2.1 From G-2 to G-N: New Challenges Facing the Global Innovation Model

2.1.1 Deglobalization is Challenging the G-2 Innovation Model

Over the past 20 years, innovations worldwide were mainly implemented under the G-2 model, in which the US developed frontier technologies and profited from the commercialization of these technologies. The US has been the global innovation center since the Second World War, and the global leader in R&D investment for decades. A well-established education system, strong innovation atmosphere, and enthusiasm for science contributed to continuous breakthroughs in basic science in the US, leading to its solid leadership in cutting-edge innovation. In the early twenty-first century, the US began to swiftly commercialize its innovations through the manufacturing systems and large-scale markets in developing countries like China. The profits, in turn, helped sustain innovation in the US. As part of this process, China also enhanced its own technological strengths. The G-2 innovation model not only lowered the cost of using these innovations, but also propelled technological advances worldwide.

Nevertheless, the G-2 innovation model cracked under increasingly intense competition between the great powers. Europe and the US introduced restrictive policies on high-tech companies to curb the transfer of frontier technologies to other countries that were gaining on the global leaders. This has led to deglobalization in technological cooperation. In addition, as leaders such as Europe and the US attempt to bring manufacturing back home and reduce reliance on manufacturing imports from a single country like China, they are contributing to the creation of an “alternative” supply chain. Coupled with restrictions on exports of key components, we believe this has given rise to deglobalization in trading. Although China has strengthened innovation capabilities in basic science within fields such as high-speed railway and aerospace, it is still challenged by restrictions imposed on developing countries pertaining to most cutting-edge technologies. We believe that fields closely correlated with the mass market may be more affected.

2.1.2 Cooperation in Innovation with BRI Countries is an Option

With the G-2 innovation model no longer functional, the cross-border cooperation in innovation system needs restructuring. In the context of the challenges facing the G-2 innovation model, building an innovation system with like-minded BRI countries has become an option for China. We might call this structure the “G-N” innovation model. Its aim would be to facilitate the consolidation of human capital and scientific knowledge, expedite innovation and technological advancements, and help China avoid the middle-technology trap.Footnote 1 Moreover, the large-scale and multi-layered consumer markets of BRI countries may pave the way for the commercialization of innovation. Hence, we expect the G-N cooperation cycle to stimulate endogenous growth, and to enhance the sustainability of innovation in China and BRI countries, leading to mutual development (Fig. 2.1).

Fig. 2.1
A flow diagram. It presents the transition from G 2 technological transfer model, including U S frontier innovation, technology transfer, and market demand, to G N endogenous technology growth in China and B R I countries, resulting in cost reduction, global benefits, and technological progress.

Source CICC Global Institute

Restructuring of cross-border innovations: From G-2 to G-N.

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To begin with, the similarity in circumstances and core interests of China and BRI countries lays a solid foundation for establishing a new G-N innovation model. China and BRI countries face technological restrictions, setbacks in innovation, and a lack of endogenous growth momentum. They also share similar core interests as developing countries. This lays a solid foundation for G-N cooperation in innovation. We evaluate the similarity of national interests based on the results of 602 votes at the UN General Assembly by the top 75 countries in terms of total GDP over 2016–2021 (Fig. 2.2). Overall, we believe that these results indicate that China has strong diplomatic relationships with BRI countries, making it easier to cooperate with them in innovation.

Fig. 2.2
3 horizontal bar charts compare the similarity of votes at U N General Assembly by B R I and non-B R I countries versus countries. Left. All are B R I countries with values above 0.8. Centre. The United Arab Emirates has the highest value at 0.8. Right. Switzerland has the highest value at 0.6.

Source Erik Voeten, etc. (2017), UNCTAD, CICC Global Institute

Similarity of votes by China and other countries at UN General Assembly (2016–2021). Note Only 2019 data for top 75 countries by GDP according to UNCTAD (GDP over US $63 bn) included to exclude the impact of COVID-19.

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Second, we believe the market-driven cooperation in innovation among China and BRI countries (G-N innovation model) may leverage the “1 + 1 > 2” effect, with partnerships creating more value than the sum of the value generated by each participant. This could better connect supply and demand, as well as stimulate innovation cycles with endogenous growth (Fig. 2.3). On the supply side, BRI countries have innovation resources that are complementary to China to some extent, and we believe they will provide a foundation for technological R&D during cooperation in innovation. At the same time, BRI countries possess the necessary human capital and scientific expertise to support technological R&D. As of 2022, China and BRI countries accounted for around two-thirds of the global populationFootnote 2; around 400 mn of people in China and BRI countries had received higher education, with the total number of those employed in the R&D sector exceeding 16 mn. BRI countries in different regions specialize in various scientific disciplines, complementing China’s own resources in terms of human capital and scientific knowledge.

