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Indigenous Innovation in China

Indigenous Innovation in China

“Let China sleep, for when it wakes, it will shake the world.” – Napoleon

True to Napolean’s words, China moved the whole world when its economy grew faster than that of any other countries in the world. China quickly became the topic of discussion at nearly every political meeting or seminar throughout the world. China set an example to the world. Today, the world is looking at China with even greater expectations. Will China be able to retain it’s position in the world and become a model of innovative growth as well?.

In this background, the presentation, “Indigenous Innovation in China” gives an insight into what was the status of China was 10 to 12 years ago and what it is today with the framework and implementation process of Indigenous innovation policy in China.

Once a gritty industrial city of Shanghai filled with low-rise buildings, today turned into the most advanced city with more than 400 skyscrapers and world class facilities.

Many interesting facts and figures of China show the growth of China in comparison with the rest of the world. The Economist 2011 quoted that China’s economy could overtake the U.S. economy by 2019. Goldman Sachs forecasted the China’s GDP growth for 2012 at 9.5%.

“Innovation is the core of our national development strategy and a crucial link in enhancing overall national strength” – President Hu Jintao, 2007.

The Chinese government introduced the “indigenous innovation” strategy in 2006 to transform China into an “Innovation-Oriented” nation by 2020 and a global leader in science and technology by 2050.

Current policy implementations include the following: Government procurement; Technical standards; Competition policy under the antimonopoly law (AML); Taxation policy; and IPR protection and enforcement.

  • The Government Procurement is a clear policy that favors the Chinese companies and the products of Chinese innovation and all accredited products received preferences from the government.
  • The Chinese standards are either mandatory or voluntary including the China Compulsory Certificate (CCC) program, a mandatory safety certification program covering 22 product categories.
  • Mergers and Acquisitions (M&A) between foreign and Chinese firms manages competition in a way that would benefit Chinese competitors of foreign companies.
  • Improvement of Special tax policy ensures that high-tech Company gets free income tax for the first two years and half for next three years after its profit year.
  • The IPR Protection and Enforcement Policy displace foreign IP while promoting its own IP.

With sustained growth becoming increasingly difficult, these innovation focused policies are designed to build a greater China. Click here for full presentation.

The New Asia Innovation Team