China's Race to Innovate in Critical Technologies: What Can Europe Learn?

This policy brief examines China's rapid ascent in frontier innovation across artificial intelligence (AI), semiconductors, and quantum computing, drawing on our recent analysis of patent breakthroughs in these critical technologies in China, the European Union (EU) and the United States (US). The findings reveal a competitive landscape where the US maintains overall leadership, China excels in targeted subfields with remarkable speed, and the EU lags significantly in patent breakthroughs and knowledge diffusion. China's strengths stem from a hybrid innovation ecosystem blending public and private actors, enabling quick replication of global novelties despite external restrictions. In contrast, Europe's fragmented markets and reliance on public research hinder scale and commercialization. To bridge this gap, Europe must not only increase research and development in critical technologies but also further integrate its national innovation ecosystems .
In this policy brief, we review how China fares, compared to the US and the EU, in terms of breakthroughs in critical technologies, how fast the replication of such breakthroughs is across geographies and who are the main actors behind this innovation. Our findings, based on recent research by Garcia Herrero et al. (2025) confirm that the US still dominates in AI and, especially quantum, while China is moving fast in all, especially in semiconductors where the US dominance is waning.