New Technologies Foster Strong Economy

ECONOMIC globalization has entered a new stage of development since the international financial crisis. The emphasis having shifted from manufacturing to innovation， the latter attracts unprecedented volumes of capital and other resources. To keep up with this trend， Chinas sci-tech companies are stepping up independent innovation rather than replicating or borrowing other countries technologies.

Since the year 2000， China has become the No.1 destination for Silicon Valley venture capital. For the four successive years from 2008 to 2011， newly listed companies based in Beijings Zhongguancun， a hi-tech company enclave， have outnumbered those in Silicon Valley. So far， more than 200 Chinese companies are listed on the Nasdaq， more than any country other than the U.S. This signifies Chinas progress in new and high technologies.

Statistics from the 2014 national meeting on science and technology show that Chinas new and hi-tech industry revenues topped RMB 11 trillion in 2013， up 10 percent year-on-year. In 2012， the contribution rate of Chinas sci-tech progress to GDP growth was 52.2 percent， according to the National Innovation Index 2013. Thanks to the agglomeration effects of the countrys industrial parks and preferential policies on new and hi-tech industries， the latest scientific research achievements now travel directly from laboratory to factory. Last year the 60，000 or so tech companies in Chinas 105 national new and hi-tech zones scored RMB 19.5 trillion in revenues， an 18 percent gain over 2012. And of the 355 companies that have entered Growth Enterprises Market IPO， 93 percent are in the new and hi-tech field.

Hi-tech Fuels Growth

Since downloading a positioning app on his mobile phone， Ma Tianyi can easily locate a parking space in any labyrinthine underground parking garage， go directly to the desired stand at a large exhibition， and navigate his way to the right conference room in a big hotel without asking the way. This app， based on the Xihe system， is capable of almost pinpoint accuracy. Its integrated technology receives and sends signals from all four major navigation satellite systems – Chinas Beidou， the U.S. Global Positioning System， Russias GLONASS， and the EUs Galileo. An alliance of 20 or more telecom companies， including Nokia and Samsung， made it available to mobile phone users last year.

The Xihe system thus extends the application and commercial use of the Beidou Navigation Satellite System， funded by the so-called 863 Program， or National High Technology Research and Development Program. Beidou renders China the third country in the world after the U.S. and Russia with its own navigation satellite system. It can provide services in multiple fields， rang-ing from mapping， telecommunications， water conservancy， fishery， transportation， forest fire-fighting and disaster relief to public security. Its remarkable effects were apparent during the 2008 Beijing Olympic Games and in the rescue efforts after the disastrous Wenchuan earthquake.

“Combining indoor and outdoor location-based service （LBS） is a challenging task worldwide. China is globally advanced in this area，” head of GNSS Research Center of Wuhan University Shi Chuang said.

Shi applauds the system for expanding the range and depth of navigation technology applications and meanwhile creating a new market. “By 2015， Xihe will be in operation in 10 Chinese cities， so providing location-based services for transport， agriculture， land and ocean monitoring， public security， and disaster aid， among other realms. This will generate a long industrial chain covering positioning chips， terminals， navigation software and services.” The market value of the countrys satellite navigation and positioning industry is poised to top RMB 225 billion by 2015 and RMB 400 billion by 2020， according to the GNSS& LBS Association of China.

China launched the 863 Program in 1986， one year after commencement of the U.S. Star Wars Program and Eu- ropes Eureka Project. Its mission is to develop pioneer technologies that will eventually go into mass use throughout Chinese industries.

With the backing of this scheme， a slew of technological innovations either on par with or approaching the worlds most advanced levels have been created. They include high-performance computers， mobile telecommunications， high-speed information network， deep sea robots， and industrial robots； also land and air observation systems， ocean observation and exploration， new-generation nuclear reactors， super hybrid rice， pest-resistant cotton， genetic engineering， biopharmacy， a Chinese-language information processing platform， in- traocular lenses， and photoelectron materials and devices. All have generated immense social and economic benefits， and considerably advanced Chinas new and hi-tech industries.

Hi-tech Industry Incubation

To transform hi-tech into productive forces China began， upon commencement of the 863 Program， to give preferential policy support to hi-tech enterprises and build for them a more favorable investment and financing environment. Various hi-tech zones have been established across the country， so amassing the talents， capital and technologies necessary to incubate hi-tech firms.

