Peter MacKinnon - extended on-line version

China's S&T strategy: A 'Great Leap' forward

By Peter K. MacKinnon

China has experienced broad and sustained economic growth for a number of years. The mechanisms by which that growth has been sustained are changing. Chinese leadership is driving that change. Why?

Today China faces a major challenge in making a transition from sustained economic growth to one of sustainable economic growth. Science and technology (S&T) are seen as the key drivers to achieve this transition within the context of innovation. This includes ‘invention' innovation in the classical sense; as well as from the perspectives termed "integrated innovation" or the fusing of existing technologies in new ways, and "re-innovation", which specifically aims at assimilating and improving technologies from abroad.

This article is an update on an Opinion Leader contributed to these pages in August 2007 (R$, August 13/07). At that time, I commented that China's S&T Strategy was a "work-in-progress". Why so? What has happened since then and what are the plans for the future - these are the subjects of this update.

For starters, by the end of 2007 China ranked as the 4th largest economy in the world, up significantly from its doldrums of the previous century. By mid-2010 China became the 2nd largest economy and it is anticipated to surpass the US sometime between 2020 and 2030. The Chinese economy is now more that 28 times its size than 30 years ago when the economy was smaller than Canada's. Today it is nearly four times the GDP of Canada.

Until 2006, the common goal in all preceding S&T reforms, strategies, and programs going back to nuclear weapons development in the 1950s-1960s, had been an attempt to catch up to the West by whatever means. Since 2006 China set a new course to primarily pursue S&T strategies based on indigenous research and development. Concurrently, China is moving toward strengthening its basic R&D capabilities, enhancing its S&T talent pool, and revitalizing its intellectual property (IP) granting processes and enforcement procedures.

For at least a decade Chinese leadership has recognised that fundamental change is required within policy, programs and resources in order to foster an innovation-oriented society. Principal among these is a need to re-orient the Chinese economy from a high dependency on exports and the use of foreign technologies and related IP to one of greater consumption of domestically produced products, technologies and processes based on the outputs of Chinese S&T.

As part of the process to achieve this re-orientation, it is seen as essential by planners that Chinese-developed S&T play a much more significant role in creating commercially viable outputs. A major impact of this is the strategic move away from the dominant policy of the past, that being of offering foreign corporations market access for technology licensing and joint manufacturing rights in China. The longer-term ramifications of this may well change the playing field for foreign company operations in China by increasing the degree of competition in favour of domestic firms as well as witnessing the emergence of new global-scale technology-intensive Chinese firms such a Huawei, a global telecommunications solutions provider with revenues on par with Nortel Networks Corp in its heyday. In fact, Huawei has hired a number of former key scientists and engineers from Nortel.

The R&D intensity of China's economy has increased significantly in the past 15 years. According to the OECD, China invested 1.43% of GDP in R&D in 2006, up from 0.6% in 1995. Until 2006, China's spending on R&D remained dominantly focused on experimental development; only 5.2% of all R&D in 2006 was aimed at basic research, compared to 10-20% in OECD countries. Furthermore, only 11% of patents by Chinese firms in 2006 were considered inventive, compared with 74% of patents by foreign firms registering in China.

In recent years, it has become clear to China's leaders that the real value-add in the market for advanced technologically-based products and processes vests with those who own the IP and influence global technical standards. Consequently, in January 2006 China initiated a 15-year Medium to Long-Term Plan for the Development of Science and Technology (MLP). This bold plan calls for China to become an innovation-oriented society by 2020 and a world leader in S&T by 2050. By 2020 China plans to be investing 2.5% of its GDP in R&D. The MLP also aims for China to become one of the top five countries in the number of invention patents granted to its citizens.