Fig. 2.3
A cycle diagram. Optimizing innovation resource allocation of supply-side knowledge creation accelerates the innovation process and drives demand-side product commercialization. This reduces costs and increases innovation returns, further enhancing knowledge creation via resource accumulation.

Source CICC Global Institute

Cross-border cooperation in innovation may be a better conduit for resources.

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On the demand side, the broad and diverse markets of BRI countries may facilitate the commercialization of innovation. BRI countries mostly comprise medium- to low- level consumers, making them potential niche markets for the existing mature technologies in the G-N innovation model. Catering to market demand in BRI countries may help China expedite the commercialization of various innovations, and accumulate funding and knowledge for the R&D of more advanced technologies, in our opinion. Furthermore, BRI countries span Eurasia, with some in Africa and Latin America. The broad geographical distribution, diverse cultures, and differentiated levels of development create multi-layered market demand for innovation.

Third, intensity, cohesiveness, and sustainability of cooperation are likely to be enhanced. Unlike government-backed infrastructure projects, innovation activities involve multiple entities, require longer-term cooperation, and are more reciprocal. This helps enhance trust between different entities, and reinforces the cohesiveness and sustainability of cooperation among China and BRI countries. Compared to most BRI countries, China holds visible advantages in innovation, and also ranks higher in comprehensive innovation capability.Footnote 3 Therefore, BRI countries are likely to improve their own levels of innovation by cooperating with China, and several projects have already been initiated. For example, a technology company in Vietnam imported several pieces of production equipment for solar water heaters from China via China-ASEAN Technology Transfer Center, and the Emirate of Dubai received a donation of 1 mn units of water-saving irrigation equipment via the China-Arab States Technology Transfer Center.Footnote 4

Finally, we believe that effective cooperation in innovation with BRI countries may reduce obstacles to China’s cooperation with non-BRI countries, hence countering deglobalization and enhancing the openness of the global innovation environment. Cooperation in innovation among China and BRI countries may expedite innovation in cutting-edge technologies, and technological advancements may help break the monopoly of Western economies such as Europe and the US. In turn, Western countries may consider it in their best interest to ease restrictions on these technologies. For example, China independently developed the high-performance computer Shuguang-1 in the early 1990s, driving Europe and the US to lift the ban on exports of computers capable of less than 1 bn calculations per second to China. The commercial value created from cooperation in innovation among China and BRI countries and the enhancement of their technological strength might weaken the impact of technological restrictions, thus attracting more European and US companies to join in the cooperation. As such, a more open and sustainable global innovation environment may become possible.

2.2 Lack of Support: Considerable Room for Improvement in G-N Model for Cooperation in Innovation

2.2.1 BRI Cooperation in Innovation Has a Short History, and Shows Path Dependency

The history of the BRI is nascent compared to that of international cooperation in innovation, and building an effective cooperation system between different countries takes time. The BRI was proposed in 2013, but it was not until 2016 that government departments, including the Ministry of Science and Technology (MOST), issued plans for cooperation in technological innovation among China and BRI countries.Footnote 5 MOST launched the first 14 BRI laboratories in 2019, and another 39 in 2020 and 2021. These labs are new and few, and are mainly used for technical assistance and teaching purposes. Their major hurdles include limited scope for cooperation and insufficient coordination between industrial deployment, talent recruitment, and technological development.Footnote 6

Cooperation in technological innovations among China and BRI countries is limited. The world’s top 76 economies signed a total of 591 bilateral science and technology agreements (STAs) over 2000–2020. Only 32% were signed among China and BRI countries, markedly lower than those signed between them and non-BRI countries (52%) (Fig. 2.4).

Fig. 2.4
A pie chart of the percentage distribution of the number of bilateral S T As between countries. Between B R I countries and China and non-B R I countries, 52. Among B R I countries and China, 32. Among non-B R I countries, 16.

Source WZB Berlin Social Science Center, CICC Global Institute

Existing science and technology agreements between countries. Note Data between 2000 and 2020.

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Moreover, BRI cooperation in innovation faces path dependency problems. Due to historical reasons, Europe and the US used to dominate cooperation in innovation among BRI countries, and global innovation still relies on the existing system built by Western countries, including organizational structure and talent exchange. Meanwhile, an effective system for the circulation of innovation resources and achievements is not yet available among BRI countries.

