This paper addresses some of the challenges confronting the EU and China as they build their knowledge economies. We argue that there is an urgent need to develop a new outward-looking Lisbon strategy, preparing the EU for globalization. The strategy would focus on: international trade in services, internationalization of research networking, and access to brains and talent. The success of the Chinese economy over the past three decades can be partly attributed to its ability to absorb globally advanced technology and huge flows of foreign investment, and its policy of providing incentives to domestic and foreign firms to innovate, a strategy very reminiscent of Europe's Lisbon agenda. To move further, China needs to overcome the obstacles of regional disparities, transform its industry and deepen industry-academy linkages. These are the very areas where Europe is making efforts to achieve sustainable development. Copyright , Beech Tree Publishing.
