Expert says trade war may pose some challenges to knowledge flow

China's capability to innovate won't be affected by a trade war with the United States, though such a war would pose a challenge to the international flow of knowledge, experts said.

China broke into the world's top 20 most innovative economies in the 2018 Global Innovation Index, which was released on Tuesday in New York, and is the only middle-income economy on the list.

The index, released by the World Intellectual Property Organization, is an annual ranking of the ability of global economies to innovate.

China moved to 17th in the ranking from 22nd last year, setting an example for middle-income economies, the report said.

Francis Gurry, the organization's director general, praised the "extremely careful strategy" of China's top leadership for "encouraging innovation and ensuring that the country becomes an innovation-based economy".

He noted that China's consistent rise in the rankings is a predictable trend.

Switzerland remained at the top of the list for the 8th year. The Netherlands, Sweden, Britain, Singapore, the United States, Finland, Denmark, Germany and Ireland round out the top 10.

The index ranks 126 economies based on 80 indicators, including science and technology investment and the number of patents filed.

China's ranking was 35 in 2013 but has moved up steadily.

Sacha Wunsch-Vincent, the senior economic officer of the organization, who led the preparation of this year's report, said he is optimistic that global innovation and growth are possible. But he said recent global complications, such as the trade war, may increasingly challenge international knowledge flow.

China won't be affected by that, said Chen Dongmin, professor at Peking University's School of Innovation and Entrepreneurship.

To further climb the list, Chen said, it is essential to improve and inspire the innovative capability of State-owned enterprises and enhance their ability to successfully turn scientific and technology patents into products.

In the past, foreign investment in China has contributed to the country's GDP but has played a limited role in improving its innovative capacity, Chen said.

The rankings show that China has now entered the pool of most-innovative countries, fulfilling the goal ahead the central government's 2020 target, he said. Chen reckoned the leap is the result of the Chinese government's policy to encourage innovation.

Chen Hongbing, head of the organization's China office, said China has to keep an open mind to further improve innovation.

"China has attracted a large number of foreign investors, and they bring innovation in management - the know-how. The experience will help China grow in innovation," he said, adding that an open attitude "is what the Chinese government is encouraging right now, such as insisting on globalization".