Introduction to the

Innovation System of China

December 6th, 2013

XU Jianguo,

Director-General,

Office for Innovation System, Ministry of Scienc

e and Technology, P.R.China

1. Background

2. Main Achievement

3. Key Deployment

OUTLINE

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• Global economy under profound adjustment: EU sovereign debt crisis, capital flight from BRICS countries (in 2012, the developed economies grew by 1.3%, and the emerging economies 5.3%)

• A new Sci-tech revolution and industrial transformation represented by new energy, new material, information, biology, nano tech are under incubation at a faster speed

• Common choice: S&T innovation, real economy and quality employment

– US: go for innovative economy and reindustrialization, invest 3% of GDP in R&D

– EU: Horizon 2020 Program, investment totaled €80 billion ．– Japan: S&T comprehensive innovation strategy, prioritize economy, deli

ver social security and rich life to people, explore the unknown

1. Background

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China's Strategic Choice--Innovation Driven Development

• In Jan. 2006, China published The Outlines on Medium and Long Term Planning of

Scientific and Technological Development (2006-2020), which introduced the policy o

n indigenous innovation and the goal toward an innovation-oriented country

• In July 2012, the national S&T Innovation Congress introduced the No.6 Doc-Opini

ons of the CPC Central Committee and State Council on S&T System Reform and Nati

onal Innovation System Development, focusing on improving the innovation capacity

of enterprises and facilitating the integration of S&T and economy.

• In Nov. 2012, the 18th CPC National Congress introduced the strategy of innovation

driven development

1. Background

To implement the strategy of innovation driven development necessitates the developme

nt of the national innovation system with Chinese features.

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Indigenous Innovation Capacity Has Notably Improved.Social R&D expenditure grows by over 20% annually for years.

In 2012, the expense reached 1.02984 trillion RMB (1.98% of GDP) and world No.3

• R&D personnel reached 3.2 million man-year and world No.1

• The number of scientific articles included in SCI stood at world No.2 for consecutiv

e four years

• Granted patent for invention reached 217,000 copies and world No.3

• Technology turnover increased by over 20% annually, reaching 640 billion RMB in

2012

• The aggregate output value of the high-tech industry has registered sustained and f

ast growth.

2. Main Achievement

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Major Achievements in S&T Innovation

2. Main Achievement

Cutting-edge technologies including Shenzhou-9 Spacecraft docking with Tiangong-1 target module and Jiaolong manned submersible reaching 7000 m deep.

Progress made in basic research on Quantum Entanglement and Anomalous Quantum Hall Effect

Tackled key technologies including hybrid rice, superconductivity power transformation, 65-40 nano etcher, TD-LTE-based broadband multimedia, and the 3000-metre semi-submersible drilling platform. Industry grows stronger and more competitive and the economy more technology based.

Ø16 Major Special Programs

ØNational Science and Technology Infrastructure Program (key technology R&D)

ØHigh-tech R&D Program

ØNational Basic Research Program

ØNational Natural Science Foundation

ØSpark Program

ØTorch Program

ØAchievement Transformation Fund

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Innovation Capacity Keeps Growing.• In 2013, Chinese mainland ranks as the 21st most competitive eco

nomy in the world (Hong Kong, China, 3rd). A developing China

boosts the competitiveness in Asia. (IMD World Competitiveness

Scoreboard 2013, International Institute for Management Develop

ment Business School in Lausanne)

• National Innovation Index ranking rose from 38th in 2000 to 20th

in 2011. (National Innovation Index Report 2012, Chinese Acade

my of Science and Technology for Development)

2. Main Achievement

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• The main players need to be more innovative: especially enterpris

es

• The industry lacks core technologies:key parts, new materials and

equipment are export-depended (95% of digital controlled system,

and 85% of integrated circuit)

• Innovation elements cannot flow freely: including talents, technol

ogies, etc.

• Synergy and openness needed: need more synergy innovation and

going global further

Problems

We must deepen reform and rely on enterprises to improve innovation capacity.

