China's Regulatory Will Propels Semiconductor Innovation, Securing 65% of Key Novel Patents

Paul Novosad recently highlighted China's successful innovation ecosystem, attributing its strength to its regulatory approach. He stated:

"Excellent article on why China's innovation ecosystem is working so well. Notably, political will for a regulatory system that makes new things possible instead of making them impossible." This perspective is strongly supported by recent analyses indicating China's strategic industrial policies and regulatory frameworks are actively driving technological advancements, particularly in critical sectors like semiconductors and green energy.

China's 15th Five-Year Plan (2026-2030) outlines a comprehensive strategy for innovation-driven growth, prioritizing industrial upgrading and technological self-reliance, according to China-Briefing. This national blueprint includes fostering emerging sectors and significantly boosting research and development. Furthermore, the Ministry of Industry and Information Technology (MIIT) recently intervened in the power battery sector to curb "involutionary competition," aiming to foster sustainable development and technological advancement by reshaping competitive dynamics, as reported by DiscoveryAlert.

This proactive regulatory stance has translated into significant innovation output. In the semiconductor industry, China accounts for 65 percent of total novel patents filed by China, the EU, and the US in hardware-intensive and production-oriented subfields, with a clear focus on 3D stacking for high-density memory, a Bruegel analysis revealed. This demonstrates China's rapid ascent in critical technologies, underpinned by substantial state support through programs like 'Made in China 2025' and 'Little Giants'.

Beyond semiconductors, China is actively boosting green industry cooperation, supporting its new energy vehicle, battery, and photovoltaic enterprises in global expansion, as stated by Minister Li Lecheng in China Daily. China's innovation ecosystem is characterized by a diverse mix of private and public entities across various sectors, enabling rapid commercialization and integration of digital technologies with manufacturing. This diverse approach contributes to its speed in replicating novel patents from other regions.

While the United States generally leads in overall radical novelties, China's state-orchestrated agility and large domestic market allow for faster absorption and adaptation of breakthroughs. This often sees China outpacing the European Union in critical technology replication. This strategic approach highlights China's commitment to becoming an innovation-led economy, with its policies designed to create a conducive environment for technological progress and industrial upgrading.