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Chen Chenchen: Innovation-driven development breaks new ground for economy

2016-12-21

By Chen Chenchen    Source: CRI    Published: 2016-12-21


The Central Economic Work Conference has been held in Beijing in mid-December, mapping out plans for China`s economic development in 2017. It is stressed that China should continue innovation-driven development strategy to promote supply side structural reform and accelerate transformation of Chinese economy.


China has been a big beneficiary of innovation. The grand strategy of reform and opening-up has served as a solid engine for the country`s colossal development in the past four decades. Behind this is the insight in choosing an innovative path for national growth. Nonetheless, further reform and opening-up call for comprehensive social innovation.


In this sense, China`s transformation toward modern civilization and modern economic growth is still a long and arduous journey. As a manufacturing giant, China still faces criticism of lacking innovation. The Chinese society has to walk out of conservativeness typical in the era of agricultural civilization, and to allow innovation to permeate through its macro- and micro-level progress.


China`s top decision-makers have realized the urgency of boosting innovation. The greater China`s economic size becomes, the less time left for transformation toward innovation-driven development. In fact, innovation is the first among the Five Major Development Concepts passed at the Fifth Plenary Session of 18th CPC Central Committee in 2015. Xi Jinping, General Secretary of CPC Central Committee, has emphasized taking action on innovation and building China into a leading power in science and technology by the middle of this century.


Noticeably, since the 18th CPC National Congress China has witnessed accomplishments in innovation-driven development. China has 147 national high-tech zones by 2015, more than 80 percent of which have established mechanisms of guiding investments for start-ups. China`s big data industry has also seen explosive growth. Its market size reached 110.5 billion yuan ($15.9 billion), up 44 percent compared with previous year. Fostering new industries, new technologies and new types of business has become a highlight in Chinese economic growth.


In 2017, new stimulus will be given to innovation-driven development, which will guide China`s economic structural reform and social transformation. Under this guideline, further actions will be needed in following major tasks.


First, further macro-level institutional reforms are needed to remove obstacles for innovation. Building service-oriented government is at the core of boosting marketing economy. As China is at an important juncture of industrial upgrading, the government needs to adopt more administrative measures to build intellectual property protection mechanisms, improve resource allocation, and increase policies that stimulate innovation incentives.  


As the latest Central Work Economic Conference has stressed, the government should help build a legal and fair environment for market operation, and create conditions in terms of market access and resource allocation for fairer market competition.


Second, micro economic level changes are needed to energize the innovation engine. Micro-level innovative reforms have been key to China`s reform and opening-up in the past four decades. At the moment, releasing vigor of enterprises is very important for supply side reform. Enterprises should take their own initiatives. For instance, state-owned enterprises need to come up with specific reform plans based on their own situation, and public institutions need to accelerate resuming their role as suppliers of public services.


Third, upgrading of traditional industries and fostering of emerging ones should be boosted simultaneously to reinforce social atmosphere of innovation. Internet is a key battlefield for innovation, and it is a place where social atmosphere of innovation quickly spreads. As China is at a key period in which transborder e-commerce and Internet-related business grow rapidly, related enterprises need to further improve their produce quality and competitiveness through innovation, so us to further upgrade social consumption chains.


Simultaneously, traditional industries also need to use new technologies and new types of business to launch reforms, and gradually find unique advantages.


Last but not least, China needs to play a greater role of China in constructing innovative world economy.


Current world economy is featured by slow growth, low inflation, high risks and big bubbles. Though the platform of G20, global leaders have achieved consensus on building innovative, open, interconnected and tolerant world economy.


China has the world`s most comprehensive industrial systems, and greatest efficiency in social mobilization, and it should have the vision and potential to play a leading role in global innovation. China should seize the historical opportunity of new technological and industrial revolution and gather the world`s innovation policy forces, so as to bring about revolutionary changes to production and living styles of the human kind. This, in turn, would facilitate the nation`s domestic innovation-drive development.


The author is a research fellow with Chongyang Institute for Financial Studies at Renmin University of China.


Key Words: innovation   economy   China   Chen Chenchen  

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