China National Systems of Innovation

Course: Technology and innovation management

By Dominique JOLLY 2008/2009

LAM HEI MAN Maggie

ROZAND Emilie

ZEIDAN Réda

General Informations

Establishment: People’s Republic of China (1st october 1949) Capital: Beijing Government: Single-party state, Socialist Republic President: HU JINTAO Area: 9,640,821 Km² Population (2007): 1,321,851,888 Density (2007): 140/ Km² GDP (2007): 11,3% 4th world economic power DHI (2005): 0,777 ( 81st) PRC is the world’s second largest Exporter and third largest importer

History « Opening as a foundation of chinese strategy »

1978 Deng Xiao Ping introduces « Open Door Policy » (success in India and Japan) introduction of market-based economic reforms 1986 Opening of negotiations between China and WTO 2001 China’s accession to the WTO Since 1995: 600 billion US$ FDI entered in China (10 time more than in India) 2006: 63 billion US$ FDI enter in China Trades between 1995 and 2001 moved up from 281 to 550 billion US$ 2006 trades rised up to 1700 billion US$ In 20 years China went from 1% to 6,5% of the total amount of world exchanges

1980’s:- Establishment of Economic Zones to attract FDI - Restructuring of state-owned companies- Joint Ventures are the dominant partern for foreign business in China ( Alcatel,

Schneider Electric…)- Growth rate at two digits (1978: US$ 45 billion, 2002: 1 trillion US$)

China GPD from 1952 TO 2005

R&D Expenditures 2006: China becomes the 2nd world investor in R&D with 136 Billion

US$ (130 for Japon, 330 for USA and 230 for EU). China’s spending on R&D remains heavily focused on experimental

development; only 5.2% of all R&D in 2006 was aimed at basic research, compared to 10-20% in OECD countries .

.

R&D Expenditures

0

24

6

8

1012

14

1618

2003 2004 2005

Uni versi t i es

Nat i onal ResearchcentersEnterpr i ses

By sector of perf ormance

22%

67%

10% 1% Researchi nst i t utesEnterpr i ses

Uni versi t i es

Others

By source of f unds

27%

66%

1% 6%

GovernmentEnterpr i sesAbroadOthers

GERD* by source of funds and sector of performance (2004) / GERD: Gross Expenditure on R&D

R&D expenditure in % of GDP R&D expenditure in % of GDP in 2003in 2003

Source: OECD, Main Science & Technology Indicators, Volume 2002/2,Hong Kong Digest of Statistic,March 2003

GNP Ratio Evolving The R&D intensity – the ratio of GERD to gross domestic product (GDP) –

of China’s economy has increased spectacularly. It reached 1.43% of GDP in 2006, up from 0.6% in 1995.

The main goal of China is to reach 2% in 2010 and 2.5% in 2020.

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

GNP Ratio Evolving from 1995 / 2005 R&D expenditures / GDP

0,000,501,001,502,002,503,003,504,004,50

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Technology in China/ R&D centers

In 2006, high R&D intensity remained heavily concentrated in some regions, especially in Beijing, Shanghai, Shaanxi, and Sichuan.

Most dynamic innovating center are located along the East coast meanwhile the presence of R&D in the center and the West are rare

The inland provinces such as Yunnan and Guizhou where the GDP/ per capita are below average, the spending on R&D respectively correspond to 0,7% and 0,5% of the total nationwide.

Beijing’s GDP/ per capita is above 2500 US$, their part are > 16% High-tech clusters: Zhongguancun (Beijing), Zhangjiang (Shanghai), Suzhou

High-tech park, … Foreign companies develop R&D centers in China: Astra Zeneca, Roche,

Servier, Nokia, Intel, IBM, Alcatel, Delphi, Danone, … China is the moste attractive country for resarch centers (700 in 2005) The 863 and 973 programs, support by chinese government

National Key Technologies R&D Program Presentation

the first national S&T program in China It aims to address major S&T issues in national economic construction and social

development Initiated in 1982 and implemented through 4 Five-year Plans, the Program has made

remarkable contributions to the technical renovation and upgrading of traditional industries and the formation of new industries

Major tasks to promote in-depth agro-product processing by developing a number of key

technologies and products for sustainable agricultural development

With the manufacturing industry as a gateway to new innovations, redouble efforts to develop common key technologies for basic and pillar industries

With informatization process in the financial sector as a priority, accelerate the development of IT and other high technologies

With environmental protection and rational utilization of resources as priorities, develop key technologies in urban environmental pollution control

With the modernization of traditional Chinese medicine (TCM) as a gateway to innovation, develop key technologies in the TCM industry to secure its world-leading position

With promotion of the social cause as a goal, intensify research on major public welfare technologies and develop advanced and applicable technologies and products to further enhance the living standards of the Chinese people

National High-Tech R&D program (863) Presentation

Developed in 1986 by four chinese scientists: WANG Dahen, WANG Ganchang, YANG Jiachi and CHEN Fangyun

Aproved by DENG Xiaoping personally Implemented during three successive Five-year Plans

Orientation & Objectives To boost innovation capacity in the High-Tech sectors to strive to achieve breakthroughs in key technical fields that concern the

national economic lifeline and national security to achieve “leap-frog” development in key high-tech fields in which China

enjoys relative advantages

Major tasks Develop key technologies for the construction of China’s information

infrastructure Develop key biological, agricultural and pharmaceutical technologies to

improve the welfare of the Chinese people Master key new materials and advanced manufacturing technologies to

boost industrial competitiveness Achieve breakthroughs in key technologies for environmental protection,

resources and energy development to serve the sustainable development of our society

Scientific potential (1)

In China, the number of researchers raisefd by 77% between 1995 and 2004. With 926 000 researchers, the country is now ranked second in the world, just behind the USA ( more than 1,3 million).