Judging by the overseas branches of research institutes, which are important for cross-border cooperation in innovation, non-BRI countries still play a dominant role in global cooperation in innovation. Of the existing 7,271 overseas branches of research institutes, only 332 or 5% are in BRI countries. In addition, the number of research institutes from BRI countries that have branches in non-BRI countries is also limited.

With Europe and the US dominating the intermediary agencies for cross-border innovation, the consolidation of innovation resources in BRI countries is also restrained. In 2022, over 80% of secretaries and project conveners at the International Organization for Standardization (ISO) and International Electrotechnical Commission (IEC) were from the 10 major standard-setting countries, and the proportion exceeded 50% at the International Telecommunication Union (ITU). Germany and the US accounted for the highest portion, while other countries with a large share were mostly from developed countries in Europe. China’s share of representatives at the three organizations was merely 10.4%, 6.1%, and 9.2%, and the proportion was lower for BRI countries.

Human capital, an important innovation resource, is flowing from China and BRI countries to non-BRI countries. As shown in Fig. 2.5, most overseas students in China and BRI countries prefer to study, work, and live in non-BRI countries, although the number of BRI countries is markedly larger than that of non-BRI countries. This indicates that BRI countries have yet to build a system for student exchange among themselves. Moreover, the exchange programs between China and BRI countries, mostly language-related or non-academic, still have room for improvement in terms of expertise and overall quality.Footnote 7 This was mainly due to relatively weak capabilities for scientific research and teaching, and weak global influence in these countries.

Fig. 2.5
A Sankey diagram compares the breakdown of overseas students from non-B R I countries, China, and B R I countries to China, B R I countries, and non-B R I countries. Most students from China and B R I countries prefer to move to non-B R I countries.

Source UNESCO, CICC Global Institute

Breakdown of overseas students by destination country (2022). Note Data as of 2021 for some countries.

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2.2.2 China and BRI Countries Have yet to Establish Effective Innovation Cycles

China and BRI countries have yet to create effective innovation cycles from the perspectives of both the output of cooperation in innovation and market consolidation. The number of academic papers co-written by authors from China and BRI countries is limited, while cooperation between China and non-BRI countries is significantly more frequent. Over 2016–2020, scholars worldwide published 4.42 mn academic papers via transnational cooperation, of which 398,000 papers (about 10%) were a result of cooperation among scholars from China and BRI countries, and 2.21 mn papers (over 50%) were between scholars from BRI countries & China and non-BRI countries. This suggests that China and BRI countries have the capability for cross-border academic cooperation, but currently cooperate more with non-BRI economies like the US and Europe, which have stable innovation systems.

Cooperation in patent applications among China and BRI countries is also limited. Of the 8.19 mn patents completed via transnational cooperation over 2016–2022, around 74,000 or less than 1% were developed among China and BRI countries, while less than 30% were between BRI countries & China and non-BRI countries, and over 70% were among non-BRI countries.

Furthermore, in order to materialize, innovations eventually need to be commercialized. However, the lack of market consolidation among China and BRI countries adds to the difficulty in realizing their value. As of 2020, the average cost of trade among BRI countries and China equals 313.12% of production cost, significantly higher than 193.73% for trading among non-BRI countries. This indicates higher trade barriers among China and BRI countries. The cost of trade between BRI countries and other countries is also high, making it hard for BRI countries to industrialize and sustain innovation.

2.3 Planning Ahead: Core and Structure of TNIS

Cooperation in innovation among China and BRI countries may lay a solid foundation for technological advances and organic economic growth. Nevertheless, BRI countries have yet to create an effective cycle of innovation, and it is imperative to build a system to better allocate the necessary resources. It is thus important to introduce the TNIS, and clarify how it should be built among BRI countries.

2.3.1 What is TNIS?

Simply put, TNIS is a system wherein entities that focus on technological innovation (including governments, corporations, research institutions, and intermediaries) collaborate in conducting cross-border innovation. We believe that an effective TNIS will facilitate the circulation of innovation resources across countries, including knowledge, human capital, funding, market opportunities, and technology standards, thus creating a more efficient cycle between innovation demand and output.

