China's economy has made impressive strides in innovation over the past decade and is punching above its weight, World Economic Forum (WEF) economist Thierry Geiger said in an interview.
As WEF's head of analytics, quantitative research, global competitiveness and risks, Geiger spoke about China's position in the forum's latest Global Competitiveness Report published last week.
China ranked 27th in the latest global competitiveness index, as the highest ranking among the BRICS countries.
Among the 12 pillars of competitiveness calculated, China made prominent steady progress in terms of technological readiness, goods market efficiency and higher education and training.
"The progress observed in these areas suggests that the government is indeed focusing its efforts on the right priorities, but much remains to be done," said Geiger.
Geiger noted that since the 1980s, China has invested massively in basic education and infrastructure, which contributed to its rapid industrialization. But he said the gains from such investment are tapering off.
"New sources of productivity and growth are now to be found in more sophisticated areas: higher education, technological adoption, market reforms, among others," he said.
In this year's competitiveness index, China best-performing pillars are market size, macroeconomic environment and innovation. China ranks first in market size, considering the size of the domestic and export markets.
"Size matters because of economies of scale in production," noted Geiger, "On the demand side, the sheer size of China's increasingly affluent consumer base obviously lures investors."
Geiger also estimated that the macroeconomic environment remains favorable in China, with low inflation, a high savings rate and a level of debt that is still low.
On China's position regarding innovation, Geiger said, "This is very encouraging and fully in line with China's aspirations of 'upgrading' its economy under the new normal."
However, he noted that for innovation to spread and yield society-wide benefits, "bringing technology to the masses is critical".
