Edition: English Asia Pacific Africa Europe | Español Français العربية Pусский | 中文简体 中文繁体
Homepage > News

Overseas views on NPC & CPPCC: Innovation-driven economy, China will make it!

Editor: Li Kun 丨CCTV.com

03-04-2016 14:16 BJT

Full coverage: 2016 NPC & CPPCC Sessions

Editor's note:  The National People's Congress (NPC), China's top parliamentary body, and the Chinese People's Political Consultative Conference (CPPCC), China's top advisory body, are scheduled to convene its annual sessions, known as the "two sessions" on March 3-15 2016, which marks a pivotal year as the nation continues on to embark with its reforms and opening up policy, shifting towards a "New Normal" for economic growth rates, starting its 13th Five-Year Plan for social and economic development over the next five years and confronting challenges on the foreign policy front. How will the NPC address those concerns? What do foreign experts and Overseas Chinese say? The Panview Column of CNTV has invited some of them to express their views on major issues to be discussed at the two sessions.

During the 2015 Two Sessions, Chinese Prime Minister Li Keqiang had officially included the phrase, "massive entrepreneurship and innovation by all" in his government work report. During the past year, Beijing has inserted various efforts to promote innovation-driven growth.

The following is an email interview by Panview with Gina Caballero, China Officer for CAF Development Bank of Latin America, on her opinion about China’s innovation-driven growth.

Panview: China hopes to encourage Chinese startups to focus on creating a more innovation-driven economy. Will they succeed?

Caballero:The success of startups depends on different kind of factors. For example, whether they have a truly innovative product and/or process that alters behavior and eases the way of doing things of the consumer group it targets. At the same time, adequate financing and capital seeding are crucial in supporting risk-takers in their innovative endeavors.

The executing team is also key for deploying its skills and setting commitment and flexibility into its business course despite the obstacles and hurdles it might face. Hence, an enabling environment can be enabled as much as by the government as by its working team determines the success of startups.

China has been setting a sound platform for setups. In recent years it has continued investing in R&D. Between 2003 and 2013, China increased its R&D investments at an average of 19.5%. It is now the global number two in R&D expenditures, accounting for 20%, and behind the United States, which has a share of 27% of total expenditures.

Moreover, it produces more undergraduates with degrees in science and engineering than any other country in the world. 49% of all bachelors degrees in China are awarded in that field, compared to 33% in the United States.

While, its special economic zones are set up to drive the first generation of reforms in China, such as in Shenzhen, laid down the network of supply chains necessary for manufacturing new ideas into the market. Thus, startups in China have a good infrastructure for their innovations to kick off.

The question is not so much whether they would succeed or not, as seen in other markets some do some don't, but whether agents have the capacity to learn from both successes and failures. The path towards an innovation-driven economy is also a learning curve of trial and error. 

Panview:What positive role can the government play to spark more innovation? Will building more government sponsored R&D zones help?

Caballero:Government has a fundamental role to foster innovation by setting a strategic framework and incentives for agents in the economy to invest time and effort in pursuing the materialization of their inventions. Government R&D investment is crucial to support innovations coming into the market.

As the US experience shows, this investment injects the seeds for business and academia to act upon their creativity. The US National Science Foundation was the one providing funding for the algorithm behind Google, while the CIA and the military funded the minds of GPS.

In addition, government should have the capacity to provide a level playing field for actors to protect their innovations and fairly compete in the market, through, for example, intellectual property and anti-monopoly regulations. Favorable tax, legal and fiscal policies also need to be deployed to ease businesses and spark innovation.  

Over the years, China has established different Economic and Technological Development Zones across its provinces geared towards driving R&D. These are important R&D focal points so long as they have the suitable industrial structure and communication and transport links that can match local factor endowments to their ecosystems.

Given the number of these special economic zones in China, it could be wise to evaluate their success and upgrade their structures to meet the demands of a new round of deepening comprehensive reforms the country is undergoing. Beijing could best manage the effective allocation of its economic resources. 

Panview:What sectors in China are benefiting the most from innovations? What sectors in China need more innovation to spark higher growth?

Caballero:There are a number of sectors that are growing fast as the Chinese economy continues to upgrade and transform itself. It is worth noting that the value added to China's new technology industry grew by 10.2% in 2015, and faster than that of normal industrial enterprises.

The manufacture of aerospace vehicles and equipment grew by 26.2%, that of electronic and communication equipment by 12.7%, and of optical and photographic equipment by 10.6%. These new industries are getting closer to making major breakthroughs in innovation.

Furthermore, the Internet and e-commerce in China are already revealing the nature and geniuses of Chinese innovation. Companies including Alibaba and Tencent are changing consumption patterns and the way Chinese people communicate with one another. 

While attention must be paid to China's traditional sectors, such as textile and construction, which could by advance structural upgrading modernize their engines and contribution to China's transition to a new growth model.

In the textile industry, China could become an innovator of new materials and synthetics that are environmentally-friendly and safety savvy for consumers.

Panview:What is the future of China's innovation-driven economy?

Caballero:China's future innovation-driven economy has clearly and ambitiously been outlined in the master plan "Made in China 2025." The transformation to a manufacture power will unleash innovation as a driving engine of China's new socio-economic development model.

Bearing in mind its historical developmental experience, China will get to that future gradually and generating its own sets of special characteristics along the way. 


Gina Caballero is the China Officer to CAF Development Bank of Latin America and an associate researcher at the Emerging Market Institute at Beijing Normal University. She was a former consultant to the UN Economic Commission for Latin America and the Caribbean (ECLAC).

( The opinions expressed here do not necessarily reflect the opinions of Panview or CCTV.com. )

 

 

Panview offers a new window of understanding the world as well as China through the views, opinions, and analysis of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Panview offers an alternative angle on China and the rest of the world through the analyses and opinions of experts. We also welcome outside submissions, so feel free to send in your own editorials to "globalopinion@vip.cntv.cn" for consideration.

Follow us on

  • Please scan the QR Code to follow us on Instagram

  • Please scan the QR Code to follow us on Wechat

We Recommend

  • World Heritage China Part 29
  • Glamorous Indonesia Part 2
  • Along the Coast Part 41
  • Glamorous Indonesia Part 1
  • Dreams and the business reality
  • Philippines' beauty pageant obsession
  • China's love for basketball
  • Box office online
  • Jixi: Land of luminaries II