Beijing Sinovac Biotech Co.， Ltd.， founded in Beijings Zhongguancun Science and Technology Park with the help of RMB 50 million in government funding， has developed into a joint venture. Its annual profits now exceed RMB 100 million. In 1996， Yin Weidong， now general manager of Sinovac， initiated cooperation with the National Institute for the Control of Pharmaceutical and Biological Products （NICPBP） on developing a hepatitis A vaccine containing the inactivated Hepatitis A virus. The project was included in the national medical science program. In December 1999， the authorities authenticated the hepatitis A vaccine as a medical scientific research achievement. It accordingly obtained certification as a new drug， so filling a national blank. In 2001， in collaboration with Beijing Sinobioway Group Co.， Ltd.， Yin Weidong established Sinovac and introduced Chinas first hepatitis A vaccine containing the inactivated hepatitis A virus. Soon afterwards， Sinovac developed the worlds first SARS vaccine under the same principle； also the worlds second combined hepatitis A and hepatitis B vaccine. Sinovac moreover produced avian influenza vaccine and regular influenza vaccine for human use， so getting in sync with the world. All these vaccines gained proprietary intellectual property rights. Listed on the U.S. securities market in September 2003， the young company officially transferred to the main board of the U.S. securities market in 2004. Today， the company has become a national demonstration program for hi-tech industrialization at the international GMP （Good Manufacturing Practice） level， and possesses a national GMP certificate.

The government has taken measures， through hi-tech business service centers and various types of hi-tech enterprise incubators， to establish technological innovation funds for small and mediumsized scientific and technological enterprises. Benefiting from favorable policies and environment， small and mediumsized private scientific and technological firms have hence proliferated. By the end of 2013， innovation funds from central finance amounting to RMB 26.736 billion had supported 300，000 small and medium-sized scientific and technological firms， so fostering around 45，000 projects.

Surveys show that private hi-tech firms account for more than 70 percent of companies in Chinas hi-tech zones. Since establishing their own R&D centers they have amassed high-caliber talents， including overseas returnees. Nowadays， private hi-tech firms are main promoters of Chinas hi-tech industrial development. R&D input from such private hi-tech companies accounts for more than half of local R&D investment in relatively developed regions like Beijing， Jiangsu and Shenzhen， and more than 90 percent of that in other regions. This high input has enabled certain Chinese hi-tech firms to find niches in the global market. Two examples are Zhongguancun-based Vimicro， which occupies more than 60 percent of the world market share for computer video processing ICs. Huawei， another world renowned private corporation headquartered in Shenzhen Hi-tech Zone， is one of the worlds major suppliers of communications equipment.

Whats more， there is now a legion of entities committed to transforming scientific achievements into products. They include 94 university science parks， 2，281 productivity promotion centers， 20，000 technological transaction and service institutions， and 83 innovation stations， as well as various trade fairs and online trading platforms. All are dedicated to helping companies utilize the information resources of colleges and scientific research institutions to transform scientific achievements into technological products.

The 16th China Beijing International High-Tech Expo， held in May 2013， showcased the latest scientific and technological innovations and breakthroughs. Its aim was to promote cooperation in the transformation of scientific achievements and major industrial projects. The expo polarized both domestic and international attention in the field. Attendees included 40-plus overseas delegations， 35 domestic delegations and representatives of more than 2，000 local scientific research institutions， universities and enterprises. The value of the 123 agreements reached on construction of science and technology industrial bases， technical cooperation and trade totaled RMB 86.023 billion. The main targets for cooperation were projects involving strategic emerging industries， including new-generation information technology， energy conservation and environmental protection， new energy， and bio-industry. There was also much jockeying for cooperation in the auxiliary programs of scientific and technological industrial parks and bases. Transfer transactions on technical achievements and cooperation in technological exchanges produced 45 agreements， accounting for 36.6 percent of total cooperation agreements.

Potential for Technological Application

In the context of national economic transformation and upgrading， Chinas scientific and technical companies have extensive scope for development in key and emerging fields.

Competitive companies have formulated international industrial technology standards which they promote for international commercial use.

In 2013， TD-LTE technical standards– 4G mobile communication technology– went into commercial use. As owner of the proprietary intellectual property rights， China mainly sets the technical standard. At present， 23 TD-LTE commercial-use networks are operating in 18 countries around the world. In February 2011， China Mobile， jointly with six other international carriers， set up the Global TD-LTE Initiative （GTI）. The GTI has become an important platform for cooperation organizations and operators that comprise 80 members and 63 partners. In 2013， China invested RMB 160 million in launching R&D for 5G mobile communication technology.

