Innovation works in China as its ecosystem is younger than most developed countries

Editor’s note:

KAZUMA Takimoto is a researcher at Fukuoka Asian Urban Research Center (URC) and a fellow at Fukuoka Directive Council (FDC). In a recent interview with Shanghai Daily columnist Wan Lixin he shared his impressions of China. Takimoto studied Political Science and Economics at Waseda University in Tokyo, but quit the university in 2011, and was graduated from Columbia University in 2015, where he majored in East Asian Studies (with a focus on Chinese Economy).

Q: Last time we met, you mentioned about innovation in China. Can you elaborate on that?

We Japanese are now finally getting familiar with innovations from China such as Alipay and Mobike. They are totally different from what we pictured “Made in China” would be a decade ago in terms of their creativity and universality. We are also stunned by the possibility of them becoming a part of our own life in Japan.

China’s ecosystem for innovation is efficient. What is convenient for people’s lives actually prevails in society.

I think that is because the Chinese ecosystem is younger than most developed countries and therefore there are fewer traditional groups of interest, or their voices are smaller. Moreover, even those traditional groups have an attitude to incorporate innovation. China’s speed of implementing innovation has therefore accelerated, and that motivates other innovative ideas to follow and come up simultaneously. That is a virtuous cycle.

Nowadays, more and more Japanese media are reporting innovation from China, resulting in more Japanese people recognizing it. And to their surprise, the ideas and technologies surrounding the innovation look very creative. I can see that people around me are changing their views on China. I think Chinese innovation is the most effective way to change the Japanese people’s views on China — in a positive way.

Q: How do you draw that conclusion?

I think I should mention Mobike here, since I have been instrumental in introducing it to Japan. I met Mobike’s head of international expansion in April, visited Mobike’s headquarters with my boss, Shuhei Ishimaru (Director General of FDC), to talk with the CEO in May, and Mobike Japan was established in Fukuoka City in June.

The speed was impressive and I expected Mobike to do well in Japan, but, of course, the reality was not that easy. Japan’s rules on roads and bikes are completely different from China’s, and Mobike Japan is struggling to agree with local and national governments of Japan on how shared bikes should be incorporated into the existing social infrastructure of Japan.

I have seen every step of its development in Japan since Day 1, and I think that this example of Mobike Japan is a great showcase of what Chinese unicorns must understand regarding how unique and stubborn the Japanese society is when entering the Japanese market.

To ensure that this does not become another hindrance in the Japan-China mutual understanding, I would like to clarify that Chinese companies in Japan are struggling not because the Japanese do not want to accept them, but because Japan and China have many differences (extremely different in some areas) in social systems in spite of the cultural linkage.

Q: You have just visited Shenzhen. How do you find it compared to other Chinese cities?

Shenzhen is young and open to everyone. As a foreigner, I feel more welcome in Shenzhen than in other cities in China. Many young Chinese living and working in the city can speak English pretty well and the technological edge of the city is helping to create a laowai-friendly atmosphere. Shenzhen is now globally well-known as an innovation hub with its annual GDP growth, and I can feel the energetic vibe of the city and its people (both Chinese and foreigners) increasing every time I visit the place.

People there, regardless of nationality, are putting every effort to create something new, and that atmosphere makes Shenzhen a genuinely global hub of innovation. Linked with other innovation hubs around the world, Shenzhen has the potential to continue to grow and absorb talent from around the world.

Q: The Chinese government has been active in creating incentives for innovation. What do you think are the most effective means to foster innovative spirit, particularly keeping the Japanese experience in mind?

I am closely observing the Chinese government’s moves on fostering innovation.

As I mentioned above, the Chinese ecosystem already looks efficient and I don’t know if the government’s intervention can add to that. Fostering innovation is not what the government can direct. This is a theory commonly shared in Japan today.

When economy is experiencing a boom, the government becomes confident that they can actually control the sources of innovation. They invest in developing the environment for innovation.

But once the economy starts to stagnate, fostering innovation gets extremely difficult with innovative spirits shrinking and entry barriers getting more considerable (this is Japan’s situation right now).

When inventing the kind of business like shared bikes, for instance, we would have to talk with the government first to get permission. But in China, innovation often comes before regulation. It is another virtue of the Chinese ecosystem and has made Chinese innovation successful so far.

Q: From your observations, how do young Japanese view China today?

Most young Japanese’s perception of China is vague at most. They do not know China as much as young Chinese know about Japan. Among young Japanese, there is almost nothing related to China shared or talked about. They mostly see China in news programs on TV. So, I would say that young Japanese’s views on China are built upon very scarce information.

Obviously that occurs because of the asymmetry of “soft power” between the two countries. Modern Japanese culture is widespread in Asia and China through so-called pop culture, while that of China is not in Japan. Young Japanese have few chances to know what young Chinese like or how they live.

But the young generation is more flexible. Of course, historical issues between Japan and China can never be forgotten, though we also need to think about the better future of ours. And for this goal, more and more cultural exchange between the two must be accelerated.

The Japanese young generation, especially of my age (born after 1990), is a sad generation of the modern Japanese history. When we were born, Japan’s Bubble Economy collapsed (or had collapsed) and we never experienced economic upturn. We don’t have faith in our economy. But that has created a better characteristic of us than previous generations; we are ready to accept the reality that China’s innovation can create new world standards.

Thus, I think one key to fostering soft power of China that young Japanese could find attractive is a Chinese futuristic city like Shenzhen with the vibe of the rapid economic growth. Something exciting fascinates the youth, and the type of excitement Shenzhen offers can only be found in China today.

New futuristic Chinese cities are soft power of today’s China and can be a benchmark for young Japanese.

Q: You mentioned about one of your grandfathers being a long time subscriber to the People’s Daily. Could you elaborate? Did he have any influence on you?

My paternal grandfather, when he was young in the late 1920s, went to Shanghai, to witness its growth as a global hub city. He was fascinated and became a fan of China. Even after he came back to Japan, he maintained a continuous interest in China. He wanted to keep himself updated about new China, so he started to subscribe to the People’s Daily in 1950s. Back then, he owned a sake brewery in Kyoto, which still exists today. He had died when I was born, thus I was not directly influenced by him. But, my father and his siblings have been an influence.

My maternal great grandfather was a professor at the medical school of Tohoku University in the 1900s, and had met Lu Xun. Although my great grandfather was not the famous Professor Fujino Lu Xun mentioned, he also became a good friend of Lu Xun, who sent him a work of calligraphy to show his gratitude. It is interesting to realize that my families have had connections with China since a while ago.

Q: Which Japanese city means most to you?

I chose Fukuoka, not Tokyo, as my base in Japan, because this city has the deepest historical relationship with China (Fukuoka was the entry point of trade with China since the Han Dynasty) and therefore should be the frontier of Japan-China relationship even today. My think tank, under the supervision of Takayuki Kubo (Senior Researcher of URC), published a report that the city still has the strongest tie with China, especially with Shanghai, in terms of exchange of talent, businesses and goods.

I think the city has the potential of becoming a launch pad of Chinese businesses entering the Japanese market for the new era of Japan-China relationship. There is enough mechanism to support it (including the local governments). I hope more and more Chinese companies would take advantage of the environment as Mobike is doing now.

Kyoto is another base of mine in Japan. I spent my high school period (6 years) in the city. The city is full of history and beauty. In terms of the city’s bond with China, I would like to cite one of my Chinese friends’ remark which deeply touched me: “Kyoto reminds me of Chang’an, the Chinese capital during the Tang Dynasty. I felt like I was living in the world of Bai Juyi’s poems, walking down on Kyoto’s historical streets with old houses and temples alongside.”