According to a report from the Wall Street Journal, "increasingly, China's own technology companies are challenging market leaders and setting trends in telecommunications, mobile devices and online services".
Keeping better-known global competitors at bay in their massive home market, they are hiring Silicon Valley executives and expanding overseas with aggressive marketing campaigns featuring international sports stars and celebrities.
Chinese companies still face a perception problem among consumers in many parts of the world that their products aren't as high-quality or reliable as others. Some foreign competitors have alleged that Beijing gives unfair advantages through subsidies, cheap financing and control over the currency market.
But, many executives at Chinese and Western companies contend, China's technology sector is reaching a critical mass of expertise, talent and financial firepower that could realign the power structure of the global technology industry in the years ahead.
"Traditionally Chinese companies were fast followers, but we are starting to see true innovation," said Colin Light, partner at PricewaterhouseCoopers.
The rise of China's tech industry is fueled in part by its growing investment in research and development. According to a study released in December by U.S.-based Battelle Memorial Institute, R&D spending in China will likely reach $284 billion this year, up 22% from 2012. That compares with just 4% growth forecast in the U.S. to $465 billion for the same period. It forecasts China will surpass Europe in terms of R&D spending by 2018 and exceed the U.S. in 2,020.
At Shenzhen-based Huawei Technologies Co., the world's second-largest telecommunications-equipment supplier by revenue after Sweden's Ericsson, annual R&D expenditures rose fourteenfold in a decade to $5.46 billion in 2013 from $389 million in 2003.
When Peter Zhou joined Huawei straight out of graduate school in 2000, the company's Shanghai research center had a few hundred workers in a shared office. Every Wednesday night after work, Mr. Zhou and other young Chinese engineers gathered for study sessions, sometimes using university textbooks from the U.S.
But in the past decade, Huawei overtook Western rivals such as NokiaCorp. and Alcatel-Lucent SA in the telecom-gear market. Part of its success stemmed from Huawei engineers' creative ways to upgrade wireless networks using software instead of a costly method of replacing all hardware components, according to Mr. Zhou.
Huawei now has an R&D center in Shanghai that employs more than 10,000 engineers, many of whom have computer-science degrees. As the mobile industry deploys faster fourth-generation networks, Huawei is already working on the technology for fifth-generation networks, which could be ready around 2020.
China is also moving up the technological curve in sophisticated areas like mobile processor chips, where it used to be absent.
China's Fuzhou Rockchip Electronics Co. and Allwinner Technology Co. are increasing their presence in the fast growing market for chips used in the low-end smartphones and tablets.
