At the end of March 2025, the Chinese Academy of Science and Technology for Development released the National Innovation Index Report 2024. According to the report, China ranked 10th in the National Innovation Index, rising significantly from 20th place in 2012 over the course of a little more than a decade. This is a highly symbolic milestone, marking the first time a middle-income country has entered the top ten.
What is the National Innovation Index?
First, let’s clarify what this ranking actually measures. The National Innovation Index evaluates the innovation capacity of countries across five key dimensions:
- Innovation Resources
- Knowledge Creation
- Enterprise Innovation
- Innovation Performance
- Innovation Environment
These dimensions encompass comprehensive indicators such as R&D investment, number of patents, influence of scientific publications, industrial structure, and policy/legal systems. In other words, this index assesses not just how much a country spends on research or how active its startups are, but how well it has developed a sustainable system for generating new value at the national level.
The Drivers Behind China’s Rapid Ascent
What’s particularly noteworthy this time is not just that China made it into the top 10 overall, but the speed at which it climbed the ranks. Key highlights include:
- Among the world’s top in number of R&D personnel, STEM graduates, and highly cited researchers
- Ranked first globally in both number of highly cited scientific papers and valid invention patents held
- Accounts for 22.3% of global high-tech exports
These achievements signal that China is evolving from a “manufacturing powerhouse” into a “knowledge creation nation.” Improvements in institutional frameworks—such as increased state-led R&D investment, stronger university-industry collaboration, and a more developed venture capital market—have also contributed to this progress.
Remaining Challenges: The Gap Between Outcomes and Environment
On the other hand, China’s rankings in “Innovation Performance” (22nd) and “Innovation Environment” (20th) are relatively low compared to its overall score. These results reveal lingering issues, such as underdeveloped infrastructure and systems, weak intellectual property protections, and challenges in the international investment climate.
In particular, its ranking of 34th in “Rule of Law” indicates that building trust with global companies and research institutions remains an area for future improvement.
A Tri-Polar World: Asia’s Rising Influence
The report states that the global innovation landscape is increasingly shaped by a tri-polar structure: North America, Europe, and Asia.
- North America (primarily the U.S. and Canada) remains the largest R&D investment hub
- Europe, led by technology-driven nations like Switzerland and Germany, continues to play a key role
- Asia’s influence is expanding rapidly, with China, Japan, South Korea, and Singapore at the forefront
Among these, China’s rise is particularly striking, and it is now becoming a central figure in Asia’s innovation scene.
How Should Japan Respond?
In many areas, China has already surpassed Japan in innovation-related metrics. Depending on future developments, the gap could widen further. Japan needs to push for more aggressive reforms to foster innovation and elevate the status of its engineers and researchers.
For example:
- Strategic “selection and concentration” in R&D investment
- Promotion of international collaborative research
- Bold deregulation to support ventures and startups
Whether Japan can commit to and implement these measures seriously will greatly influence its future competitiveness.
In Conclusion
This latest ranking illustrates that China is truly transforming into a nation competing globally in science and technology. As the battle for technological dominance intensifies worldwide, Japan and other advanced economies must reassess their own positions.
Going forward, close attention to the trends revealed in the National Innovation Index will be key to understanding the future.