New zones to boost innovation

More cities given green light to set up areas to propel extra creativity in output

Four more cities have been added to the list of national self-independent innovation demonstration zones by the State Council, China's Cabinet, in a move to further promote innovation-driven development.

The latest additions were the high-tech industrial development zones in the cities of Lanzhou and Baiyin in Gansu province, and Ningbo and Wenzhou in Zhejiang province, according to two State Council notices released earlier this month.

These zones will be given preferential policies and will take a leading role in fields such as technology transfers, share option incentive schemes and technological financing, the notices said.

So far, the country has 19 such zones and experts said the number will further increase to push forward innovation-driven strategy.

In March 2009, the State Council approved Beijing's high-tech hub Zhongguancun to be the country's first pilot national innovation demonstration zone, which was to advance independent innovations, boost competitiveness and enhance the role of high-tech industries.

As of the end of last year, the central government agreed to establish 17 such demonstration zones across the country, including ones in Shanghai, Wuhan in Hubei province, Shenzhen in Guangdong province, Tianjin, the Changsha-Zhuzhou-Xiangtan Independent Innovation Demonstration Zone in Hunan province, and the Sunan Independent Innovation Demonstration Zone in Jiangsu province.

According to the China Association of Development Zones, hundreds of development zones have been set up to attract investment and boost technological progress, including the 19 demonstration zones.

Lin Muxi, a professor in economics at Liaoning University, said the demonstration zones can promote regional economical development as more resources will be clustered in such zones to pave the way for innovations and transform technological achievements into products.

Demonstration zones are vital carriers for the country to implement innovation-driven strategy, which is now a priority for local governments to increase economic growth and higher-quality development, said Liu Xiangdong, a researcher at the China Center for International Economic Exchanges.

The notices will encourage innovations and entrepreneurship in the four cities, Liu said. In Zhejiang, the private sector is booming and the demonstration zone will highlight the role of private businesses in making innovations and starting up new businesses, he said.

Gansu will focus on technological innovation in boosting economic development in less-developed regions, especially in the western part of the country, Liu said.

The world is undergoing dramatic changes as new technologies emerge faster than before in areas such as artificial intelligence, new energy and deep space. China cannot wait and must promote innovations and entrepreneurship, said Gao Zhikai, a senior researcher at the Center for China and Globalization.

Gao said development zones, including these demonstration zones, have been a vital way to attract foreign investment and learn about advanced technologies as the country opened up to the outside world over the past 40 years. Now China's economic transformation requires more self-developed technologies, especially in the manufacturing sector, he said.

Gao also said these zones should be based on local conditions in the two provinces. Gansu has rich mineral resources and is a vital point for the Belt and Road Initiative to connect eastern parts of China with Central Asia and Europe. So innovation zones can help the region to learn from more developed East China to make better use of its resource and geographic advantages, he said.

By contrast, in the past 40 years, thousands of small and medium-sized enterprises have grown in the manufacturing sector in Zhejiang and innovation is in urgent demand to take larger share of the world market.

"In the global market, China is stepping toward an economy featuring high end manufacturing, original innovation and renowned branding," Gao said. "The establishment of the innovation demonstration zone in the East China province will boost the development of SMEs across the country when more breakthroughs can be made in the zone."

Demonstration zones should make full use of their advantages to cultivate special brands and technologies, which then can be promoted in the global market, Gao said. "In the future, a larger number of such demonstration zones are expected to be announced," he added.