OECD Reviews of Innovation Policy: China

OECD Reviews of Innovation Policy: China. Paris: OECD, 2008.

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China has achieved a spectacularly high rate of economic growth over a sustained period for more than two decades. Nevertheless, today China faces the challenge of making the transition from sustained to sustainable growth from social, economical, ecological and envionmental points of view. Innovation has been identified as a main engine for this new growth model, and the Chinese government has launched a national strategy to build an innovation-driven economy and society by 2020. Will China be able to succeed in making this challenging transition? What will it require in terms of policy and institutional changes? How will China's emergence as a future innovation economy affect the OECD countries, as well as the global systems for knowledge production, dissemenation and use?

This publication sheds light on these issues by assessing the current status of China’s national innovation system and policies, and by recommending the most important improvements required in both the policy and institutional environments for China to succeed in promoting innovation through a market-based approach.

This book is part of a series of OECD Reviews of Innovation Policy.

Key findings in this volume include:

• At USD 73.5 billion in purchasing power parity (PPPs), China’s GERD was the third largest worldwide in 2006, after the United States and Japan.
• The R&D intensity – the ratio of GERD to gross domestic product (GDP) – of China’s economy has increased spectacularly. It reached 1.43% of GDP in 2006, up from 0.6% in 1995.
• However, China’s spending on R&D remains heavily 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.
• Although rising rapidly, only 11% of patents by Chinese firms in 2006 were considered inventive (invention patents), compared with 74% of patents by foreign firms patenting in China.
• Foreign-owned companies (including joint ventures and wholly owned), including those controlled from Hong Kong and Macao, China, and Chinese Taipei, account for an ever-growing share of total high-technology exports, which have increased from 73% in 1998 to 88% in 2005. These trends continued in 2006.
• Chinese high-technology industries continue to have much lower R&D intensity than their counterparts in most advanced OECD countries.
• In 2006, high R&D intensity remained heavily concentrated in some regions, notably Beijing, Shanghai, Shaanxi, and Sichuan.

Table of Contents

• Introduction
• Executive Summary
• Part I. Synthesis Report
• Part II. Thematic Chapters
• The Chinese Innovation System: Main Features and Performance
• Chapter 1. Institutional Set-Up, Performance, Objectives and Key Challenges
• Chapter 2. Innovation and R&D in China's Business Sector
• Chapter 3. China's Public Research Institutes
• Chapter 4. Industry and Science Relations
• Chapter 5. China and the Globalisation of Research and Development
• Chapter 6. Human Resources for Science, Technology and Innovation in China
• Chapter 7. Regional Innovation Systems in China: Insights from Shanghai, Sichuan and Liaoning
• The Role of Policy and Governance in Innovation
• Chapter 8. The Evolution of China's Science and Technology Policy 1975-2007
• Chapter 9. Framework Conditions for Innovation
• Chapter 10. Governance and the Role of Government in the Chinese National Innovation System
• Chapter 11. Chinese Research and Development Programmes for Science and Technology

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