The Rise of China: Innovation or Cost Leader

Years ago, when Lee Kuan Yew, the founding father of modern Singapore, was asked in a conference in Barcelona about the innovation of China; he told this story: Lee was then meeting the president of Siemens and he launched the question of which country was more innovative: India or China? Most people, including the Chinese present, were expecting the answer to be India. However, to Lee Kuan Yew’s surprise, the reply was China. Why? The explanation was simple: Siemens had Research and Development (R&D) Centers in both India and China. When a problem was sent to two centers for solution, both came back with results before established deadline. However, the R&D center in China provided several alternatives in addition to the result requested.