I think that 15 years ago that was true of Korean manufacturers, and look at them now. Hyundai was a brand that was fairly reliable, but was ridiculed in popular media. Now it's on par with Japanese brands and often considered premium. Also, Samsung went from making parts for everything to developing and marketing their own premium products. Chinese manufacturers can easily follow this same path and I think it is already happening.
The camera industry is a familiar example— both Canon & Nikon began by making copies of German Leica and Contax cameras, then tweaked them, then moved into innovative original designs. By the 70s or 80s, Canon and Nikon had surmounted their industry, while Contax was bought by a Japanese bit player and Leica was reduced to a niche luxury manufacturer.
http://www.canon.com/camera-museum/history/canon_story/1946_...http://www.kenrockwell.com/nikon/rangefinder/sp.htm
And yet, Japanese and Korean engineers still have problems with creativity relative to their western counterparts. A lot of that has to do with a hierarchical Confucian culture. Sure, they've mastered quality and efficiency, but some areas need more than that, namely software.
Except Korea and Japan aren't autocracies. They're just so much more flexible by having an open democratic process and open markets. The CCP is its own roadblock in China. Sure it can make special economic zones and play command economy with construction and development (lets ignore the ghost towns they have built for now), but that approach is self-limiting.
China won't liberalize the way Korea and Japan did after the war. They're very much in bed with complete political, economic, and cultural control. That means worse outcomes from a capitalist point of view. They can only manufacture US widgets and steal blueprints for so long. They really don't have a capitalist and innovators culture. Usually that's a temporary problem in western-style governments, but in an autocracy its fatal. Look at Putin's terrible oil-based economy. Autocrats can't play the open liberalization game because autocracy is naturally very, very conservative and controlling. Part of this game, if not the most important part, is giving up quite a bit political control and performing regulatory actions that hurt the top players like fighting corruption, preserving competition, protecting IP and property rights, helping labor movements go forward, and cleaning up the environment. Autocracies dont often do these things. If they did, they would probably cease to be autocracies.
> They really don't have a capitalist and innovators culture.
Have you ever read any of Bunnie's many articles about shanzhai? Sure, the big corps in China are state-controlled monoliths, but the grassroots level is seething with innovation and way more capitalist in a "red in tooth and claw" sense, unconstrained by silly Western ideas about intellectual property, health & safety, etc.
