Science and technology development

China: Innovator or Follower?

Written by Richard P. Appelbaum.

In 2006, continuing its effort to achieve world-class status as an S&T innovator, the Chinese government launched its National Medium- and Long-Term Plan (MLP) for the Development of Science and Technology 2006-2020, making “indigenous innovation” its top developmental priority. China’s emphasis on indigenous innovation positions the Chinese state as a key driver of economic development. This represents a strong form of industrial policy,[i] in which key areas of basic science, applied engineering, and industrial sectors are targeted for public investment at all governmental levels. The intention is to wean China from its dependence on foreign technologies, enabling domestic advances in science and technology to drive product innovation – to move China from imitation to innovation. The hope is to transform China into a technology-focused economy by 2020, and a global leader in R&D, science, and product innovation by 2050.  Key thrusts include significantly increased public investment in basic research as well as applied R&D, building science parks and research centers, funding focused venture capital funds, and recruiting prominent expatriate scientists and entrepreneurs from universities and businesses abroad through such initiatives as the Thousand Talents Program and the Thousand Young Talents Program.[ii]

The MLP’s effort to foster indigenous innovation is reinforced by China’s 11th and 12th Five Year Plans, which – in an effort to buttress the transition from “made in China” to “designed in China” – identify a number of “strategic emerging enterprises” such as biotech and new materials,[iii] and increase the percentage of GDP that is invested in research.[iv] While U.S. expenditures on scientific research and development remain the world’s highest ($465 billion in 2014, roughly 2.8 percent of GDP), the gap with China is quickly closing. China doubled its R&D spending between 2008 and 2012 (Tozzi, 2014), reaching $284 billion (adjusted for differences in purchasing power) in 2014, or 2.0 percent of its GDP – and increasing to 2.2 percent in 2015, overtaking the U.S. by 2022, if current trends continue (Battelle, 2013).  The 12th Five Year Plan, in comparison with the 11th, lowers annual growth targets (from 7.5 percent to 7.0 percent), reflecting a greater emphasis on more sustainable development, and places “greater emphasis upon economic development versus simply growth, scientific education… improving overall welfare [and] expanding domestic demand” (Casey and Koleski, 2011: 2; see also KMPG, 2011).

Nanotechnology provides an interesting case study of a rapidly growing emerging technology, one in which China’s advances are in part the result of cross-border collaborations, ranging from basic research to innovative startups.

China has been the rising star when it comes to journal publications. In 2006, China accounted for nearly 20% of nanotechnology publications, just behind the U.S. (24%) and the European Union (31%) (Youtie, Shapira, and Porter, 2008). China surpassed the U.S. in total publication output of nanotechnology research in 2009 (Kostoff, 2012), although when research quality (as measured by citation counts) is taken into consideration, the U.S. consistently has the highest number of cumulative citations, while China falls to roughly fifth place, behind the U.S., European Union, Japan, and Germany (Youtie, Shapira, and Porter, 2008). International collaboration (the U.S. is China’s leading collaborator) has been an important driver of Chinese success in publishing nanotech research results, even though they only account for 17 percent of Chinese nanotechnology publications (Tang and Shapira, 2011a).

Our own research on Chinese nanotechnology commercialization found that nano-related start-ups usually got their initial technology from domestic or foreign universities and research institutes.  Among the eleven startup nanotech companies in Suzhou Industrial Park that we interviewed, for example, six were started by Chinese returnees, based on technology they had developed abroad (Cao, Appelbaum, and Parker, 2013; Appelbaum, Gebbie, Han, and Stocking, 2014).  The role played by Chinese returnees (scientists, entrepreneurs, venture capitalists) is highly significant: they bring knowledge, experience, money, and more importantly, network and vision to the game.

China has been especially aggressive in what has been termed “the global war for top talent” (Wang, Tang, and Li., 2014), actively seeking to repatriate leading Chinese scientists who are studying or working abroad. Nearly 275,000 Chinese students were enrolled in U.S. colleges and universities during the 2013/14 academic year, a 17% increase over the previous year.  In 2013/14, students from China accounted for 31% of all international students studying in the U.S.[v] Forty-four percent were enrolled in graduate programs (IIE, 2013). It is estimated that 72% of the approximately 820,000 Chinese who studied abroad between 1978 and 2011 returned home (WantChinaTimes, 2012).