MLP views S&T needs in terms of 11 key areas within the economy (e.g., agriculture, population and health, and energy). Based on these targeted application areas, the MLP prescribes programs and actions in eight key ‘frontier' technologies (e.g., advanced manufacturing, new materials, and biotechnology). Furthermore, given the interdisciplinary nature of many scientific and technical pursuits, the MLP features four major science-based megaprojects (i.e., development and reproductive biology, nanotechnology, protein science, and quantum research). It also includes 13 engineering megaprojects (e.g., drug innovation and development, manned aerospace and Moon exploration, and water pollution control and treatment).

In March 2011 Beijing celebrated the findings and accomplishments arising from major S&T programs and projects carried out during the first five years of the MLP. This celebration was a demonstrable illustration of the significant progress on many fronts China has made over this period and included some 600 projects such as Tianhe-1, now the world's fastest high performance computer; a prototype lunar lander and rover; new advanced nuclear reactor designs; 10,000m deep well-drilling equipment, and much more. China is now focused on creating domestic advances in S&T rather than relying on foreign developments while pushing the technological frontier at the same time.

The MLP addresses four critical issues aimed at fostering development of Chinese S&T, with a strong emphasis on economic gain and advantage. First, given the IP issues noted above, the MLP is intended to enable China's economy to capitalize on domestically developed and applied IP and to set its own course in influencing and setting international technical standards. For example, the S&T enterprise is being aligned with the banking system to facilitate commercialization financing for domestic firms adopting S&T outputs. There may well be lessons to be learned here that could be relevant to re-vitalizing the commercialization of Canadian S&T outputs.

Second are social needs. China faces grand challenges in a number of key areas from environmental protection and dependable energy supply to healthcare improvements to more effective resource management in terms of both renewable and non-renewable, including food production.

Third, the perceived need to support military requirements with advanced technologies and products independent of foreign sources is seen as paramount, particularly with respect to dual-use technologies.

The fourth critical area addressed by the MLP is the state of the national science enterprise. Given the plans and resources made available in this area over a number of years, by the early 2000s there was a growing sense among planners that numerous expectations were not being met. For example, the number of scientific papers published in international journals has risen significantly in recent yearsbut citations of these papers are unexpectedly low, indicating that domestically produced papers by many Chinese scientists and engineers are not yet widely accepted as being on the leading-edge of discovery in the international technical community. Hence, the MLP has a major thrust in increasing the quality of science and engineering education and research at Chinese universities.

In my view, China's re-vitalized S&T strategy is now attuned with and supporting the economic, social and geopolitical rise of the country. It has taken many years to achieve this ‘leap forward' in thinking and planning. Few countries can afford to take this position on such a broad front. Moreover, execution, as illustrated by the outputs demonstrated at the March celebrations noted above, is improving year-over-year. Some areas are perhaps a bit aggressive in their targets, such as the number of patents expected to be filed by 2015, around a million a year. This is more than 50% larger in volume that the busiest patent centre in the world today - the US Patent Office. It is anticipated that the domestic contributions to economic growth from technological developments will be more than 60% and dependency on foreign technologies will be limited to less than 30% by 2020. These are clear metrics that in the relative short-term of the next decade will show if China can play on the world stage as an S&T superpower in keeping with its plans. Achieving global dominance in S&T by 2050 remains a target, the boldest target China has set for itself in terms of S&T expectations.

Peter MacKinnon is executive director of the WiSense Project at the University of Ottawa's School of Information Technology and Engineering

China Background

Mr MacKinnon has had a long and extensive involvement with China from being a delegate on Canada's first modern student exchange in 1970s; working with Chinese scientists and academicians in the late 70s and early 80s; sponsoring a guest Chinese researcher in his artificial intelligence company in the mid-80s; and hosting Chinese delegations to Canada as well undertaking visits to China in the 1990s. More recently he spent six years working with various scientific and technical organisations in Shanghai were, among other things, he co-authored a book in Chinese with Chinese academic colleagues. He has introduced numerous Chinese companies to other Chinese and overseas companies with a view to promoting business relations. During his numerous trips to China he has visited a number of Chinese universities, colleges, academic oversight organisations, and government laboratories. He has attended both national and international conferences in China as well as delivered public lectures there.