The core of TNIS lies in the structural coupling of innovation entities at the transnational level, i.e., the interaction and integration of market opportunities and innovation resources through cross-regional linkage of internationally influential innovation entities. For example, multinational corporations can establish subsidiaries in various global regions to apply technologies and knowledge to specific market segments, while research institutions can build networks through international conferences. In addition, mechanisms to exchange technical expertise and that promote innovation synergy and knowledge diffusion can be established, and standardization organizations can develop globally applicable technical specifications and product standards that provide a basis for division of international labor and cross-border trade. Finally, international financial institutions or consulting firms can collaborate with local counterparts to provide services for local companies. These are all examples of structural coupling of innovation entities at the transnational level.

TNIS for different fields of innovation activities, in which innovation entities coordinate in different ways, can have different characteristics. Innovation can be generally categorized into two types, STI and learning-by-doing, using, and interacting (DUI) innovation. STI is based on theoretical scientific breakthroughs, and is mainly circulated via papers, patents, and reports. The barriers to knowledge spillover are low. In contrast, DUI is based on experiential knowledge accumulated during production and from the interaction between producers and users. The barriers to knowledge diffusion and flow are high. From the perspective of market demand, innovations cater to standard demand (which means there is no need to adapt to specific markets and the homogeneity of value creation) and customization (which requires adaptation to various user preferences and production standards in different markets). The customization-based innovation should be rooted in circumstances in a specific region or country to satisfy user-specific heterogeneous demand.

A TNIS may be classified into four types depending on the characteristics of innovation and market demandFootnote 8: (1) “Footloose TNIS”, which hinges on STI and operates within the standardized market (e.g., artificial intelligence, medicine, microchips); (2) “market-anchored TNIS”, which relies on STI, but targets niche markets (e.g., farm animal breeding, precision equipment, sewage treatment); (3) “spatially-sticky TNIS”, which is predicated on DUI and localized markets (e.g., pipeline valves, handcraft); and (4) “production-anchored TNIS”, which capitalizes on DUI and standardized markets (e.g., automobiles, clothing, furniture, Fig. 2.6).

Fig. 2.6
A 4-quadrant graph of S T I or D U I versus customized or standardized. The quadrants from first to fourth are labeled footloose, market-anchored, spatially sticky, and production-anchored, respectively.

Source Binz & Truffer (2017), CICC Global Institute

Four types of TNIS.

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2.3.2 Initial Priority for Footloose and Spatially-Sticky TNIS

We believe that BRI countries will need to decide whether to synchronously develop all four types of TNIS or to prioritize certain types. Judging by the external environment and internal conditions of BRI countries, we believe it is imperative to build footloose and spatially-sticky TNIS before embarking on market- and production-anchored TNIS.

The fracture in the current G-2 innovation model has exerted a greater impact on industries corresponding to footloose and spatially-sticky TNIS, and it is therefore more urgent for BRI countries to restructure these two types of TNIS. A common feature of footloose TNIS industries is rapid technological advancement, and the US is more likely to pose restrictions on such industries due to security concerns. Spatially-sticky TNIS industries have less impact on the US economy, but may also be restricted by the US. Hence, it is of strategic importance for China and BRI countries to develop a G-N innovation model that focuses on footloose and spatially-sticky TNIS.

In addition, we believe that strategic patience in constructing market-anchored and production-anchored TNIS may help build a more open transnational innovation system and put global innovation resources to better use. Production-anchored TNIS mainly involves sub-frontier industries, and the production technology is mature. Chinese companies enjoy advantages in production scale, technology, and cost, and China’s leading position in these industries makes it economically costly for the US to decouple itself from China in the innovation system. Market-anchored TNIS mainly targets specific niche markets, and poses limited challenges to the technological position of the US. We think market-anchored and production-anchored TNIS industries may pave the way for global cooperation in innovation, and prevent absolute isolation from the frontier of technologies.

2.4 From Strategy to Tactics: Priorities for the Construction of the BRI Innovation System

2.4.1 Focus on Sub-frontier Innovations in the Building of Footloose TNIS

For footloose TNIS, we believe that cooperation within the G-N innovation model can focus on the sub-frontier of technological innovation. Footloose TNIS emphasizes innovation in cutting-edge technologies, which is time-consuming, requires heavy investment, and has a high risk of failure. Since it may be difficult for BRI countries to develop the necessary capabilities for developing cutting-edge innovations over a short period of time, we suggest that they focus on the sub-frontier of technological innovations, which has a clearer path to development and implementation. Moreover, the market resources in BRI countries are highly complementary to China’s technological strength, underpinning the construction of footloose TNIS for sub-frontier innovations.

