Rapidly “digitizing” consumers, a new generation of entrepreneurs and increasingly open capital markets are driving China’s transformation into an innovation economy, according to Goldman Sachs President and co-COO Harvey Schwartz.

“China, in some respects, is leapfrogging the rest of the world as [consumers] adopt technology and all the tools that are available to them,” Schwartz said in a video published by Goldman Sachs on Tuesday. He added that a new wave of entrepreneurs is shaking up the global tech landscape, with one in three “unicorns” (private companies valued at over $1 billion) now coming from China.

Schwartz also noted that China’s emphasis on its reform agenda and continued opening of its capital markets will be critical to growing the country’s $10 trillion economy. “There are going to be challenges,” he says, but “when you talk to people on the ground in China, they’re very thoughtful about the considerations and they understand the complexity.”

They also understand, according to Schwartz, that they will have to continue their reform agenda, but he says “this transformation in this next phase where they grow the private sector and do things like open their capital markets – it’s just extraordinary. And what you feel, really, is it’s the pace of change.”