For China, there is no way out but to innovate.
Its economic growth has slowed from double-digit rates to single digits. Drivers of growth -- the exports, property sales and manufacturing that have served so well for decades, have waned. Exports, in particular, will never again play the role they did before the global financial crisis.
The crisis and its aftermath have prompted developed nations to rethink their mode of growth, generating strategies such as Industry 4.0 in Germany and Re-industrialization in the United States, all based on new technology.
The new trends in these countries with advanced manufacturing capacities, and mushrooming lower-cost manufacturers in emerging nations have exerted double pressure on China, eroding its global competitiveness.
Meanwhile, China is increasingly aware of the environmental prices it will have to pay if it lingers in the labor- and resource-intensive section of the global manufacturing chain.
Overcoming these challenges while achieving its development goals can only be accomplished through industrial modernization. China is pegging its future prosperity on an economy underpinned by science and technology.
That strategy is to encourage research and development (R&D), the generation of new ideas, and scientific progress. It will support entrepreneurs who take a chance to make new technology and ideas to scale and generate better and cheaper products and services.
Denying the Western stereotype of a hard-working and uncreative "world's factory" that churns out mounds of low-quality goods, China is now closing the gap on innovation.
The country's R&D spending, second only to the United States, grew by more than 11 percent annually during the past three years.
The investment is paying off. China is now home to some of the world's most innovative companies, particularly in the fields of mobile technology, biotechnology and medical services.
Shenzhen-based telecom equipment producer Huawei employs nearly 80,000 R&D employees and spends 10 percent of its annual budget on R&D. The company held its place as the top international patent filer in 2015 and has been charging Apple patent fees.
BGI, also headquartered in Shenzhen, is now one of the world's largest genomics companies. It has sequenced more DNA than any other institutions worldwide and helped cut the cost of sequencing a complete genome.
There are plenty more -- the business model that led Alibaba to retail domination, the development of the world's longest high-speed rail network, the world's highest-elevation railway and the world's fastest supercomputer.
It's true China still lags behind in some ways. The country needs further reforms and better protection of intellectual property rights.
Yet for a country that invented paper, gunpowder and the compass, its ambitions could be realized.
