There is much cynicism about China's innovation typified by the "shanzai" sneer. There is a great deal of adaptation and imitation. Many Chinese products, albeit of high quality, won't survive the intellectgual licensing fees if sold abroad.

However, China's market is huge and only starting to expand. China's is churning out some 7 million university graduates year after year. More local talents are coming on stream. Moreover, the country is putting innovation first in an about-turn of its economy. With foreign collaboration, there is plenty of scope for product development which can be extremely competitive in global markets. The McKinsey Quarterly analysis may offer some fresh ideas.

Download McKinsey Quarterly – A CEO's innovation guide to China – February 2012