Will China’s state-driven efforts succeed? At first glance, the results of China’s efforts are impressive. As we have seen, the MLP has resulted in the construction of numerous high-tech science parks,[vi] a dramatic increase in scientific publications by Chinese authors,[vii] and a substantial increase in the number of patents obtained by Chinese scientists and engineers.[viii] Yet China’s investment in research and development has yet to pay off in product innovation: “research is high and the market is far away” (Cao, Appelbaum, and Parker, 2013; see also Appelbaum & Parker, 2008; Parker, Ridge, Cao, Appelbaum, 2009; Simon & Cao, 2009).  Despite some impressive achievements and some recent changes,[ix] China’s S&T system remains in need of significant reform. One hope is that foreign study and collaboration will help to speed that process (Cao, Appelbaum, and Parker, 2013).[x]

Chinese firms currently excel in re-engineering and improving existing products, but remain limited in their ability to innovate new products. Paradoxically, this is the result of the Chinese government’s extensive involvement in supporting science and technology. While on the one hand government programs have resulted in many advances, on the other hand they have created many problems as well.  China’s approach to central planning, such as the Medium- and Long-Term Plan mentioned above, often results in an ever-changing set of policies and goals that are supposed to drive local efforts.  Yet at the same time, local governments are under enormous pressure from the central government to show success. The result is that local governments adopt low-risk strategies that emphasize small short-term gains rather than higher-risk (and longer-term) technological breakthroughs (Breznitz and Murphree (2011).

If the Xi government hopes to realize the “Chinese dream…the great revival of the Chinese nation” (Wong, 2012), it will have to move away from a reliance on second-tier innovations in S&T, however commercially successful they might be. Basic research in China may be increasingly world-class, but bringing innovative products to markets has proven to be more challenging (Simon and Cao, 2009; Cao, Appelbaum, and Parker, 2013). The jury is still out on whether China can overcome its obstacles and emerge as a true innovator on the global stage.

Richard P. Appelbaum, Ph.D., is Research Professor and MacArthur Chair in Global and International Studies and Sociology at the University of California at Santa Barbara, and co-PI at the NSF-funded Center for Nanotechnology in Society. Image credit: CC by Transguyjay/Flickr. This is an abbreviated version of a longer paper. Read the full version including a bibliography of works cited here.


[i] A report commissioned by the U.S. Chamber of Commerce, entitled China’s Drive for Indigenous Innovation: A Web of Industrial Policies, regards the MLP as a “a blueprint for technology theft on a scale the world has never seen before” (McGregor, 2010, p. 4).
[ii] The MLP aims to increase the competitiveness and competencies of Chinese companies through more controversial economic tactics as well – for example, the forced transfer of foreign technologies to Chinese companies in exchange for access to Chinese markets (McGregor, 2010a, 2012).
[iii] The MLP identified, nanotechnology – a key approach to developing new materials – as one of four Science Megaprojects slated for state funding.
[iv] The plans also call for increased emphasis on consumption-led growth (as opposed to continued reliance on high levels of public investment), green development (reducing carbon emissions per unit of GDP), and – ominously, in view of the U.S. Chamber of Commerce – industrial upgrading through “re-innovation” of foreign technology.
[v] The Chinese scientific diaspora is currently estimated at 400,000 (Schiermeier, 2014).
[vi] China’s Ministry of Science and Technology (MoST), Department of International Cooperation (CISTC), lists 48 science parks on its website; UNESCO lists 80, compared with 22 for Japan and 72 for the United States.
[vii] China ranked second to the U.S. in number of scholarly publications in 2010 (Zhang, Patton, & Kenney, 2013), although the quality of Chinese (as measured by impact) is another matter (see, for example, Tang, Shapira, and Youtie, 2014, regarding the “clubbing effect” on Chinese citations).
[viii] China’s State Intellectual Property Office (SIPO), now the world’s largest, received 526,412 invention patent applications in 2011, 23,000 more than USPTO, while granting 172,113 invention patents (USPTO granted 224,505) (China Daily 2013).
[ix] In November 2012 the 18th National Congress of the Chinese Communist Party called for greater clarity, accountability, and transparency in national R&D programs, and created a “New Leading Group of State Scientific and Technological Reform and Innovation System Construction” to oversee the process. For greater detail see Cao, Li, Li, and Liu, 2013; MoST 2012).
[x] In a highly controversial (in China) interview in Science, two prominent returnees (Shi Yigong, Life Science Dean at Tsinghua University, and Yi Rao, Life Science Dean at Peking University) argued that personal connections with government bureaucrats shaped large-scale funding, to the detriment of scientific achievement. They called for a funding system based on merit, rather than personal connections (Shi and Li, 2010). The Ministry of Science and Technology (MoST) was quick to respond, denying the claims by pointing to recent advances in Chinese S&T (Xin, 2010).


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