According to the Organization for Economic Co-operation and Development (OECD), China took over Japan to place second behind the United States in terms of research and development (R&D) spending in 2006. In the last 10 years, China has reported a 100 percent increase in R&D spending as a percentage of GDP. It applied for the fifth highest number of patents globally, overtaking Germany. Given this, can we now replace the phrase "Made in China" with "Created in China"? Professor Zhou Shaopeng, director and doctoral advisor of the Department of Economics at the China National School of Administration was interviewed for his thoughts.

It takes time to change

Q: Has China completed the transition from "Made in China" to "Created in China"?

Zhou Shaopeng: "Made in China" refers to products produced in the country �C for example, products produced in factories set up by multinational companies in China. In these cases, the Chinese do not necessarily have the intellectual property rights to the products. "Created in China" refers to products actually invented in China, for example, national brands which have developed their own products. The change from "Made in China" to "Created in China" is one of the important goals of the 11th Five-Year Plan. In recent years, China has taken important steps in independent innovation. But we can't say that we've completed the transition. To reach this target, we should not only increase investment but endeavor to guarantee institutional mechanisms and personnel support in this field.

Given this, we still need time to complete the transition. China still faces many challenges in this regard. It has not yet reached the target of investing 1.5 percent of GDP in technology; China's scientific and technological input growth lags behind technological development; compared to the United States, Japan and other developed countries whose dependency rate on foreign technology is only around 5%, China's dependency rate on foreign technology is as high as 50%; much innovative technology and many innovative products from China lack a favorable policy environment (even some government departments select foreign products only); there is a lack of high-level creative talent, and many other challenges.

Promoting independent innovation

Q: Why is enhancing our capability for independent innovation necessary to realize "Created in China"?

Zhou Shaopeng: To realize "Created in China", China must strengthen its independent innovation capability. Innovation methods can be divided into original innovation, integrated innovation and re-innovation after introducing and absorbing. Different enterprises in different areas should adopt different forms of innovation. Important technology for national security is difficult to import, so we need to promote innovation, strive to make breakthroughs in basic theory and key technologies, and speed up the process of converting scientific and technological achievements into actual products and practical technologies. In industries with scale advantages and market potential, we must uphold the principle of local-oriented and effective integration of domestic and foreign technological resources. In industries which are far less developed than in foreign countries, there is great potential for introducing advanced foreign technology. We should absorb and re-innovate as soon as possible after introducing technology from abroad.

Innovation takes place at two levels, national and enterprise. However, enterprise is the main force in independent innovation. The government should provide necessary human, material, financial and technical resources to enterprises and allow them to take the lead in innovation.

System and mechanism guarantees essential

Q: What should we do to achieve the goal of "Created in China"?

Zhou Shaopeng: Systems and mechanisms are critical in ensuring a smooth transition.

Firstly, China needs to accelerate the establishment of an enterprise and market-oriented technological innovation system which combines manufacturing, studying and research as a whole.

Secondly, the country needs to improve the market environment for technical innovation, accelerate the development of entrepreneurial risk investment, and improve technical advice, technology transfer and other intermediary services.

Thirdly, favorable fiscal and tax, financial and government procurement policies supporting independent innovation should be implemented.

Fourthly, it is necessary to make good use of global scientific and technological resources, continue to introduce advanced technology from foreign countries, and participate in international scientific and technological exchanges.

Finally, efforts should be made to strengthen the protection of intellectual property. Ineffective protection of intellectual property rights is having a major effect on technological innovation. China's intellectual property protection system is not yet perfect. The nation, society and enterprises need to work together.

Enterprises the most important force

Q: As the driving forces behind "Created in China", in your opinion, what kind of things do enterprises still need to do?

Zhou Shaopeng: Enterprises are the most important forces in realizing "Created in China", and to expand their role even further, must do the following:

First, they must endeavor to realize sustainable development by increasing awareness of independent innovation and accelerating innovative and technological progress. Some enterprises don't prioritize independent innovation and rely on other's technology. This is not conducive to the sustainable development of enterprises. Some do not manage funds well, either investing too heavily in research and development, thereby affecting everyday production, or not investing enough or at all. Businesses should gradually increase expenditure on research and development while ensuring that normal production and operation continues.

Secondly, enterprises must identify the right fields in which to invest in R&D. The aim of R&D is to develop new products, so enterprises should focus their energies according to market demand.

Thirdly, efforts should be made to establish and improve the system of independent innovation and the skills of technical personnel. Enterprises should establish a specialized innovative system to ensure sustainable activity and smooth away any problems that may interrupt this.

Fourthly, a sound mechanism to stimulate technological innovation should be set up. Enterprises should offer incentives to people who have made a significant contribution and stimulated the creative passion of the staff.

By People's Daily Online