For decades, the dominant idea was that governments should “get out of the way” of innovation. Beijing has proven the opposite. In the past 20 years, it has built an innovation machine by doing exactly what textbooks told it not to: intervening, funding, and directing.The model is visible in two places. Zhongguancun, also known as “China’s Silicon Valley,” connects Peking and Tsinghua universities with start-ups. Yizhuang is a state-built hub for robotics and AI. The formula is universities producing talent and IP, whereas the state provides capital and infrastructure and industry scales it.
The results are hard to ignore. Beijing’s tech transfer platform executed 1.04 lakh contracts in 2025. Companies like Lingyi iTech are planning 20,000 humanoid robots annually by 2027. These are not lab projects. They are on factory floors.
What makes Beijing different is its willingness to bridge the “valley of death” — that gap between research and commercial product where most start-ups die. The state provides patient capital. It builds science parks. It coordinates supply chains.
Although, there remains a cost. State-led investment can lead to waste and political favouritism. Recognizing this, Beijing has now issued new rules to tighten oversight of state funds. There is also cutthroat competition between provinces, leading to subsidy wars.
For India, the lesson is not to mimic China. Our democracy, our federal structure, our private sector are dissimilar however we can adapt the principle: the state as a bridge, not a barrier. India has IITs, IISc, ISRO and a booming start-up ecosystem. What we lack is coordination. Our research, funding, and manufacturing are in separate silos. A researcher in IIT Madras and a manufacturer in Pune may never meet.
India needs its own “Zhongguancun” or perhaps in Bengaluru or Hyderabad where the state, academia and industry sit in the same room with a 10-year horizon. With transparency, not cronyism.
If we want to lead in AI, semiconductors and green tech, we cannot rely on market forces alone. Beijing has shown state support can work. Now India must show democratic state support can work better.