For a long time, China has been firmly associated with the” world factory”, which cheaply and massively” stamped ” a variety of products according to other people’s patterns and projects. However, now this stereotype no longer fully reflects reality. Currently, China is a world leader not only in finance, industrial production, but also in the sector of scientific research and innovation.

For several decades China has consistently and systematically increased the resources for innovative development, improves conditions for high-tech business, increases investment in hi-tech, already ahead of the innovation competitiveness of many G-20 countries, due to the following factors:
First, the creation of innovative economy became part of the national ideology and the basis of the strategy of economic development of the PRC.

The CPC aims to create an innovative state by 2020. The official documents note that there are two more stages in the transition to a new innovative model of economic development:

  • until 2020, modernization of science and technology, achieving the level of medium-developed countries;

  • in 2021-2050, comprehensive modernization, joining the ranks of developed countries.

By 2020, it is planned to increase the share of spending on science from 1.34% to 2.5% of GDP, the share of the contribution of technological development to GDP to 60%, reduce dependence on foreign technologies to 30% (today it is about 50%).

And these plans are generally being successfully implemented. China is already in second place in the world in terms of R & D costs (the United States is in first place with $ 465 billion in 2014), overtaking Japan ($165 billion) and Germany ($92 billion). The share of financial investments in innovations in China increased from 0.5% of GDP in 1996 to 2% in 2014 and amounted to $ 284 billion.

In 2015 Beijing can increase this figure to 2.2% of GDP (up to $ 320 billion). In the period from 2008-2014, the average growth in R & D expenditures in China was 29.1%.

Forecasts of R & D financing in the USA, China and the EU

Secondly, for 20 years, the PRC has created an infrastructure that promotes the development of innovative business and the growth of scientific power through the rapid transfer of knowledge and exchange of information.

Thanks to this, since 2012, China has taken the first place in exports and the second place (after the United States) in the volume of production of high-tech products in the world. According to the World Bank, in the period 2003-2014, the share of China in the total global volume of high-tech products produced tripled (from 8% to 24%). And the export of high-tech products from China increased 12-fold from $ 41.7 billion in 2000 to $ 505.6 billion in 2014 (for example, in Germany – $ 183.3 billion in 2014).

Today, there are 114 zones of new and high technologies on the territory of the People’s Republic of China, which include 549 universities, 1,738 research institutes, 447 laboratories, 547 industrial technical institutes, 226 state centers for engineering research and development, 243 centers for engineering and technical research. In addition, 8 of China’s largest high-tech TNCs (Huawei, Lenovo, Haier, ZTE, etc.) have opened 62 R & D centers in 23 countries around the world.

In 2013-2014, there were more than 2 million (!) factories, factories and small manufacturers of high-tech products in China. At the heart of the innovation industry of the People’s Republic of China is a cluster system, which assumes a large role of the state, but easily allows for the influx of foreign investment and technology.

Today, Beijing is setting a new ambitious task – the transformation of all industrial clusters into innovative ones. China’s scientific potential is reaching a qualitatively new level, when the country can no longer just “copy” other people’s technologies, but create its own “know-how”.

Thanks to a serious scientific and technical base, China produces its own and licensed analogues of the latest high-tech equipment, mini-factories, production lines. Chinese manufacturers, using Western models as a prototype, are able to provide an optimal price-quality ratio.

Among the clusters that can be called innovative, there is a cluster of integrated circuits “Zhangjiang” in Shanghai, a cluster of semiconductors and lighting devices, as well as a cluster of new metals in the cities of Jiangsu province, a cluster of computer software products in Chengdu, Sichuan province, etc.

Third, China has a reasonable policy of liberalization and promotion of innovative activity of subjects of different levels.

China makes maximum use of comparative advantages in production and rational protectionism in the market of technotronic products. To stimulate new scientific developments, Beijing has also taken a number of measures to reduce the tax burden in high-tech sectors of the economy.

The state actively creates the most favorable conditions for business. It is significant that the most expensive high-tech company in the world, Apple (the market value in 2015 is $ 700 billion), produces its products only in China. In addition, the effect of a favorable business environment is also an increase in the share of the private sector in R & D financing, which in 2013-2014 reached 74%, with the state share of 26%.

In 2002 The Chinese government has adopted a number of legislative measures to tighten the import and export of technologies. So, all technologies are divided into 3 categories: prohibited, regulated (Technology Import license needed), freely traded. In 2009-2013, in the last two categories, the list of imported technologies was reduced to 370, the state encourages with tax benefits or exempts from taxation those enterprises that acquire technologies from this list or receive intellectual property rights.

The state is focused on eliminating weaknesses in the system of state support for the innovation chain in the economy “fundamental research – applied development – production of high-tech products”. In this regard, the integration of scientific institutions and universities with industrial enterprises opens up great opportunities.

For example, a large Chinese corporation Huawei has created an entire academic network (Huawei Authorized Network Academy, HANA), within which it conducts research in the field of telecommunications at universities around the world (for example, in 2013 Huawei allocated $ 15 million. Cambridge University for the study of advanced communication technologies of the 5th generation).

