Why Are Chinese Companies So Innovative?

Looking at the Polestar electric car (owned by a Chinese company, who also owns Volvo)–

Why and how are Chinese companies so innovative?

Some thoughts:

1. Copyright is a non-concept.

Americans looooove the notion of copyright, but to the Chinese (and most Asian countries), the concept is a non-concept. Perhaps it is because the American notion of individualistic ownership. Asian mentality believes in the collective over the individual which means:

No one person really ‘owns’ an idea, or ‘intellectual capital’.

2. For the greater good?

Another thing about the collectivistic Chinese-Confucian-Asian mentality:

We must do whatever is for the greater good of all, and towards that sake … many individuals must be sacrificed.

3. Long-term thinking

The Chinese are smart because they think very long term. They got a very long history behind them, and equally a very long future ahead of them (Lindy Effect by Nassim Taleb). Let us assume the Chinese empire has existed for ~3,000 years … it will probably still be around 3,000 years from now. America has only been around for ~240 years, which means the chance of it existing *BEYOND* the next 240 years is less certain.

4. The new-Chinese way of thinking

After Mao took over, he essentially destroyed the old confucian ways of thinking. And in some ways, this has liberated a lot of people and minds.

For example, the Chinese are hyper-entrepreneurial … caring more about ‘progress’ than old Confucian notions of the Mandarin-Scholar. And also (if you have ever been inside a high-end shopping mall), rich mainland Chinese have no shame in wearing ‘All Louis Vuitton Everything’, whereas the old Confucian way of thinking was more about modesty. In traditional Confucian mentality, modesty is greatly regarded. However the new Chinese mentality (regarding wealth, money) is:

If you got it, flaunt it.

And it is not seen as ‘bad manners’, whereas Americans still find it to be poor manners to flaunt one’s wealth.

As a result, the Chinese have a stronger desire and fervor to build their material riches in order to be able to flaunt that wealth. Whereas Americans are still toiling away (Benjamin Franklin style) in which one must procure as much wealth and capital as much as possible, but it is considered a sin to spend any of it.

As a result, generalized… the average Chinese entrepreneur might be more motivated than the average American entrepreneur.

5. But how far can copying get you?

No matter what, if you’re a rich Chinese mainland individual, you will always prefer the newest iPhone Pro over even the best Huawei or Xiaomi phone.

But perhaps this is the fatal flaw of Chinese/Asian thinking:

Innovation doesn’t happen by copying… it happens when one is more ‘Asberger’s-like’ and ignoring others.

Considering that Asian cultures care so much for outward appearances… one’s success can only be dictated by your relationship with others. The American individualistic notion (Steve Jobs) is to ignore all market trends, and ‘one must follow his/her own gut‘.

6. Brute Force

The great thing with China … deep pockets. You can ‘brute force’ things. You can produce things faster, because it is easier to bypass regulations (whereas in America, we get bogged down by bureaucracy and sluggish regulations).

In China if you want something built within a month, it will be built in a month. In America if you want something built, it may be done 10 years from now.

7. So what is the ideal approach?

I say a hybrid between the America and Chinese approach. Even if you consider the world politics today, it seems:

America is on top
China is second
Russia is third … only because they stay to themselves.

Even other countries like South Korea, Japan, and Singapore are still dependent upon the superpower of America, or general world stability to function. Same goes with Switzerland and Germany.