China buying up Facebook? Which one really needs innovation?
Reports of China's investment arm seeking a chunk of Facebook puts a spotlight on Beijing's long march for home-grown innovation. Real tech breakthroughs, however, require more freedom than China has.
If these two giants do end up collaborating, it would be quite a change in relationship status for both of them. In sheer numbers, Facebook users will soon equal the population of China.
For now, the sale of any Facebook stock to China’s official investment arm remains speculative. Still, it is worth speculating on why China might even want an inside track on one of America’s most innovative companies.
Is it an admission that China’s effort to create an “innovation oriented society” by 2020 is failing and that it still needs the talent and ideas of other nations to keep its busy-bee economy going?
That is not Washington’s perspective. Ask high-level Pentagon officials what is their greatest concern about the future and you’ll likely hear about China’s massive investment in science and technology.
For more than 15 years, China’s ruling Communist Party has pushed the importance of “indigenous innovation” and the need to “leapfrog” over Japan and the West in research frontiers. It cites a worrisome dependence on foreign technology, even as it still unabashedly extracts know-how from outside companies wishing to invest in China.
China knows it will soon need its own discoveries and innovations to maintain competitiveness. Many of its sophisticated tech companies have reached world-class levels and now must beef up their R&D efforts and stoke creativeness out of their staff. And the rest of world is becoming defensive toward China’s ways of gaining access to labs and intellectual property.
To really be a world innovation leader, China faces two big hurdles.