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Overseas views on NPC & CPPCC: Innovation-driven economy: Complementary roles of government and private-sector

Editor: Li Kun 丨CCTV.com

03-05-2016 15:03 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, convened 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 ongoing 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 exerted various efforts to promote innovation-driven growth.

The following are email interviews by Panview with Gina Caballero, China Officer for CAF Development Bank of Latin America, and William Vega from Peru, who is  a PhD. candidate at Renmin University of China, to discern their opinions on what roles the government and private-sector should play in accelerating China’s innovation-driven growth.

Panview: Should innovation be driven by the government or private-sector?

Caballero: Both government and the private sector have important roles in driving innovation forward, which complement each other in creating a hybrid of collaboration. The role of government should be to create an enabling environment, which equally and equitably regulates the behavior of its participants in order to ease their innovative endeavors. In this sense, multi-sectorial partnerships, between the government and the private sector but also along with universities and technical centers, are all key in enabling innovation.  The articulation of their respective strengths is vital for the participation of diverse stakeholders in innovation and development. It ensures joint ownership and, therefore, sustainability.

Vega: The government and private sector play important and inseparable roles to promote innovation in China. The government, as the creator of the legal, institutional, and economic conditions guarantees and incentivizes innovation. And the private sector as the active agents of generating and applying innovations.

Panview: So, where should we focus our attention to promote innovation?

Vega: Because of the economic slowdown, the Chinese government is offering more funding for start-up companies. Companies can take advantage of relative low salaries, the evolution of internet portals and platforms to sell and buy online inside and outside of China, and the Chinese big internal market.

Without a doubt this measure is important. In many developing countries, SMEs (Small-medium enterprises) are vital to the economy. And China is no exception, SMEs account for 99 percent of the country's total enterprises. SMEs play a crucial role creating more than 75 percent of jobs, contributing to more than 60 percent of the GDP, more than 50 percent of tax revenues, and more than 68 percent of total export volume in 2014.

Caballero: Developed countries such as Sweden and Germany owe their innovation success to the above-mentioned multi-sectorial partnerships. China is en route to constructing them as it learns to combine skilled human capital, sophisticated technologies, sizable resources and increasing global reach to generate powerful catalysts for innovation and change. 

The Zhongguancun National Demonstration Zone, China's silicon valley, is a case in point, congregating colleges and universities including Peking University and Tsinghua University; enterprises; as well as Baidu and Lenovo; scientific institutions, state-level laboratories, national engineering centers, among others. The Zone is a prime catalyst for generating synergies between different agents in the advancement of technological change. Among its breakthroughs so far it has come out with the super computer and human vaccines against SARS and bird flu.

Panview: What advice would you offer to avoid detours in the process of promoting innovation-driven economy?

Vega: As many other developing countries have already learned, there are two important challenges to promote innovation: The strengthening of the Institutions, as the rules of the game in society, that allow: protection of property rights, effective law enforcement, efficient bureaucracies, among others that grant conditions and guarantees innovation in society.

And the most important aspect to develop all societies: Education. The education system should promote: creativity, innovation and research.

In contrast to other developing countries, China has the funds and political will to implement important measures, and has already begun: To carry out the creation of development and high-tech zones; to support incubation programs, start-ups; to create research and development centers; to invest in education, internationalization of universities and other institution, and etc.

According to different actions conducted by the government, along with the private sector, advantages and challenges, we can say that the intention to transform China into a world leader in science and technology by 2050 is likely.

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).

William Vega is an economist from Peru, he worked for more than 10 years in both the Private and Government sector in China and Peru, doing economic and managerial analysis, and now he is a PhD Candidate in Management at Renmin University of China.


( 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.

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