As European leaders call for U.S. President Donald Trump to work with America’s allies and avoid potentially damaging trade wars with China, a global ranking shows the Asian superpower is steadily climbing toward world leadership in innovation while the U.S. is slipping.

China is now among the top 20 most innovative countries in the world per the Global Innovation Index, or GII -- a ranking produced by INSEAD, the World Intellectual Property Organization and the Cornell SC Johnson College of Business. The ranking placed China at No. 17, up five positions from 2017, and marking the first time that the Asian country finished in the GII’s top 20. The U.S. was ranked sixth, down two positions from last year, while Switzerland topped the GII ranking for the eighth year in a row.

The GII is based on international patent filings and scientific publishing activity. China is also the only upper-middle-income country in a ranking dominated by high-income European countries.

China came in at No. 29 when the index debuted in 2007. In recent years, however, large tech companies in the country have invested heavily and , as the global management firm McKinsey notes, extended their international reach. China’s investments notably extend into artificial intelligence, where expenditures are accompanied by ambitions to shape global standards.

According to this year’s GII report, China was the main driver for a record increase in intellectual property filings in 2016. The country also has been a leading investor in autonomous vehicles, education technology, virtual reality, robotics, advanced manufacturing, artificial intelligence, and machine learning, according to another global innovation report by the Atlantic Council, a Washington D.C.-based think tank focusing on international affairs. The country accounts for 42 percent of the global e-commerce market and boasts about being home to one-third of the world’s startup companies valued at $1 billion or more.

"China’s innovation prowess becomes evident in various areas," wrote the authors of this year’s GII report. "It shows some of its greatest improvements in global R&D (research and development) companies, high-tech imports, the quality of its publications, and tertiary enrollment. In absolute values, and in areas such as R&D expenditures and the number of researchers, patents, and publications, China is now 1st or 2nd in the world, with volumes that overshadow most high-income economies."

In the meantime, the United States has lost its standing as being a global leader in innovation, according to the GII. In slightly more than a decade, America went from holding the No. 1 spot in 2007 to its current No. 6 spot, surpassed by countries such as Switzerland, the Netherlands, Sweden, the U.K. and Singapore.

Eleven years ago, the U.S. eclipsed the second-most innovative nation in the GII ranking by about 1 point and was considered in a " league of its own as far as global innovation is concerned." Today, America is often criticized for not having coherent national strategies for technology sectors such as artificial intelligence, and for allowing countries such as China to rob it of intellectual property.

"Its position deteriorates in both the innovation input and output sides, driven by declines in human capital and research, infrastructure, and creative outputs," the GII report said.

U.S. leaders have for years complained that China is hurting American tech companies by stealing or pressuring firms to hand over technology in exchange for gaining access to markets in the world’s most populous country and a nation that, as the World Bank notes, has recorded the fastest sustained economic growth by a major country in history.

In early July , the U.S. imposed 25 percent tariff s on $34 billion of Chinese goods, a move that provoked Beijing to levy tariffs on the same value of American-made goods. In response, the White House proposed 10 percent tariffs on $200 billion worth of Chinese products, a threat that spurred Beijing to file a complaint with the World Trade Organization.

Germany, considered one of the most technologically advanced European nations, ranked ninth in the GII, while Japan was surpassed by fellow Asian countries Singapore and South Korea, which were ranked fifth and 13th, respectively. All three Asian countries are seen as one of the world’s most forward-looking countries, according to one global survey.

Out of the top 20 in the GII, 11 countries are from Europe, two are from North America, six are from Asia and Oceania, and one, Israel, is from the Middle East. Hong Kong, an autonomous territory belonging to China, was ranked No. 14.

Sintia Radu covers international affairs and technology for U.S. News & World Report. You can follow her on Twitter @sintiaradu and send her suggestions and ideas at sradu@usnews.com.


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