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ECONOMY

Moving Forward: China’s Plan to Innovation

One of China’s key objectives is to transit the economy from “Made in China” to “Created in China” . As costs increase and the Yuan strengthens, moving up the value chain will be of utmost importance in balancing the export-driven economy and securing China’s global competitiveness.
Progress is already visible: R&D spending and patent applications have risen significantly (although some critics attribute much of the latter to “junk” patents). China has already created the seeds of 22 Silicon Valley-like innovation hubs within the life sciences and biotech industries. One of the most impressive of these lies in Zhongguancun in northwestern Beijing – an innovative hotspot populated with countless research centers, tech super-companies, and start-ups.
Leadership has set clear, but challenging targets, which may prove difficult to achieve: to spend 2.5% of China’s GDP on R&D by 2020; to be among the top five countries with regard to number of inventions patented; and to have Chinese-authored scientific papers among the world’s most cited. In contrast to the market based innovation approach of other countries, where R&D is encouraged by taxation benefits and the market determines the winning technology options, the Chinese government has taken an active role in allocating funding to specific industrial segments and technologies. It has implemented a range of policies to enhance innovation,…