Long Read: As China Exhausts Low-Cost Advantage, Urgent Shift to Innovation Needed

A pivot is necessary as exports and inward foreign direct investment face headwinds, and an aging population presents a significant challenge

Solar panels cover the hills in Yuncheng, Shanxi province on June 3, 2020. Photo: VCG

China is entering a new stage of economic development, where low-cost production is no longer an advantage, exports and inward foreign direct investment face headwinds, and an aging population presents a significant challenge.

To sustain growth, China must pivot its economic model to focus on innovation, digital technology and the domestic market.

The core transition is from growth driven by low-cost advantages to growth driven by innovation.

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