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Since the 18th National Congress of the Communist Party of China (CPC), the CPC Central Committee with Comrade Xi Jinping at its core has taken innovation as the primary driving force for development and put it at the heart of the overall development of the Party and the country. With Chinese characteristics and the overall trend of global development in mind, the CPC Central Committee has created plans and arrangements for sci-tech innovation in the new era based on the features of the current situation.
Over the past decade, under the strong leadership of the CPC Central Committee, with the concerted nationwide efforts of the scientific and technical field and its personnel, China’s sci-tech cause has experienced major historic, holistic and structural changes, turning the country into a nation of innovators and helping it blaze a development path transitioning from strong talent and sci-tech capabilities to strong industries, economy and state.
China’s total investment in research and development (R&D) increased from 1.03 trillion yuan in 2012 to 2.79 trillion yuan in 2021, and its proportion of R&D spending increased from 1.91% to 2.44% of GDP. China rose to 12th on the World Intellectual Property Organization’s Global Innovation Index in 2021, up from 34th in 2012. China’s position and role in the global innovation landscape have undergone new changes. China is not only an important participant in cutting-edge international innovation, but also a significant contributor to the resolution of global issues.
Local regions, departments and sci-tech personnel across China have thoroughly implemented the strategic arrangements of the CPC Central Committee; central and local governments have coordinated their efforts; the eastern, central and western regions have cooperated on innovation; and sci-tech, industries and the financial sector have achieved integrated development. Coordinated efforts have been made to support growth, deepen reform and expand opening-up, gathering the force of the whole country together to press ahead with innovation.
Apply the new development philosophy for high-quality development
First, science and technology have led the development of emerging industries. Application of artificial intelligence, big data, blockchain, quantum communication, and other emerging technologies have created new products and new business models such as smart terminals, remote medical services, and online education. China’s digital economy ranks second in the world. Technological breakthroughs have removed impediments to China’s emerging industries. China is also among the top in the world in terms of the solar photovoltaic industry, wind power, new-type displays, solid-state lighting, and advanced energy conservation.
Second, science and technology have helped upgrade traditional industries. With more than 20 years’ research and development of battery electric vehicles, plug-in hybrid electric vehicles, fuel-cell electric vehicles, and battery and management systems, driving motor and power electronics and internet and intelligent technologies, China has formed a relatively complete layout for scientific and technological innovation in the new energy vehicles (NEVs) sector.
NEV production and sales ranked first globally for a seventh straight year. China is rich in coal, which is the country’s primary source of energy. Therefore, the country has accelerated R&D on the clean and efficient use of coal. R&D on ultra-supercritical electricity generators with an installed capacity of one million kW has been ongoing for 15 years, with coal consumption falling to the coal equivalent of 264 grams per kilowatt-hour, which is much less than the national average and leads the world. So far, related technology and demonstrative projects have been promoted across the country, accounting for 26% of the total installed capacity of coal-fired power.
Third, the building of major projects has been underpinned by science and technology. A series of major projects, including an ultra-high-voltage power transmission project, networking of the Beidou navigation satellites, and Fuxing bullet trains, were put into operation in recent years, which are all supported by major technological breakthroughs. The operation of Deep Sea No.1, China’s self-developed deep-water gas field, demonstrates the country’s capability of ultra-deep-water drilling for oil and gas, with its operational water depth exceeding 1,500 meters.
Fourth, science and technology have enhanced the competitiveness of companies. Companies continued to increase their spending on science and technology. Their R&D spending accounted for more than 76% of the country’s total. China increased the additional tax deduction for R&D expenses from 50% in 2012 to 75% in 2018, and then increased this deduction to cover 100% of such expenses for small and medium sci-tech enterprises and manufacturing companies.
The number of new- and high-tech enterprises grew from 49,000 over 10 years ago to 330,000 in 2021, and their R&D spending accounted for 70% of all companies’ spending on R&D in the country. Tax paid by new- and high-tech enterprises increased from 0.8 trillion yuan in 2012 to 2.3 trillion yuan in 2021. New- and high-tech enterprises accounted for over 90% of the companies listed on the sci-tech innovation board of the Shanghai Stock Exchange and Beijing Stock Exchange.
Fifth, science and technology have promoted innovation in regional development. Beijing, Shanghai, and the Guangdong-Hong Kong-Macao Greater Bay Area have played a leading role in pursuing innovation-driven development, with their R&D spending accounts for more than 30% of the total. In Beijing and Shanghai, 70% and 50% of their transaction volume of technology contracts, respectively, were signed with other provinces and cities, demonstrating their role in leading innovation-driven development.
A total of 169 national new- and high-tech development zones are home to one-third of the country’s new- and high-tech enterprises, with per capita labor productivity in these regions being 2.7 times the national average. These companies provide 9.2% of jobs for college graduates nationwide. From January to April, revenues in national new- and high-tech development zones increased by 7.8% year on year to 13.7 trillion yuan, demonstrating a steady growth momentum.
Sixth, China has cultivated top sci-tech talents. Well-trained professionals and strong sci-tech capacity are the prerequisite for a country to become great and prosperous. They are also the most enduring driving force and a most important leading force for high-quality development. China attached greater importance to talents and regarded them as the primary resource and discovered, trained, and cultivated talents in our progress of pursuing innovation.
A great number of sci-tech professionals forged ahead together in an unyielding spirit and made major breakthroughs in core technologies, such as manned spaceflight, satellite navigation, and deep water exploration. Recently, China launched the spaceship Shenzhou-14, marking the beginning of a new era in the development of its space station. China is also home to a great number of internationally competitive high-tech companies, which have made great contributions to solving critical scientific questions and removing barriers in social and economic development.
At the same time, there are still many weaknesses and shortages in China’s sci-tech innovation in terms of originality, high-end personnel, and key, core technologies. We need to seize important development opportunities while dealing with a series of risks and challenges.
We believe that under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the nationwide sci-tech community will further strengthen its confidence in innovation, strive to overcome difficulties, scale new heights and speed up the promotion of high-level independent science and technology. We will make new strides and achieve new accomplishments on the new journey toward building a country strong in science and technology, and pave the way for a successful 20th CPC National Congress with concrete actions.
Li Bijian (—Second part of the “China in the past decade” series)
Copyright Business Recorder, 2022
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