At present, BRI countries generally do not allocate adequate resources for innovation such as human resources and capital toward the development of sub-frontier technologies, and the barriers to the flow of resources are high. The BRI innovation system is not yet capable of effectively concentrating human capital, and the number of overseas students majoring in the sub-frontier fields of technology in China is relatively small. The proportion of overseas students from BRI countries that study in China is currently not high, and nearly half of them major in liberal arts.Footnote 9 A survey of overseas Ph.D. graduates in China from BRI countriesFootnote 10 shows that only 6.3% of them chose to work in China.

We believe that government investment in funding for this sector may be currently inadequate, and policies encouraging investment in scientific research are limited to some degree. Judging by direct capital input, China and BRI countries do not have a high budget for cooperation in innovation. For example, in 2013–2023, China’s spending on scientific research under the BRI framework totaled less than Rmb3 bn. Policies in China that were favorable toward foreign investment in technological R&D mainly focused on tax reduction and exemption, such as a 10% cut to the income tax rate for high-tech companies, and the deduction of 175% of R&D expenses from pretax revenue. The stimulus is relatively weak and limited in scope compared with the various policy incentives adopted in Europe and the US (e.g., cash subsidies, loans, tax allowances, and patent boxes).Footnote 11

The barriers to the flow of innovation resources among China and BRI countries are high, and we believe that the institutional difference may hinder the agglomeration effect. China’s cooperation with BRI countries remains at the early stage of removing “hard” barriers. As of June 2023, China had announced joint statements with 49 BRI countries in fields such as legal cooperation and intellectual property rights,Footnote 12 stressing the synergy between basic law and the regulatory system. However, without a multi-lateral cooperation framework and authorized entity, related disputes between BRI countries still pose a challenge.Footnote 13

We believe that governments can centralize scientific research resources and increase input in public goods and incentives for scientific research as they seek breakthroughs in the sub-frontier of major technologies. Sub-frontier technologies still fall into the category of “scientific innovations” and have strong positive externalities. We believe that companies and research institutions may lack the willingness or capability to develop sub-frontier technologies, which is both time-consuming and expensive. Hence, we think governments may play a leading role in this aspect.

To expedite the supply of sub-frontier technologies, we think the government can set up scientific innovation centers in countries or regions with higher levels of economic openness. The agglomeration effect can be strengthened through division of labor and knowledge spillover, e.g., by establishing close connections among colleges, research institutions, and sci-tech companies in BRI countries, and providing funding and infrastructure facilities for the development of sub-frontier technologies like semiconductors and artificial intelligence.

Moreover, we believe the government may acquire and retain skilled personnel by launching special talent selection programs or scholarships and grants and introducing policies like preferential tax and residence permits. Considering the cultural and institutional differences between BRI countries, we believe a unified technology standard should be set to coordinate intellectual property protection, and digital technology can be used to expand the scope of cooperation.

2.4.2 Spatially-Sticky TNIS Matches Supply with Demand in Niche Markets

We believe that the spatially-sticky TNIS G-N innovation model should focus on niche markets in BRI countries, enhancing the efficiency of aligning technological expertise with the localized needs of different countries. Spatially-sticky TNIS industries can create niche markets in certain regions based on localized demand and enhance the match between existing innovations and potential demand in other regions. The G-N innovation model entails considerable scope for cooperation within numerous niche markets. BRI countries can mutually benefit from each other’s stores of knowledge and transfer domestic mature technologies to other countries, enhancing the exchange of innovation. Furthermore, a precise match with demand would improve cooperation and strengthen user stickiness, laying a solid foundation for future cooperation.

The lack of BRI-led intermediaries and supply–demand mismatch has resulted in insufficient structural coupling among multinational innovation entities in BRI countries. For example, cooperation networks for multinational innovation entities and their subsidiaries in BRI countries still need improvement. According to the United Nations Statistics Division-Organization for Economic Co-operation and Development (UNSD-OECD), among the global top 500 multinational enterprises (MNEs) and their about 122,000 subsidiaries in 2021, 82% of MNEs and 75% of subsidiaries were set up in non-BRI developed countries and regions, and they were the main builders of the global innovation network. Overseas branches of these MNEs on average covered around 38 countries and regions, nearly three times that of MNEs from China and BRI countries (around 14, Fig. 2.7).

Fig. 2.7
A scatterplot and a bar chart plot the number of top M N Es around the globe and their average regional coverage versus non-B R I countries, China, and B R I countries. The U S leads with the highest M N Es at 230, while Denmark has the highest average regional coverage.

