Inside China's innovation machine: A week of global attention

Editor's note: Lin G. is a CGTN economic commentator. The views expressed in this article are the author's own and do not necessarily reflect the editorial positions of CGTN.

In late March, just days after the conclusion of China's annual Two Sessions, Beijing and other Chinese cities entered what could almost be called forum season. Within a single week, a series of major international gatherings—policy forums, industry conferences, and technology summits—took place across the country.

Yet, the way these events were covered by international media revealed a particular pattern. Much of the reporting focused not only on the technological transformation currently unfolding within China itself, but also on how governments, corporations, and global markets are responding to it.

A prominent example was the China Development Forum (CDF) in Beijing, which brought together senior Chinese policymakers and leaders of major multinational companies such as Apple and Volkswagen Group. International coverage of the event largely highlighted how global businesses view China's competitive environment.

This perspective was captured in remarks from the leadership of Mercedes-Benz Group. "If you want to play football, you wanna play in the Champions League. The Chinese market is the Champions League of the automotive industry," said Ola Källenius, chairman of the Board of Management of Mercedes-Benz Group AG, during the forum.

A similar pattern could be seen in reporting on the Boao Forum for Asia, where discussions about regional cooperation and economic integration attracted widespread international attention. Industry events such as SEMICON China were also widely cited for the scale of China's semiconductor manufacturing expansion, often framed through projections of how China's growing capacity could reshape the global chip supply chain.

Taken together, these reports painted a picture of how the world is reacting to China's rise in technology and industry. But they said little about how that transformation is actually taking shape inside China itself.

An overlooked signal from a week of forums

Against this backdrop, another major technology event opened in Beijing: the ZGC Forum, also known as the Zhongguancun Forum. Compared with the global attention devoted to the other forums, it has received far less coverage from international media. Yet it may offer one of the most direct windows into how China's technology ecosystem operates—and how scientific breakthroughs are translated into industrial innovation.

At first glance, the forum looks like a typical science and technology conference. Each year it announces a list of major Chinese scientific breakthroughs. Recent announcements have included progress in areas such as controlled nuclear fusion, semiconductor memory technologies, and new discoveries from lunar samples returned by China's Chang'e missions.

Many of these breakthroughs appear highly technical and far removed from everyday life. Some may not translate into commercial products for years. 

But the real significance of the forum lies not in the announcements themselves—it lies in what happens around them.

The theme of the forum highlights this directly: "Full Integration Between Technological and Industrial Innovation."

During its five-day program, the event plans more than twenty matchmaking sessions connecting research teams, investors, and industrial partners. Over 500 technology projects are presented to potential investors and manufacturers. Venture capital firms, state-backed funds, and industrial groups attend in record numbers.

In other words, the forum functions less as a scientific conference and more as a marketplace for turning science into industry. This reflects a distinctive mindset that runs through China's technology ecosystem.

The mentality behind China's innovation push

What the Zhongguancun Forum reveals is not just new technology—it reveals a particular innovation mentality.

China's approach places extraordinary emphasis on rapid commercialization. Once a technological direction appears promising, enormous effort is devoted to transforming it into real products, platforms, and industries as quickly as possible.

Consider the current race in artificial intelligence. Globally, some of the most advanced models still come from the United States. But in terms of actual usage and deployment, Chinese models are expanding rapidly.

A more concrete example can be seen on OpenRouter, a platform widely used by developers to access and compare different AI models.

OpenRouter regularly publishes rankings based on actual model usage on its platform, measured by the total number of tokens processed through its API. In other words, the rankings reflect how frequently developers are calling and using different models in real-world applications.

The results are revealing.

While many observers still regard several American models as technologically leading, the usage rankings tell a more complex story. In OpenRouter's top ten models by token usage, a majority are Chinese models—roughly seven out of the ten.

The reason is straightforward: Chinese developers have pushed their models into the market with an unusually aggressive strategy. Many are free to use, open-source, or priced at extremely low levels, dramatically lowering the barrier to experiment with them.

Chinese companies such as StepFun, DeepSeek, MiniMax, Z.ai, and Moonshot AI appear prominently in these usage rankings. What makes this even more striking is that these companies are not tech giants, but young startups.

From a conventional business perspective, the strategy can look puzzling. Even in China, this is widely understood as a high-risk bet. Offering free or extremely cheap models does not guarantee success, and not every company pursuing this strategy will survive.

Yet the fact that so many companies and investors are willing to take this gamble reveals something deeper about the mentality of China's technology ecosystem.

Why are these companies willing to pursue such aggressive strategies?

The answer lies partly in the investors behind them.

Many of these startups are able to push their models into the market at little or no charge because their investors are willing to keep funding them. In other words, investors are consciously supporting a strategy of spending heavily on technology even at a loss.

To understand why this happens, one has to look at the structure of China's investment system.

China's venture capital ecosystem is no longer purely private in the way that it is in many Western economies. In a large number of funds, the capital itself is mixed. Part of it comes from private investors, but another significant portion often comes from government-guided funds, many of which are established or backed by local governments.

This hybrid capital structure changes how investment decisions are made.

Private capital still cares about returns, of course. But government-guided funds often evaluate projects using an additional dimension: strategic value. In other words, investors may consider not only whether a company can eventually generate profit, but also whether its technology contributes to broader national or regional development priorities.

These priorities are not abstract. China's long-term economic planning framework—most visibly expressed through its Five-Year Plans—sets clear strategic directions for technological development. The 15th Five-Year Plan places particularly strong emphasis on areas such as artificial intelligence, advanced manufacturing, and next-generation digital infrastructure.

Local governments, which frequently provide the capital for government-guided funds, are politically incentivized to align their investments with these national strategic priorities. This creates a very different investment environment from a purely market-driven system.

If a startup is developing technology that fits into these strategic directions, it may continue to receive support even when its financial statements do not show profits. That support can take many forms. Investors may continue to inject capital. Local governments may offer preferential policies. Some companies receive free office space or access to government-supported industrial parks. Others benefit from assistance in connecting with suppliers, manufacturers, or potential clients along the industrial chain. In many cases, local governments actively help coordinate these relationships, helping young companies integrate into broader industrial ecosystems.

From the outside, many of these practices may appear economically irrational. Yet within China's innovation system, these strategies make sense.

And over time, this system can help narrow the gap between scientific discovery and real-world industrial application. Technologies that initially appear distant from everyday economic activity may gradually find pathways into manufacturing systems, consumer markets, or digital platforms.

In a sense, the process resembles the famous response by physicist Michael Faraday in the nineteenth century when he was asked about the practical value of his early experiments in electromagnetism. Faraday reportedly replied: "What use is a newborn baby?"

A newborn baby does not yet generate value. Raising it requires years of investment, patience, and resources. But someone must be willing to raise the child.

China's innovation ecosystem, in many cases, has shown a remarkable willingness to do exactly that.

Looking beneath the surface

For international observers, forums such as the China Development Forum or the Boao Forum provide valuable insight into China's economic diplomacy and global partnerships. But they mostly reveal the outer layer of China's technological rise.

To understand the engine itself, one must look deeper—into events like the Zhongguancun Forum, where research institutes, venture capital firms, industrial groups, and policymakers converge to turn experimental technologies into commercial realities.

The lesson is simple: understanding China's innovation trajectory requires not only listening to its global dialogues, but also observing the mechanisms through which ideas become industries—mechanisms that are often less visible, yet from an insider's view may ultimately prove far more consequential.