CHINA: Innovation and research to boost economy

Innovation and research must be at the forefront of China's national economic plan for the next five years if the country's desire to move away from pursuing rapid economic growth at all costs to a more broad-based economy is to succeed, Prime Minister Wen Jiabao said last week.

"China must rely on scientific innovation and an improvement in labour quality to enhance the quality and efficiency of [economic] growth," he said. In doing so he put universities at the centre stage of a more sustainable economic path.

Wen was speaking at the closing on 14 March of the annual meeting of China's National People's Congress, which approves policy proposals made by the party leadership. The NPC agreed that research and development (R&D) spending in the next five years should rise to a targeted 2.2% of gross domestic product compared to around 1.6% now.

China's rise should not always be viewed in terms of gross domestic product, he added. China has been among the fastest growing economies in Asia.

More important, he told the congress, were indicators such as education funding as a proportion of GDP and the share of funds for R&D. Education and R&D were "the most powerful, most sustainable and most reliable factors" that will underpin innovation in China, he stressed.

Last year China's science spending increased 14% on the year before. According to the country's Innovation 2020 blueprint, R&D is predicted to contribute 60% of the nation's economic development by 2020 with R&D investment rising to 2.5% of GDP by 2020.

The US spends 2.8% of GDP on R&D while in Japan it is 3.4%.

However, China has failed to reach the targets for education enrolment and R&D spending in the previous five years. Experts said the push for innovation was more important than the target figures and represented a change in direction by the Chinese leadership to move away from manufacturing-led growth.

On 6 March President Hu Jintao said China must rely on scientific and technological innovation to "seize the initiative" in increasingly intense international economic competition. "China needs to greatly improve the quality of education and create a favourable environment for fostering talents in various industries," Hu said.

During a visit to Beijing's Tsinghua University just before the 10-day congress began, the chair of the NPC's Standing Committee Wu Bangguo said: "First-class universities should be an important source for fundamental research and innovation in the field of advanced technologies, an important force for innovation in theory and culture, an important platform for pooling innovative talents and a base for training them."

China's Innovation 2020 blueprint, released last year, emphasises translating research into technologies that can power economic growth and address pressing national needs such as clean energy, said Bai Chunli, Vice-president of the Chinese Academy of Sciences, at the academy's annual conference in Beijing in February.

New research centres for space science, clean coal technologies and geo-science monitoring devices will be set up. And major science parks linked to university hubs in Beijing, Shanghai and Guangdong province have been planned to translate basic research into marketable products, especially in renewable energy, information technology and biomedicine.

At present, China still only ranks 21st in terms of innovative abilities among the world's 40 most innovative countries, according to a report released last month by the Chinese Academy of Science and Technology for Development, CASTED.

The report for the first time provided an assessment of China's innovative capacity. The country scored only 57.9 points on innovative capacity, compared to the US with 100 points ranking first in the report, followed by Switzerland, South Korea and Japan.

"Although China has a scale advantage in innovation resource and knowledge creation, it still has a big gap in innovation efficiency, intensity and quality compared to developed countries," CASTED Executive Vice-president Wang Yuan said.

Using data from the World Bank, America's National Science Foundation and China's National Bureau of Statistics, the report said China had the largest number of researchers, and was top for the export of high-technology products.

But it ranked fourth for total R&D investment - significantly below some more optimistic analyses by the OECD and other organisations, which put China second behind the US.

Among the five major indices used in the report, China's innovation resource and knowledge creation both ranked 33rd in spite of climbing five and six places, respectively, from the 2000 rankings. Innovation performance jumped 23 places from the 2000 rankings to ninth. However, China ranked only 23rd for innovation environment.

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