"China has taken a radically different approach to public and private investment. First, it treats public investment in research and technical education as an instrument of national economic and security strategy. It has been steadily increasing this investment and focusing much of it on critical technologies such as quantum computing, robotics, and genetic engineering. China completely rejects the American model of high corporate hurdle rates. In the Chinese view, the purpose of capital is to not to ensure high rates of return on individual investments, or maximize value to individual shareholders, but to maximize the total volume of investment—because that maximizes the pace of industrial advance. To maximize the volume of investment, capital should be cheap or free, or even provided by the government. Chinese provincial and local governments regularly give favored investors free land, low-cost loans that may not have to be paid back if the business fails, and favorable treatment in government procurements. They are aggressively subsidizing corporate investment."
Source: Disruptive Innovation in America and China - American Affairs Journal
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