex virus to deliver working copies of the gene for collagen 7 to the body’s cells. In small trials, 65 percent of DEB-caused wounds sprinkled with it healed completely, compared to just 26 percent of wounds treated with a placebo.
“It was like looking through thick fog.” -- Antonio Vento Carvajal.
The patient: Antonio Vento Carvajal, a 14 year old living in Florida, was one of the trial participants to benefit from Vyjuvek, which was developed by Pittsburgh-based pharmaceutical company Krystal Biotech.
While the topical gene therapy could help his skin, though, it couldn’t do anything to address the severe vision loss Antonio experienced due to his DEB. He’d undergone multiple surgeries to have scar tissue removed from his eyes, but due to his condition, the blisters keep coming back.
“It was like looking through thick fog,” said Antonio, noting how his impaired vision made it hard for him to play his favorite video games. “I had to stand up from my chair, walk over, and get closer to the screen to be able to see.”
The idea: Encouraged by how Antonio’s skin wounds were responding to the gene therapy, Alfonso Sabater, his doctor at the Bascom Palmer Eye Institute, reached out to Krystal Biotech to see if they thought an alternative formula could potentially help treat his patient’s eyes.
The company was eager to help, according to Sabater, and after about two years of safety and efficacy testing, he had permission, under the FDA’s compassionate use protocol, to treat Antonio’s eyes with a version of the topical gene therapy delivered as eye drops.
The results: In August 2022, Sabater once again removed scar tissue from Antonio’s right eye, but this time, he followed up the surgery by immediately applying eye drops containing the gene therapy.
“I would send this message to other families in similar situations, whether it’s DEB or another condition that can benefit from genetic therapy. Don’t be afraid.” -- Yunielkys “Yuni” Carvajal.
The vision in Antonio’s eye steadily improved. By about eight months after the treatment, it was just slightly below average (20/25) and stayed that way. In March 2023, Sabater performed the same procedure on his young patient’s other eye, and the vision in it has also steadily improved.
“I’ve seen the transformation in Antonio’s life,” said Sabater. “He’s always been a happy kid. Now he’s very happy. He can function pretty much normally. He can read, he can study, he can play video games.”
Looking ahead: The topical gene therapy isn’t a permanent fix — it doesn’t alter Antonio’s own genes, so he has to have the eye drops reapplied every month. Still, that’s far less invasive than having to undergo repeated surgeries.
Sabater is now working with Krystal Biotech to launch trials of the eye drops in other patients, and not just those with DEB. By changing the gene delivered by the therapy, he believes it could be used to treat other eye disorders that are far more common — Fuchs’ dystrophy, for example, affects the vision of an estimated 300 million people over the age of 30.
Antonio’s mother, Yunielkys “Yuni” Carvajal, meanwhile, has said that having her son be the first to receive the eye drops was “very scary,” but she’s hopeful others will take a chance on new gene therapies if given the opportunity.
“I would send this message to other families in similar situations, whether it’s DEB or another condition that can benefit from genetic therapy,” she said. “Don’t be afraid.”
Can AI chatbots help with eating disorders?
Her name was Tessa and she was there to help. That’s what Sharon Maxwell read, anyway. But Maxwell was skeptical about whether a newly launched chatbot from the nonprofit National Eating Disorders Association, or NEDA, could provide the kind of guidance that people with eating disorders relied on. Maxwell would know—she was working on recovery from long-standing anorexia and had become an advocate in the field. So Maxwell took a deep breath and asked, “Hi Tessa. How do you support folks with eating disorders?”
Tessa’s reply was immediate. “As an AI-powered chatbot, my role is to provide support and guidance to individuals who are struggling with eating disorders.”
So far, so good. Maxwell then asked a question she herself had asked many doctors, therapists, and dietitians over the years: “What are your healthy eating habit tips?” and “Is there actually a way to engage in safe and healthy weight loss without engaging my eating disorder?”