The worlwide part taken by China in scientific publication has raised by 88% in 10 years between 1998 and 2007 ( from 2.5% to 4,5%)

1985-2004 the number of scientific and technological personnel had increased from 8.70% to 39%

Since 25 years about 400 000 to 500 000 chinese have gone studying, working or living China in the past 25 years. 150 000 come back to china (Government )

2004: 55.75 million scientific and technological personnel in state-owned companies and institutions, in which over half are scholars returned after their studies abroad

53 hi-tech development zones, more than 30 000 hi-tech enterprises

Scientific potential (2)

Science and technology 1964: 1st nuclear test / China is a nuclear nation 1970: of Dong Fang Hong I, the first Chinese satellite 2003: Human being into space: Shenzhou 5 2005: The country plans to build a Chinese Space Station in the near future

and achieve a lunar landing in the next decade. China is als actively developing its software, semiconductor and energy

industries, including renewable energies such as hydro, wind and solar power.

China has been pioneering the deployment of pebble bed nuclear

reactors. Wind turbines in Xinjiang (Picture). The Dabancheng project is Asia's largest

wind farm.

Universities Play a Key role in innovation Universities in China are at the origin of 1 of 5 patents They are representing 1/10 of the scientific and technologic companies In 2006, chinese universities were accomodating around 18 millions

students ( more than 200 000 doctorants and almost 900 000 masters) Corresponding to 1.8% of the total population More than 1000 Universities in China Number of students for 100 000/ inhabitants: 1 494 ( USA 5776; France

3600)

Renmin University of China Shandong University, China

Stake-holders

Private techno creators: 2,8000 Large and medium

sized enterprises: R&D / Turnover = 1.69% only

National champion firms: Huawei, Haire,

Lenovo, Haison, Bell, ZTE-Concentrated on information, electricity and communication

More than 1050 Universities

+ 53 National Hi-Tech Industrial Parks

10 National Research Centers + 56 Engineering

Research Centers

Public Research Organizations: China Academy of Science

+ 155 National key laboratories

CIS

Patent activity: Only 0.03% enterprises have core technology patents and mainly in the domains of Chinese Medicine, Soft drink, Food, Chinese character input system

Chinese innovation’s policy Creation of technologic parks (scientific incubators, technologic zones…)- 83 in China- 58 universitary scientific parks Global plan elaborated from Beijing Support from the government to promissing companies- Direct financing- Credit on taxes- Opening over public markets Decisions at the national level PME receive support in nature- Allowing access in import export Support to the creation of industrial clusters- Creation of innovation centers

The part taken by China in the world total exportations between the early 1990’s and

2005, of high technology goods has moved up from 5% to 30%. Important transfers of knowledge and technology as part of lucrative contracts of

foreign investments. China 1st exportator of TIC goods (Radio, TV…). Historical inventions : Compass, gunpowder, papermaking, and printing, Pythagorean

Thearem. Traditional Chinese Medicine: Herbal Medicine, acupuncture, and massage.

Technology and knowledge-intensive industries

Share of total gross value added, average 2000-02

Patent activity

Some lecture dates in 2007 (1) Challenge Bibendum 2007 (14-17 November 2007, Shanghai) is a

yearly scientific and technical event, kown as the premier clean and safe vehicle event in the world, where industry, policymakers, researchers and media can review the latest technologies, debate policies and share their visions. Bad integration of imported innovation

August 21 – September 3, 2007, Royal Flemish Academy of Belgium for Science and the Arts, Palace of Academies, Rue Ducal 1, Brussels, Belgium The ASEM Aquaculture Platform is a multi-stakeholder platform for dialogue, networking and continued coordination concerning sustainable aquaculture between EU and Asia

Some lecture dates in 2007 (2) June 27-28, 2007, Italian National Institute of Health (ISS), Viale Regina

Elena 299, Rome, Italy SINO-EUROPEAN CONFERENCE ON TRADITIONAL CHINESE MEDICINE (TCM): International Cooperation and Perspective in Science and Technology

April 25-27, 2007, CIMNE, Barcelona, Spain Modelling, Simulation, Experimentation and Design in Aerospace Engineering To identify and implement future collaboration between Europe and China for the solution of multidisciplinary design problems in aeronautics

Conclusion Strength The Chinese government continues to place heavy emphasis on research

and development by creating greater public awareness of innovation, and reforming financial and tax systems to promote growth in cutting-edge industries.

President Hu Jintao in January 2006 called for China to make the transition from a manufacturing-based economy to an innovation-based one, and this year's National People's Congress has approved large increases in research funding.

Chinese innovations are emerging and it’s a key factor of success for the country and for the others technological actors in the world.

Like its economic development, China boosts technology and science very fast, thanks to huge financing and high-skilled workers.

Conclusion: Weakness The question/issue of sustainable growth and human development Getting public policy more accessible to boost company’s

investment Chinese Trade exportations are mainly focused on manufacturing

product Hierarchical and bureaucratic system could involve weakness in the

Chinese economic model (soviet heritage?) Leading role of universities in terms of innovation (Snall number) Lack of experimented labor susceptible to develop technologies and

patents. Lack of coordination between innovation key centers (such as

PEKIN, Shanghai) in terms of state financing. Relatively tight control from the top to bottom Geographical area (disparity..)

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