What Business Leaders Still Don't Understand About China
China's manufacturing and innovation advantage is widening rather than narrowing, and most Western policymakers and executives are underestimating the pace of change.
Summary
In this HBR interview, Harvard Business School's Willy Shih argues that China's manufacturing and innovation capabilities are accelerating rather than plateauing, contradicting the common Western narrative of a maturing or slowing Chinese economy. He warns that policymakers and executives systematically underestimate the speed of Chinese technological advancement, creating a strategic blind spot for companies competing globally in manufacturing-intensive industries. The piece is framed as part of HBR's "Executive Agenda" series for C-suite readers.
Editor's opinion
The “play a different game” framing and the capital-allocation-horizon point (R&D reinvestment over dividends and buybacks as a source of compounding advantage) are genuinely useful strategic ideas, and Shih’s direct factory observations give it more texture than a desk-research piece. But it’s a short newsletter interview digest, not a full article -- the stats (25% export growth, 130 EV brands, the shipyard comparison) are asserted rather than sourced in detail, and the Ford/SpaceX examples are gestured at rather than developed into an actual framework for “finding untapped market opportunities.” Directionally right and useful context, but thin as an evidenced strategic argument.
Key concepts
China manufacturing advantage · Executive Agenda framing