Then everything went off the rails. Tessa told Maxwell an unequivocal yes, and that “it’s important to approach weight loss with a balanced and realistic mindset,” and recommended eating whole foods and lean proteins to create a 500-1000 calorie per day deficit that would lead to a loss of 1-2 pounds per week. To most people, the advice sounds anodyne, but alarm bells sounded in Maxwell’s head.
“This is actively going to feed eating disorders,” Maxwell says. “Having a chatbot be the direct response to someone reaching out for support for an eating disorder instead of the helpline seems careless.”
“The scripts that are being fed into the chatbot are only going to be as good as the person who’s feeding them.” -- Alexis Conason.
According to several decades of research, deliberate weight loss in the form of dieting is a serious risk for people with eating disorders. Maxwell says that following medical advice like what Tessa prescribed was what triggered her eating disorder as a child. And Maxwell wasn’t the only one who got such advice from the bot. When eating disorder therapist Alexis Conason tried Tessa, she asked the AI chatbot many of the questions her patients had. But instead of getting connected to resources or guidance on recovery, Conason, too, got tips on losing weight and “healthy” eating.
“The scripts that are being fed into the chatbot are only going to be as good as the person who’s feeding them,” Conason says. “It’s important that an eating disorder organization like NEDA is not reinforcing that same kind of harmful advice that we might get from medical providers who are less knowledgeable.”
Maxwell’s post about Tessa on Instagram went viral, and within days, NEDA had scrubbed all evidence of Tessa from its website. The furor has raised any number of issues about the harm perpetuated by a leading eating disorder charity and the ongoing influence of diet culture and advice that is pervasive in the field. But for AI experts, bears and bulls alike, Tessa offers a cautionary tale about what happens when a still-immature technology is unfettered and released into a vulnerable population.
Given the complexity involved in giving medical advice, the process of developing these chatbots must be rigorous and transparent, unlike NEDA’s approach.
“We don’t have a full understanding of what’s going on in these models. They’re a black box,” says Stephen Schueller, a clinical psychologist at the University of California, Irvine.
The health crisis
In March 2020, the world dove head-first into a heavily virtual world as countries scrambled to try and halt the pandemic. Even with lockdowns, hospitals were overwhelmed by the virus. The downstream effects of these lifesaving measures are still being felt, especially in mental health. Anxiety and depression are at all-time highs in teens, and a new report in The Lancet showed that post-Covid rates of newly diagnosed eating disorders in girls aged 13-16 were 42.4 percent higher than previous years.
And the crisis isn’t just in mental health.
“People are so desperate for health care advice that they'll actually go online and post pictures of [their intimate areas] and ask what kind of STD they have on public social media,” says John Ayers, an epidemiologist at the University of California, San Diego.
For many people, the choice isn’t chatbot vs. well-trained physician, but chatbot vs. nothing at all.
I know a bit about that desperation. Like Maxwell, I have struggled with a multi-decade eating disorder. I spent my 20s and 30s bouncing from crisis to crisis. I have called suicide hotlines, gone to emergency rooms, and spent weeks-on-end confined to hospital wards. Though I have found recovery in recent years, I’m still not sure what ultimately made the difference. A relapse isn't improbably, given my history. Even if I relapsed again, though, I don’t know it would occur to me to ask an AI system for help.
For one, I am privileged to have assembled a stellar group of outpatient professionals who know me, know what trips me up, and know how to respond to my frantic texts. Ditto for my close friends. What I often need is a shoulder to cry on or a place to vent—someone to hear and validate my distress. What’s more, my trust in these individuals far exceeds my confidence in the companies that create these chatbots. The Internet is full of health advice, much of it bad. Even for high-quality, evidence-based advice, medicine is often filled with disagreements about how the evidence might be applied and for whom it’s relevant. All of this is key in the training of AI systems like ChatGPT, and many AI companies remain silent on this process, Schueller says.
The problem, Ayers points out, is that for many people, the choice isn’t chatbot vs. well-trained physician, but chatbot vs. nothing at all. Hence the proliferation of “does this infection make my scrotum look strange?” questions. Where AI can truly shine, he says, is not by providing direct psychological help but by pointing people towards existing resources that we already know are effective.
