New Technologies Foster Strong Economy

By staff reporter HOU RUILI

Economic globalization has entered a new stage of development since the international financial crisis. The emphasis having shifted from manufacturing to innovation, the latter attracts unprecedented volumes of capital and other resources. To keep up with this trend, China’s sci-tech companies are stepping up independent innovation rather than replicating or borrowing other countries’ technologies.

Since the year 2000, China has become the No.1 destination for Silicon Valley venture capital. For the four successive years from 2008 to 2011, newly listed companies based in Beijing’s Zhongguancun, a hi-tech company enclave, have outnumbered those in Silicon Valley. So far, more than 200 Chinese companies are listed on the Nasdaq, more than any country other than the U.S. This signifies China’s progress in new and high technologies.

Statistics from the 2014 national meeting on science and technology show that China’s new and hi-tech industry revenues topped RMB 11 trillion in 2013, up 10 percent year-on-year. In 2012, the contribution rate of China’s sci-tech progress to GDP growth was 52.2 percent, according to the National Innovation Index 2013. Thanks to the agglomeration effects of the country’s industrial parks and preferential policies on new and hi-tech industries, the latest scientific research achievements now travel directly from laboratory to factory. Last year the 60,000 or so tech companies in China’s 105 national new and hi-tech zones scored RMB 19.5 trillion in revenues, an 18 percent gain over 2012. And of the 355 companies that have entered Growth Enterprises Market IPO, 93 percent are in the new and hi-tech field.

Hi-tech Fuels Growth

Since downloading a positioning app on his mobile phone, Ma Tianyi can easily locate a parking space in any labyrinthine underground parking garage, go directly to the desired stand at a large exhibition, and navigate his way to the right conference room in a big hotel without asking the way. This app, based on the Xihe system, is capable of almost pinpoint accuracy. Its integrated technology receives and sends signals from all four major navigation satellite systems – China’s Beidou, the U.S. Global Positioning System, Russia’s GLONASS, and the EU’s Galileo. An alliance of 20 or more telecom companies, including Nokia and Samsung, made it available to mobile phone users last year.

The Zhongguancun – China’s Silicon Valley – stand at the 2013 China Beijing International High-Tech Expo.

The Xihe system thus extends the application and commercial use of the Beidou Navigation Satellite System, funded by the so-called 863 Program, or National High Technology Research and Development Program. Beidou renders China the third country in the world after the U.S. and Russia with its own navigation satellite system. It can provide services in multiple fields, ranging from mapping, telecommunications, water conservancy, fishery, transportation, forest fire-fighting and disaster relief to public security. Its remarkable effects were apparent during the 2008 Beijing Olympic Games and in the rescue efforts after the disastrous Wen-chuan earthquake.

“Combining indoor and outdoor location-based service (LBS) is a challenging task worldwide. China is globally advanced in this area,” head of GNSS Research Center of Wuhan University Shi Chuang said.

Shi applauds the system for expanding the range and depth of navigation technology applications and meanwhile creating a new market. “By 2015, Xihe will be in operation in 10 Chinese cities, so providing location-based services for transport, agriculture, land and ocean monitoring, public security, and disaster aid, among other realms. This will generate a long industrial chain covering positioning chips, terminals, navigation software and services.” The market value of the country’s satellite navigation and positioning industry is poised to top RMB 225 billion by 2015 and RMB 400 billion by 2020, according to the GNSS & LBS Association of China.

China launched the 863 Program in 1986, one year after commencement of the U.S. Star Wars Program and Europe’s Eureka Project. Its mission is to develop pioneer technologies that will eventually go into mass use throughout Chinese industries.

With the backing of this scheme, a slew of technological innovations either on par with or approaching the world’s most advanced levels have been created. They include high-performance computers, mobile telecommunications, high-speed information network, deep sea robots, and industrial robots; also land and air observation systems, ocean observation and exploration, new-generation nuclear reactors, super hybrid rice, pest-resistant cotton, genetic engineering, biopharmacy, a Chinese-language information processing platform, intraocular lenses, and photoelectron materials and devices. All have generated immense social and economic benefits, and considerably advanced China’s new and hi-tech industries.

Hi-tech Industry Incubation

To transform hi-tech into productive forces China began, upon commencement of the 863 Program, to give preferential policy support to hi-tech enterprises and build for them a more favorable investment and financing environment. Various hi-tech zones have been established across the country, so amassing the talents, capital and technologies necessary to incubate hi-tech firms.

Beijing Sinovac Biotech Co., Ltd., founded in Beijing’s Zhongguancun Science and Technology Park with the help of RMB 50 million in government funding, has developed into a joint venture. Its annual profits now exceed RMB 100 million. In 1996, Yin Weidong, now general manager of Sinovac, initiated cooperation with the National Institute for the Control of Pharmaceutical and Biological Products (NICPBP) on developing a hepatitis A vaccine containing the inactivated Hepatitis A virus. The project was included in the national medical science program. In December 1999, the authorities authenticated the hepatitis A vaccine as a medical scientific research achievement. It accordingly obtained certification as a new drug, so filling a national blank. In 2001, in collaboration with Beijing Sinobioway Group Co., Ltd., Yin Weidong established Sinovac and introduced China’s first hepatitis A vaccine containing the inactivated hepatitis A virus. Soon afterwards, Sinovac developed the world’s first SARS vaccine under the same principle; also the world’s second combined hepatitis A and hepatitis B vaccine. Sinovac moreover produced avian influenza vaccine and regular influenza vaccine for human use, so getting in sync with the world. All these vaccines gained proprietary intellectual property rights. Listed on the U.S. securities market in September 2003, the young company officially transferred to the main board of the U.S. securities market in 2004. Today, the company has become a national demonstration program for hi-tech industrialization at the international GMP (Good Manufacturing Practice) level, and possesses a national GMP certificate.