Can China's billions spur the next big idea?

The strategy is the brainchild of He Simo, an amiable former soldier who started the company in 1989 with just 3000 yuan ($470) in capital, and once resorted to selling his own blood and bicycle to make ends meet.

Through imitation, tinkering and steady improvement, Guangdong East Power is now one of China's leading producers of power supply systems and increasingly a competitor for the global market leaders, Schneider Electric's APC and Emerson.

"The company I most admire is Apple," said He, sitting in an office off of the factory's humming production line. "God's hand sometimes gives them an idea and they come up with a completely new product. I don't think we are anywhere near that stage yet. But I always say a product is never perfect -- it can always be improved."

Innovation is an obsession for China's central planners, who have showered billions on state-owned businesses and research institutes in an effort to make the country a creator of -- rather than a mere user and copier of -- intellectual property.

It's an effort that has had western multinationals up in arms, fearful that the policies favor local companies and force foreign companies to transfer their best technologies to China.

The government is seeking major breakthroughs - scientific discoveries and new technologies that will set the standard for companies around the world. The effort hasn't been a success.

"You can't really point to an individual firm or area where the Chinese are currently leading," said Adam Segal, a senior fellow with the Council on Foreign Relations, and author of a book on innovation in Asia.

"Some people point to nanotechnology and some say nuclear. Otherwise, it's hard to figure out if there's going to be any breakthrough in China. I just don't see it on the horizon."

But seen another way, innovation is thriving in China. Thousands of companies in China's lively and unruly private sector have built money-making businesses on their ability to take existing technology and products and make them better and cheaper.