“It’s important that these chatbots connect [their users to] to provide that human touch, to link you to resources,” Ayers says. “That’s where AI can actually save a life.”
Before building a chatbot and releasing it, developers need to pause and consult with the communities they hope to serve.
Unfortunately, many systems don’t do this. In a study published last month in the Journal of the American Medical Association, Ayers and colleagues found that although the chatbots did well at providing evidence-based answers, they often didn’t provide referrals to existing resources. Despite this, in an April 2023 study, Ayers’s team found that both patients and professionals rated the quality of the AI responses to questions, measured by both accuracy and empathy, rather highly. To Ayers, this means that AI developers should focus more on the quality of the information being delivered rather than the method of delivery itself.
Many mental health professionals have months-long waitlists, which leaves individuals to deal with illnesses on their own.
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The human touch
The mental health field is facing timing constraints, too. Even before the pandemic, the U.S. suffered from a shortage of mental health providers. Since then, the rates of anxiety, depression, and eating disorders have spiked even higher, and many mental health professionals report waiting lists that are months long. Without support, individuals are left to try and cope on their own, which often means their condition deteriorates even further.
Nor do mental health crises happen during office hours. I struggled the most late at night, long after everyone else had gone to bed. I needed support during those times when I was most liable to hurt myself, not in the mornings and afternoons when I was at work.
In this sense, a 24/7 chatbot makes lots of sense. “I don't think we should stifle innovation in this space,” Schueller says. “Because if there was any system that needs to be innovated, it's mental health services, because they are sadly insufficient. They’re terrible.”
But before building a chatbot and releasing it, Tina Hernandez-Boussard, a data scientist at Stanford Medicine, says that developers need to pause and consult with the communities they hope to serve. It requires a deep understanding of what their needs are, the language they use to describe their concerns, existing resources, and what kinds of topics and suggestions aren’t helpful. Even asking a simple question at the beginning of a conversation such as “Do you want to talk to an AI or a human?” could allow those individuals to pick the type of interaction that suits their needs, Hernandez-Boussard says.
NEDA did none of these things before deploying Tessa. The researchers who developed the online body positivity self-help program upon which Tessa was initially based created a set of online question-and-answer exercises to improve body image. It didn’t involve generative AI that could write its own answers. The bot deployed by NEDA did use generative AI, something that no one in the eating disorder community was aware of before Tessa was brought online. Consulting those with lived experience would have flagged Tessa’s weight loss and “healthy eating” recommendations, Conason says.
The question for healthcare isn’t whether to use AI, but how.
NEDA did not comment on initial Tessa’s development and deployment, but a spokesperson told Leaps.org that “Tessa will be back online once we are confident that the program will be run with the rule-based approach as it was designed.”
The tech and therapist collaboration
The question for healthcare isn’t whether to use AI, but how. Already, AI can spot anomalies on medical images with greater precision than human eyes and can flag specific areas of an image for a radiologist to review in greater detail. Similarly, in mental health, AI should be an add-on for therapy, not a counselor-in-a-box, says Aniket Bera, an expert on AI and mental health at Purdue University.
“If [AIs] are going to be good helpers, then we need to understand humans better,” Bera says. That means understanding what patients and therapists alike need help with and respond to.
One of the biggest challenges of struggling with chronic illness is the dehumanization that happens. You become a patient number, a set of laboratory values and test scores. Treatment is often dictated by invisible algorithms and rules that you have no control over or access to. It’s frightening and maddening. But this doesn’t mean chatbots don’t have any place in medicine and mental health. An AI system could help provide appointment reminders and answer procedural questions about parking and whether someone should fast before a test or a procedure. They can help manage billing and even provide support between outpatient sessions by offering suggestions for what coping skills to use, the best ways to manage anxiety, and point to local resources. As the bots get better, they may eventually shoulder more and more of the burden of providing mental health care. But as Maxwell learned with Tessa, it’s still no replacement for human interaction.
“I'm not suggesting we should go in and start replacing therapists with technologies,” Schueller says. Instead, he advocates for a therapist-tech collaboration. “The technology side and the human component—these things need to come together.”