China’s efforts to increase R&D investment pay off

A TD220 unmanned aerial vehicle with coaxial main rotor blades is exhibited at the 2018 National Mass Innovation and Entrepreneurship Week at Zhongguancun Science Park, Beijing, October 9, 2018. Photo: People’s Daily Online

China’s increasing investment in R&D is paying off as the country spares no effort to implement its innovation-driven development strategy. Zhongguancun Science Park, the first hi-tech industry pilot zone in China, achieved outstanding performance in the first quarter of this year. High-tech firms above designated level based in the zone saw total revenue of 1.3 trillion yuan ($189.62 billion), up 14.9 percent year on year. Income from technical sales also experienced rapid growth, increasing 23.7 percent from a year ago to 217.16 billion yuan. Major high-tech industries such as electronic and information, advanced manufacturing, as well as new material and its application saw growth of 17.4 percent, 11.4 percent and 11.3 percent respectively. Enterprises in the zone invested 50.84 billion yuan in R&D, up 20.9 percent from a year ago. Science and technology serve as a new driver of the long-term and stable economic development, and the performance of the Zhongguancun Science Park is a miniature.

According to statistics released by the Torch High Technology Industry Development Center of China’s Ministry of Science and Technology, enterprises in China’s 168 high-tech development zones achieved total revenue of 4.9 trillion yuan in the first two months of 2019, up 9.3 percent year on year. These enterprises paid total tax of 290.96 billion yuan, 12.4 percent more than they did a year ago, with profitability standing at 6.1 percent. 46,000 enterprises were newly registered during this period, up 11.6 percent. By the end of February, the fixed assets investment of China’s high-tech industrial zones has grown 7.4 percent to 441.96 billion yuan, 1.3 percentage points higher than the national average. The increased input in R&D of a country signals the improvement of its innovation capability. From 2013 to 2016, China’s expenses on R&D saw an average annual growth of 11.1 percent, the highest in the world, and much higher than that of the US, the European Union (EU) and Japan.

In 2017, China invested over 1.76 trillion yuan in R&D, up 12.3 percent year on year. The growth was 1.7 percentage points higher than that in 2016. The investment accounted for 2.13 percent of the country’s annual GDP, setting a historical high. The record was further renewed last year, with over 1.95 trillion yuan invested in the R&D sector, or 2.15 percent of the GDP, higher than 15 countries from the EU. In addition, China has also further optimized its R&D investment structure and resource allocation. What’s more, Chinese enterprises are not only expanding their R&D investment but also extending their investment coverage from technical development to fundamental researches.

Since 2018, technical giants including Alibaba, Tencent, and Huawei have all established their respective research institutions, hoping to cement their position in fundamental researches. For a tree to grow tall and luxuriant, its roots must run deep and strong. The enhanced efforts to reinforce fundamental researches will no doubt lay a solid foundation for enterprises to make breakthroughs in core technologies and improve core competitiveness. If we compare innovation to a new engine of China’s development, reform is the igniter of the engine is. By making huge efforts to reform the management system for science and technology, China has got rid of the institutional barriers that impeded innovation. The bold reform in project management and the use of funds relieves the burden for research staff and further stimulates their energy for innovation.

Besides, the country has boosted the transformation of scientific and technological achievements, devolved the right to dispose of the achievements, and simplified the approval procedure. As a result, the research staff can acquire more profits from their scientific achievements, which has greatly improved the enthusiasm of colleges and institutions to transform scientific achievements and the motion of scientific personnel to make innovations. In February, the science and technology innovation board was officially launched, opening a new gate of financing for scientific startups that acquire core technologies and possess huge potentials. By May 8, some103 companies have been listed on the board, raising a total fund of over 100 billion yuan. It will give a larger role of the capital market in the innovation-driven economy, and inject new impetus to the innovation of enterprises.

In the January-March period, China received 341,000 invention patent applications, and 116,000 of them were approved. A total of 503,000 applications of patents on utility models were filed in the same period, and 375,000 were registered. In addition, 119,000 out of the 157,000 applications for design patents were granted. Both the numbers of approvals and ownership of applications of invention patents and the patents on utility models saw different levels of growth, reflecting the enhanced enthusiasm and improved capability of innovation. The Standing Committee of China’s National People’s Congress recently amended the trademark law, outlining that the amount of compensation for malicious infringement of trademarks should be up to five times the amount of actual losses, compared with three times before the amendment. It also said the compensation upper limit should be raised from 3 million yuan to 5 million yuan. These revisions will take effect Nov 1. Such high compensation is rare even in the global context, which indicated China’s resolution to enhance the protection of intellectual property rights. Seeds sowed in spring may result in a big harvest in autumn. Science and technology development, an increasingly stronger driving force, will make the Chinese economy more stable, long-term, high-quality and efficient.

By Zhao Yongxin & Yu Jianbin

(People’s Daily)