The days of directly learning technology and knowledge from international companies are almost gone.

It is now a widely accepted fact of business life that only by owning its own core technology will a company be able to survive and grow amid the fierce competition of today.

China will have 500 top-level innovative firms by the end of next year, a major step in its shift from supplying resources and cheap labor to technology and innovation, officials say.

Some 184 companies were added to the list of the country's trial innovative firms (TIF) earlier this month, including 30 large State-run enterprises, eight research institutes that are commercializing technology and 146 private companies.

Next year, the list of TIFs will be expanded to 500 to sharpen China's competitive edge in the international market, says Li Xueyong, vice-minister of Science and Technology.

"More favorable policies and regulations, including those on taxation, will be adopted to help build an innovative environment," Li says.

Laboratories and industrial research and development (R&D) centers will be started in TIFs, with provisions made for more training in management and intellectual property right (IPR) protection, Li says.

The country now has 287 TIFs that account for more than 30 percent of its industrial assets and 20 percent of the nation's tax base, Li says.

The newly selected TIFs are in the key sectors of manufacturing, natural resources, agriculture, IT, biotechnology and environmental protection.

China Aviation Industry Corp I (AVIC I), which developed the ARJ21 - the country's first regional aircraft built with domestically developed intellectual property rights - is among the new TIFs.

"Unlike many other made-in-China products, our aircraft is competitive in technology and quality, not just price," says Wang Yawei, director of commercial aircraft division of AVIC I.

Other TIFs to join the latest list include:

IT: Beida Founder Group, UFIDA Software Engineering and Beijing-based Digital China

Agriculture: Inner Mongolia-based Yili Dairy Group and Xinjiang-based Tianye Water Saving Irrigation

Energy and resources: Yunnan Stannum Group, Ningxia-based Qingtongxia Aluminum Group and China Huaneng Group

Manufacturing: China Shipbuilding Industry Corp and Chongqing-based Changan Automobile

Biotechnology: Shenzhen-based Mairui Biomedical Electronic and Jilin-based Aodong Medicine

The country selected 103 TIFs last year, more than half of which had R&D budgets of more than 6 percent of their total revenue.

The TIF program, organized by the Science and Technology Ministry, the State Assets Supervision and Administration Commission (SASAC) and the All-China Federation of Trade Unions, has achieved important progress, SASAC Deputy Director Shao Ning says.

With their R&D investment increasing, the pilot enterprises' innovative ability has been further enhanced.

They have tackled a number of important technical problems and developed core technologies that carry their own intellectual property rights, Shao says.

"The firms, all of which are large companies and leaders in their sectors, will become the country's leaders with their independent core technologies," Shao says.

Innovation is vital for the survival and development of a firm today, says Professor Liu Jisheng from Tsinghua University.

"The expansion of Chinese firms has mostly depended on mergers and acquisitions, rather than on building up their core competitiveness through technological innovation and intellectual property rights," Liu says.

The average expenditure on R&D of 411 of the country's top 500 firms last year was only 1.45 percent of their revenue, while the international norm is at least 5 percent.

"The weak innovation capability of Chinese enterprises is partly caused by the lack of investment in R&D and partly linked with our scientific research system, the educational system and culture which fail to provide an innovative environment," Liu says.

 

(China Daily 12/29/2007 page9)

2013-07-17