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Center on implementing the No.6 Doc.• Strengthen leadership and organization: The State Council established the Leading

Group of National SCI-TECH System Reform and Innovation System, headed by vi

ce premier LIU Yandong

• Clarify responsibility to fulfill tasks: Compile and implement the Work Plan for the

No.6 Doc, which introduced 62 tasks and 242 reform measures.

• Make steady progress while focusing on priorities: Identified 20 key tasks for refor

m

• Related departments has published 105 docs on reform policies.

• CPC committees and governments of each province, autonomous regions and muni

cipality directly under the central gov have all introduced policies and docs accordi

ngly.

3. Key Deployment

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Organization

GOV

Policies and l

aws

Enterprises (large and key enterprises, Medium, small an

d micro ones)

Universities

Intermediary (platforms, incubators, tech transfer institutes)

Military and civilian integrati

on

tech transfer

industry-university-research coopera

tion

Research institutes

Leading Group of National SCI-TECH System Reform and Innovation System

Leading Group Office ( in MoST)

Ministry of Finance

National Development and Reform Commission

MoST

Ministry of Industry and Information Technology

Ministry of Education

Chinese Academy of Sciences

Chinese Academy of Engineering

discipline & talent develo

pment

modern system of research institutes

research institutes under enterprises

(26 Ministries and Institutes)

know-how innovation

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―Grow innovation-oriented enterprises(support enterprise research institutions and consolidate the national S&T platform, etc)

―Close collaboration among enterprises, universities and res

earch institutes(support the strategic alliance for industrial technological innovation and synergy innovati

on center, etc)

―Channel innovation resources to enterprises

―Cultivate the policy atmosphere for enterprise innovation

Increase the Tech Innovation Capacity of Enterprises

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• Deepen reform on university research system

(program on enhancing university innovation capacity; combine s

cience and education, and efforts of enterprises, universities, and r

esearch institutes)

• Develop the regional innovation system with local features

(pilots of innovation-oriented provinces and municipalities, etc)

• Improve the military-civilian synergy innovation mechanism

(Enhance the arrangement and coordination for planning, plans, pr

ograms)

Set up the Mechanism for Synergy Innovation

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• The fundamental system: the scientific report system and the innovation survey

system, etc.

• S&T project management reform: Set up and improve the mechanism where de

cision making, implementation and evaluation go independently and supervise

each other. Improve the macro layout and recreate project management process.

Adopt online video review, the legal person responsibility system and project e

xecutive system, etc.

• S&T budget supervision: Set an appropriate propotion of competitive fund agai

nst stable fund, improve the mechanism of compensation on overhead cost, imp

rove the flexibility of budget and discretion of users, impose more strict rules o

n financing, put in place the accountability system, etc.

• S&T resource sharing: open large equipment and facilities, adopt the mechanis

m of performance assessment and incentives

Deepen Reform on S&T Management

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• Evaluation and awarding oriented toward innovation quality and practical contributi

on

• Classified evaluation of various types of research: basic research ( peer evaluation),

applied research (evaluation by third party), industrialization (market evaluation)

• Rewarding system featuring public nomination, scientific deliberation and discussio

n, practical test and public trust; control the number of governmental awards, standa

rdize non-gov. awards, explore science awarding through peer nomination and peer

expert evaluation, etc.

• More support to outstanding and young talents with extraordinary contribution.

Reform on S&T Evaluation and Awarding

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• Implement the established policies (additional deduction of enterprise R&D exp

enses, tax incentives for High-tech enterprises,and acquisition and subscription

of innovative products, etc)

• Revise the Law of the PRC on Promoting the Transformation of Scientific and T

echnological Achievements (technological transfer system of universities and re

search institutes, IPR application and promotion, share and option incentive, inc

ome distribution, public service, etc)

• Enhance integration of S&T and finance (Sci-tech credit, financial leasing, vent

ure capital investment, Sci-tech insurance, special support to SME and micro bu

sinesses)

Improve S&T Policies, Laws and Regulations

Thank you!