Fourth, China’s achievements in the field of science and technology are based on a well-thought-out strategy to increase intellectual capital.
Today, there are significantly more large successful companies using innovations in China than in Brazil, Russia and India. Moreover, they grew up mainly from state research structures.

In the ranking of the world’s largest companies “Fortune Global-500″ : in 2014, there were already more than 70 Chinese companies, many of which operate in the market of high-tech products (in 2002 there were only 11 of them). The controlling stake in the” national champions ” belongs to the state.

The cultivation of its “army” of technical specialists is indicative. Every year, Chinese universities graduate 10 thousand engineers with a doctoral degree, more than in the United States and the EU combined. Given the fact that their work is relatively cheaper with a fairly high quality, large Western corporations are actively moving their R & D to China. Today, the centers of “Microsoft”, “Intel”, “General Electric”, “Sony”, “Toshiba”, “Airbus” and others are already operating in China. – in total, more than 1,200 (in 1999 – 30).

Quantitative comparison of patents for inventions in 2013-2014

The level of innovation is also assessed by the number of new patents and scientific publications. Here, China came in fourth place back in 2008, and Chinese scientists have published up to 110 thousand scientific publications (USA-350 thousand, EU-325 thousand, Japan-180 thousand).

According to the Thomson Reuters agency, according to the industry structure of Chinese patents, the PRC dominates in 2 areas-digital and communication technologies and pharmaceutical technologies. For example, China accounts for almost 80% of patents on alkaloids (plant extracts) and about 60% in pharmaceutical research in the world. These patents are related to traditional Chinese medicine.. According to the World Intellectual Property Organization (WIPO), in 2006-2013, the share of applications for international patents filed by the PRC tripled.

An important role is also played by ethnic Chinese attracted to the country from abroad, who received education abroad and worked in foreign research institutes and TNCs (for example, since 2004 alone, students who returned from abroad have founded more than 2 thousand companies in the Zhongguanchun Technopark). The Government is making efforts to attract talented personnel from abroad within the framework of the “100 talented People” program for the development of science in China.

Fifth, the new strategy of the People’s Republic of China for the development of high-tech clusters stipulates that it is necessary to produce not just innovative, but radically new products.

Consistently high investments allow the PRC to effectively develop the creative economy. To achieve this goal, Beijing will continue to increase the pace of investment in R & D, and, as expected, after 2024, China may well outpace the United States and the EU in investing in innovative developments – even taking into account the fact that the West will continue to have a high level of spending on science.

Today, Beijing is especially boosting its own research in the fields of energy, transport, electronics, nanotechnology, communications, biology, medicine, aviation and space:

  • Electronic components, high-end chips, software Technologies for the production of large-scale integrated circuits Environmental control and water pollution treatment technologies

  • Advanced digital controlled mechanisms and technologies for their production Large-scale research of new methods of oil and gas production A new generation of broadband wireless communications
  • Large advanced
  • New generation nuclear reactors Innovative developments in medicine and the creation of new drugs in pharmaceuticals New generation aviation and the creation of large aircraft
  • Biological development and breeding of new safe varieties of GMOs Manned space flights and a lunar sounding program A high-resolution space Earth observation system

Experts also note that many projects remain non-public for the time being. The ambition and scale of the announced innovative projects indicate that Beijing is determined to change the existing order in the “high-tech” hierarchy of the world.

1. Beijing understands very well that in the context of globalization, a development strategy based on the use of new knowledge and scientific and technological achievements in production and management is the most effective for maintaining a leading position in the world. Having achieved tangible results in the development of the innovation sector, the PRC has entered a new era of development for itself: when it is necessary to move not only to a new level of technological development, but also it is important to reduce the existing significant costs.

2. Despite the significant increase in the share of business in innovative development, the state still plays one of the main roles in the development of high technologies. In a number of regions of the PRC (western and central), clusters are formed not by market, but by administrative measures. With all the power of state support, the disadvantage of such clusters is the lack of interconnection between companies, which leads to costs. According to Western experts, the quantitative superiority of Chinese investment projects still does not always ensure their quality. Thus, a significant share of the growth of Chinese patents appeared only in the last 4-5 years. New patents have not yet been sufficiently tested to speak about their effectiveness. In addition, Chinese companies are still often accused of industrial espionage and violation of international intellectual property rights.

3. In general, however, despite China’s continuing qualitative lag behind the leading countries, its role in the global innovation system is growing every year. Despite a number of shortcomings, today the PRC is becoming one of the world centers of their development and production from a country that actively copies foreign technologies. In many respects, the innovative development of the People’s Republic of China is based on the pragmatic use of the advantages of both Chinese (cheap labor, competent personnel policy, broad financing) and international (the advantages of late development, attracting investment, technology transfer).

4. Currently, China is consistently introducing new “rules of the game”, forcing foreign corporations operating in the country to share their technologies with Chinese state-owned enterprises. In addition, it is important for China today (both from an economic and image point of view) to actively project its scientific and technological power outside and change stereotypes in favor of the fact that: “Chinese means high-quality”. In this regard, Chinese high-tech companies are now more open to various forms of cooperation, since it is necessary to promote their image and strengthen their positions in new markets.

Number of shows: 1667