China Economic Weekly WeChat: ChinaEconomicWeekly
China Economic Weekly official website: Economic Network www.ceweekly.cn
Ge Feng, special commentator of China Economic Weekly
(This article was published in China Economic Weekly, No. 49, 2017)
According to the "2016 National Science and Technology Funding Statistical Communiqué" released by the National Bureau of Statistics, the total investment in Research and Development in China reached 1,567.67 billion yuan in 2016, an increase of 10.6% over the previous year. This is the first rebound in the growth rate of R&D funding since 2012 after a four-year decline.
In the context of the growing investment in R&D, the growth rate of R&D expenditure can rebound again and return to more than 10%, highlighting that China has keenly grasped the key points of development in the new era, and innovation drive is increasingly becoming a decisive factor in China's sustainable economic and social development.
High-intensity investment in research and development has effectively promoted the continuous improvement of China's independent innovation capabilities at all levels. In the case of patent applications, for example, China became the first country in the world to file more than 1 million patents in a single year last year, which the World Intellectual Property Organization commented at the time, "this record reflects an 'extraordinary' level of innovation".
This "extraordinary" level of innovation has really promoted China's industrial upgrading and enterprise competitiveness. From the perspective of export share, the proportion of China's exports in global exports in 2016 has steadily risen to more than 13%, while the three export powers of the United States, Germany and Japan have fallen back one after this indicator reached 10%.
The reason why China has been relatively successful in getting rid of the adverse effects such as rising labor costs is that through continuous and large-scale investment in research and development, it has continuously promoted domestic enterprises to move up the industrial value chain, so although in the past period of time, the proportion of exports of China's labor-intensive products (such as textiles, etc.) and resource-intensive products (such as base metals, etc.) has declined, but the export share of advanced manufacturing industries such as mechanical and electrical, transportation equipment, etc. has risen rapidly. The gap left by the decline in the share of primary exports has been adequately filled.
Of course, past experiences do not necessarily apply to the future. China's industrial upgrading so far, in addition to relying on continuous and large-scale R & D investment, the grasp and utilization of the advantages of latecomers are also indispensable. With the rapid development of China's economy, China has rapidly approached the forefront of global technological innovation, so from now on, China is actually in such a critical state of choosing one or the other, that is, either to fully achieve "curve overtaking" in the field of technological innovation, or to fall into the "middle-income trap".
Obviously, China is unlikely to accept the latter fate, which requires China to pay more attention to output to R&D efficiency when R&D investment has reached a high or even very high level (R&D investment intensity has exceeded the 15 start-up countries in the European Union). Because whether it is from the perspective of the vertical development law of innovation activities or from the horizontal comparison with advanced countries, China has a lot of potential in this regard.
However, the improvement of R&D efficiency is much more complicated than simply additional investment. The achievement of this goal involves sensitive variables in policy, taxation, finance, law, personnel, degree of marketization, entrepreneurship and other aspects. These variables interact and cycle back and forth, for example, in the composition of China's R&D investment, the proportion from the government is significantly too high, and this relatively single input structure may further squeeze out the private sector's R&D investment, but it is itself, it is indeed a passive choice in the case of insufficient private sector investment. To get out of this almost everywhere cycle, it is necessary to comprehensively examine and improve the variables involved in innovation based on the perspective of the ecosystem, so as to maximize synergy and improve innovation efficiency.