China is transforming itself into the workshop of the world, building an export-oriented national production system linked by global value chains to the world's leading economies. But to what extent is it laying the foundations for moving from imitation to innovation? In this first study of China's national innovative capacity, we extend earlier work conducted on the East Asian Tiger economies, and bring it up to the year 2005. We demonstrate a surge in patenting activity by Chinese firms and organizations since 2001, and analyze the drivers behind this, as well as the quality characteristics of the patenting - in terms of intensity, impact and links with the science base. We have some striking findings to report, including the strong role played by universities in the building of China's national innovative capacity over the last 15 years, and the puzzling apparent lack of contribution of the public sector in reinforcing China's national innovative capacity. On the latter point we suggest that the role of public sector institutions has been mixed, and only exerts its effects after reforms streamlined the system and brought many of the institutions into the private sector.