AI: The Latest Phase in the Digital Transformation

China’s Remarkable Rise as a Global-Class Innovator

Arie Lewin
Martin Kenney
2026
Authors: Arie Lewin, and Martin Kenney

China’s transformation from a manufacturing economy reliant on imported technology into a global innovation leader challenges established assumptions about technological catch-up and Western scientific dominance. This chapter examines the institutional changes underpinning that transformation and reassesses the more cautious outlook advanced in the 2016 edition of China’s Innovation Challenge. It traces improvements in patent quality, the recruitment of scientific talent, the expansion of research...

Rise of China as an Artificial Intelligence Power: Evolution, Explanation and Implications

Xinyi Zhang
Jun Sun
Kai Jia
2026

China’s position as an artificial intelligence (AI) leader is remarkable as it has nurtured a globally competitive ecosystem. Moreover, open-source programs developed in China are being adopted globally. This success is surprising when considered against the background of China’s previous relatively weak position in software and other advanced technologies. The chapter examines the process by which China became a global AI leader. We trace the development and governance strategies the Chinese government and firms adopted to become globally competitive. We assess China’s position in a world...

AI: The Latest Phase in the Digital Transformation