Asia is slowing down. Growth will struggle to top 4 percent in 2022, with China growing at under 3 percent. Given that China has been the most powerful locomotive of Asian growth in recent decades, the implications of this are highly significant, not least for the world economy. Most explanations for the slowdown have focused on short-run pressures from China’s zero-Covid policy and the unfolding fall in real estate values. The implications for financial and government institutions’ balance sheets are potentially serious. Whether the policy response is to try to stabilize the situation by raising debt further while continuing along the high investment, low consumption path is yet to be seen. Some have even suggested that China runs the risk of being the next Japan. Lurking not so far beneath these challenges lies an even more fundamental question: Can China become a successful location for broad-based innovation? That challenge is not particular to China; the rest of emerging