Source UNSD-OECD, CICC Global Institute

Number of MNEs from BRI countries and overseas market coverage. Note Company location based on place of registration; for companies registered on Cayman Islands we use the location of parent companies.

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Moreover, the current BRI innovation system lacks intermediaries like consulting firms, which are essential for spatially-sticky TNIS and mostly originate from non-BRI countries. This makes it difficult to match supply and demand in the innovation markets of BRI countries. Among the Forbes 2022 list of top global consulting firms, nearly 90% were from the US, Germany, the UK, and France. Moreover, non-BRI countries accounted for around three-fourths of the global consulting services market.Footnote 14

Innovation intermediaries in BRI countries can be improved to reduce information asymmetry and transaction cost, boosting the coupling of other innovation entities. In the spatially-sticky TNIS system, knowledge creators and end-consumers are normally not in the same geographical region. This calls for interconnective channels to match supply with demand. Theoretically, companies and scientific research institutes can independently seek trading partners through MNE subsidiaries or branches; yet with the absence of a mature cooperation mechanism, establishing subsidiaries or branches in BRI countries may lead to major risks. Since a reliable cooperation network is unlikely to be established over the near term, we think it may be more practical to prioritize improving MNE intermediaries that focus on innovation and enhancing the cooperation between them.

We believe the issue of information asymmetry can be addressed through steps such as building an information sharing platform between BRI countries which consolidates data on national conditions provided by research institutes. Consulting firms for cross-border businesses and legal affairs can be established to link MNEs to local distribution channels and offer innovation entities information on local legislation and business prospects. In addition, innovation-oriented financial companies such as those focused on private equity and venture capital, and investment and commercial banks, can be developed to provide innovation entities with financial services such as financing, guarantees, and risk prevention, control, and management. This would help lower the trading cost of innovation. Furthermore, the transnational coupling in the early stage may incur a high fixed cost. We believe that the government can provide initial support for public goods such as information and start-up capital to facilitate the construction of transnational innovation intermediaries.

2.4.3 Market-Anchored and Production-Anchored TNIS Can Enhance the Openness and Sustainability of the Innovation System

After innovation entities and their transnational coupling improve, the market-anchored and production-anchored TNIS may continue to strengthen the BRI innovation system. Construction of market-anchored TNIS requires continued penetration into localized markets. There are three major ways to achieve this, in our opinion. Firstly, government-level conversation and cooperation can be strengthened, and a memorandum of understanding on cooperation can be signed to safeguard the lawful rights and interests of innovation investment and innovation products. Secondly, international intermediaries can be established to reduce or remove barriers to cooperation such as languages, tariffs, and standards, while financing, valuation, evaluation, and transaction services can be provided via international financial institutions. Thirdly, communication between countries exporting technology and those receiving it can be strengthened so as to provide technological guidance and help cultivate localized talent in receiving countries.

The establishment of production-anchored TNIS requires the continued promotion of a globalized market. In a production-anchored TNIS innovation system, knowledge is usually generated from localized industrial clusters. Innovations are verified in local niche markets, and then sold worldwide. The commercialization of innovations needs marketing in the global market. We believe it is therefore necessary to enhance MNEs’ capabilities for overseas operations. For example, MNEs can be encouraged to invest overseas, and participate in the M&A of local distribution channels. Marketing and aftersales services for innovation products can be strengthened to enhance brand image. Moreover, intermediaries for international marketing and consulting services can be established to prevent unnecessary losses.

Market-anchored and production-anchored TNIS innovations can serve as a bridge to prevent the BRI innovation system from becoming a technological “isolated island”. China and BRI countries boast intrinsic advantages in market-anchored and production-anchored TNIS cooperation. Developed countries currently have limited restrictions on these two types of industries, and this may serve as an entry point to enhancing the openness of the BRI innovation system. For example, the US, the UK, and Germany have expressed interest in cooperating with China in the construction of high-speed railways. Although such cooperation did not materialize due to various reasons, we do not rule out the possibility of such cooperation in the future given China’s visible advantages in such industries.

For market-anchored and production-anchored TNIS industries, we think China and BRI countries can enter Europe and the US market via MNEs, and start with basic transactions and market cooperation. As trading scales up, cooperation with Western scientific research institutions and governments can be gradually expanded from general technologies to cutting-edge technologies. Hence, China and BRI countries can strengthen their own innovation capabilities, and their leading position in some cutting-edge fields will attract developed countries to join the cooperation, in our view. Moreover, countries or entities willing to participate in the building of the BRI innovation system should be welcomed, setting a good example for global cooperation in the future.