During the 1G network era of 2009， Chinas communication devices were completely dependent on imports. When the 2G network came along， China was still a rookie in mobile communication core technology. But by the time the 3G network came into operation China had developed TD-SCDMA technology with independent intellectual property rights， so forming a tripartite confrontation with WCDMA and CDMA2000. As TDLTE is now one of the two international 4G network standards， China is clearly at pace with the world.

The leapfrog development of core technology has brought business opportunities to numerous domestic mobile operators. Founded in 2010， Xiaomi is a mobile Internet company dedicated to creating an all-encompassing user experience. When the company released its first smartphone， the Mione 1S， the first 200，000 sold out instantly， having generated more than 1.2 million orders. Judging from the development trend， China looks set to become a Mobile Internet empire， according to Xiaomi founder， chairman and CEO Lei Jun.

Beijings Zhongguancun Science Park owns 86 international standards led or participated in by science and technology enterprises such as Lenovo and Sinovac. High-tech zones in other areas of China also possess a number of international standards， such as TD-SCDMA， optical communication techniques， industrial control technology， laser gas analytical instruments， OLED display techniques， and radio frequency coaxial connectors. These international standards guide industrial development and enhance the speaking rights of Chinese enterprises within international competition.

The two Chinese-made automobile production lines in Detroit， the Motor City， are now manufacturing the bestselling Ford Motor models. But little more than 10 years ago， Chinas main automotive production equipment depended largely on imports.

In the past decade， Chinas equipment manufacturing industry has maintained annual growth of 25 percent. It has also made various technical breakthroughs. They include the “Tianhe-1” one of the worlds few Petascale supercomputers， a train capable of travelling at 486.1 km per hour， the worlds first high- performance DC inverter centrifugal， a 5MW permanent magnetic direct drive offshore wind turbine generator system， an all-steel radial tire one-step molding machine， a 7，500-ton full-circle slewing floating crane， a large-scale tunnel boring machine， and IC manufacturing equipment， to name but a few.

Since 2009， Chinas gross output of equipment manufacturing has surpassed that of the U.S. China is now the worlds first manufacturing power. This， however， is only part of the story. “At present， Chinas equipment manufacturing industrys dependence on foreign technologies is more than 50 percent. It is even higher in some sectors – 80 percent in high-end chip， 80 percent in high-quality heavy casting and forging of power generation assembly， 90 percent in top-grade numerically-controlled machine tools and robots， and almost 100 percent in high-speed rail bearings，” vice president of China Academy of Machinery Science & Technology Qu Xianming said. China， as an equipment manufacturing power， has extensive development space in enterprise and international cooperation.

As China pays equal attention to ecological health as it does to economic development， the energy conservation and environmental protection industry is proliferating. Chinas environmental protection industry comprises around 24，000 organizations， 400 of them listed companies， according to a joint survey by the Ministry of Environmental Protection， the National Development and Reform Commission and the National Bu- reau of Statistics. Their combined annual revenue is around RMB three trillion.

Developing new energy vehicles is part of the national plan to control air pollution. China hence looks to become the most important and competitive electric vehicle market. China will maintain its fiscal subsidies to support new energy vehicles. It will also enlarge the scope of cities and vehicle models receiving the subsidy， according to a development plan released in September 2013. From 2013 to 2015， China will popularize at least 10，000 green cars in megalopolises and key areas， and 5，000 cars in other cities and regions. Chinas research and development of new energy automobiles has reached an internationally advanced level. The country has also established perfect technical standards and detection systems， with a commercial demonstration scale that leads the world. China ranked a global third from 2005 to 2012 in its patent applications for clean energy vehicles. This was a level equal to that of Germany and South Korea， and accounted for eight percent of patent applications throughout the world.

In preparation for an era that is becoming increasingly digitalized， intelligent and personalized， a cloud computing base has been built in Guian New District of Guizhou Province. It is expected to advance construction of a cloud computing and big data service platform oriented towards the government， the public and companies. Big data has become an emerging strategic technology in China， according to Minister of Industry and Information Technology Miao Wei. “It is a new trend since the application of Internet， cloud computing and mobile Internet. China is now ready to facilitate development of the big data industry，” Miao said.

At the Big Data Day forum last December in Zhongguancun， Chinas innovation hub， Skycloud CEO Lei Tao commented that big data has become a part of infrastructure. It is now fundamental practice for companies to complete a full IT application， explore the value of business data and foster competitive innovations. Meanwhile， big data influences every aspect of the life and work of the common people.