Innovation creates new momentum in economic growth, enhancing the competitiveness of an enterprise and a country. China is emerging as a leader in innovation within the East Asian region, where superiority in the number and coverage of patents, particularly due to the notable advancements of the private economic sector fueled by the rise of digital technology. Vietnam is heavily dominated by small and medium-sized enterprises and thus suffers from the lack of economies of scale in R&D, and innovation works. The article discusses the economic factors that encourage innovation and summarizes China’s strategic planning and policies for fostering innovation within the private sector, offering recommendations for Vietnam.