Analysis of China's High-tech Plan Released

The high-tech trade association AeA, formerly known as the "American Electronics Association," has released the 14th edition of its competitiveness series. The report outlines the "15 Year Science and Technology Plan" announced by Chinese leaders in January 2006 and analyzes China’s capacity to implement the plan.

China’s 15-Year Plan is designed to boost science, technology, and innovation with the long-term goal of becoming a preeminent global economic and technological power. It calls for China to raise R&D spending from the current 1.4 percent of its economic output to 2 percent by 2010 and 2.5 percent by 2020. With China’s GDP growing by over 7 percent per year, these commitments would put Chinese R&D investments above $100 billion annually, placing it in the same league as the U.S. and Japan.

Among the highlights, the report points out that:

• In early 2006, China announced a 15-year plan to boost science, technology, and innovation with the long-term goal of becoming a preeminent global economic and technological power.
• Though every detail of the plan has not been made public, it calls for China to raise R&D investment from the current 1.4 percent of its economic output to 2.0 percent by 2010 and 2.5 percent by 2020.
• China is pouring investment into its universities to create world-class education and research centers. Since 1998, state financing for higher education has more than doubled, reaching $10.4 billion in 2003.
• China had 926,000 researchers in 2004, second only to the United States -- 77 percent more than it had in 1995.
• China’s 15-year plan intends to move the country beyond its current reliance on foreign technology to spawn "indigenous innovation." China faces challenges in enacting its 15-year plan: protecting intellectual property; reforming capital markets; encouraging risk taking; and embracing the free flow of ideas required for innovation.

China's growing technology industry is largely dominated by multinational companies and much of this is low value-added, labor intensive manufacturing. The 15-Year Plan intends to change that by investing heavily in such cutting-edge areas as nanotechnology and biotechnology to spawn "indigenous innovation."

Posted by Jon Erickson at 10:53 AM  Permalink