Meeting the challenge to compete

China is famous for producing large quantities of technological essays every year, but these essays are hardly of any use. Being run like government agencies, China's universities and research institutions judge researchers' performance by the quantity of essays they publish, compelling them to produce essays as if on a production line. It is hard to imagine such academic rubbish will lead to technological innovations - surveys show that the contribution of technological advance to China's economic growth is 29 percent, while it is around 60 to 80 percent in developed countries.

No doubt China cannot challenge developed countries' monopoly on core technologies; data show that the US, the EU and Japan own 95 percent of all patents in biological engineering and medicine, while high-income countries get 98 percent of all the income from global technology transfer. China's degree of technological dependence is 50 percent while for the US and Japan is 2 to 5 percent. China even has to import core parts for producing a cellphone or a TV set.

The value of China's high-tech industry reached $1,368.6 billion in 2011, ranking first globally; but it had only 891 patents that year, or 1.36 percent of the world's total. That sums up China's position in technological innovation.

What are the root causes for this? There are several besides the above-mentioned insufficient funding and imbalances between eastern and western provinces. For example, China is restricted by its technology management system, which follows an outdated model that does not encourage its researchers to fulfill their potential.

Lack of IPR protection is another factor that curbs China's innovation efforts. In 2012, only 2,000 Chinese enterprises, or 0.03 percent of the total, owned independent intellectual property rights, while 99 percent of all enterprises have never successfully applied for a patent.

At the same time, China lags far behind in legislating for innovations; its current Scientific and Technological Progress Law, adopted in 1993, is inadequate, and its financing sector lacks coordination with innovation too.

It is all these factors together that restrict China's technological innovation. If China hopes to realize the goal of an innovation-driven strategy it must address these issues hindering its technological progress and introduce new mechanisms to better serve this end.

The author is a professor of economics from Fujian Normal University. The Chinese text of this piece appeared in Study Times.