The biggest thing preventing modern China from becoming an innovation society, which is imperative if it hopes to keep raising incomes, is that it remains a very low-trust society….
There are two trends to watch: One, argued Ming Zeng, Alibaba’s chief strategist, is that Alibaba — which now serves more than 100 million consumers daily, through 6.5 million retail shops connected to 20 million manufacturers — is, in effect, creating “a virtual combination industrial park and online marketplace,” where anyone in China or abroad can come to invent, collaborate or buy and sell goods or services….
The other trend is that the Chinese will be big players on this grid. The creation of global trusted business frameworks like Alibaba is starting to enable a new generation of Chinese innovators — who are low cost, but high skilled — to extend their reach. We’ve seen cheap labor out of China; now we’re going to see more cheap genius.