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Those "matches" were of the self-igniting and disease causing kind, right? Safety matches were indeed invented in Sweden, in 1855.|
So if you get my point here, it doesn't matter who invented what really; the principle to follow is that safety matches were exported all over the world, creating surplus export money for the people of the country of origin. How many matches did China export?
Iraq "invented" the wheel (together with numeorus other civilizations), but what would you say about Iraq's development after the wheel and possibly some other early discoveries? Where is the principal and methodical development?
The Sumerians "invented" the alphabet, which was exported all the way to Europe, where it was modified to contain wovels by the Greeks, and later modified by Greeks in Rome to basically the shape we know them today (much like Qin Shihuang standardized Chinese Charatcers about the same time). Where are the Sumerians today? You can't dwell on past glories; they don't really count, at least not more than at some basic level of historic pride.
So, to your basic question: can China invent? Of course it can. China can be whatever it want to be and do whatever it want to do, but it can't be achieved anyway China wants it to be achieved. There are certain processes for this. You can't just leapfrog past the leading nations in 10-15 years, like a previous leader dreamed of.
Above all, if China invented the gun powder 1000 years ago is of no relevance to this issue.
Let's take another example: The Arab world was at its height in the 800s. They took Chinese and Indian mathematics and refined it, before Europe woke up from its middle ages and began the Renaissance and later the Age of Enlightenment, leading to the scientific revolution and later the industrial revolution and later the information revolution. Where are the Arabs today? You could claim that they have been subdued by Western imperialism, but the truth is that their decline started long before that, when religion became ubiquitous, when free speech was impeded, and when the respect for learning, truth and facts was annihilated. That is what kept the Arabs from keeping developing, and the same is what would impede any nation or culture from developing.
I believe China is taking many right steps toward this goal of achieveing world class scientific status, with tons of innovations coming as a result. But it has nothing to do with the compass being invented in China. Remember Zheng He? He was a magnificent admiral, but not a trader. He cause the empire losses, and the empire didn't understand the implications of trade (the shang class being the most despicable among the four classes in China), so they closed the door. The compass was never properly put to use in the time when Europe set sail to discover the world. China created the empire's own demise, despite having the compass, the gun powder and other innovations.