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Issue 29, December 2010

This newsletter is a monthly supplement to ChinaAnalysis.Com, a new website that aims to promote knowledge sharing in China-related analysis. This newsletter contains original content and may not be reproduced without exclusive written permission. If you have any questions, comments and suggestions, please email support@chinaanalysis.com.

ChinaCompass - Chinese Five-Year Plans and Technology Policies

Planning is a key characteristic of China’s economic and social development. The Five-Year Plans of China aim to map strategies for future development, set targets, and arrange key national projects. The Plans are one of the few must-read documents for people studying China, including its technology policies.

In 1953, four years after the formation of the People’s Republic of China, the Communist Party of China (CPC) implemented its 1st five-year plan (1953-1957). By following the Soviet model and with aid from the Soviet Union, by the late 1950s China made substantial progress in fields such as electric power, steel production, basic chemicals, and machine tools, as well as in production of military equipment such as artillery, tanks, and jet aircraft.

The 2nd Five-Year Plan (1958-1962) aimed to expedite the country’s industrialization with an emphasis on heavy industry. The plan evolved with the Great Leap Forward (1958–60), which made aggressive efforts to reassign scientists to immediately useful projects, to involve the uneducated masses in research work, and to expand rapidly the ranks of scientific and technical personnel by lowering professional standards. The economic depression following the Great Leap Forward and the need to make up for the sudden withdrawal of Soviet technical personnel in 1960 brought a renewed but short-lived emphasis on expertise and professional standards in the early 1960s, and a period of economic adjustment between 1963 and 1965, which was not covered by any Five-Year Plan.

The 3rd and 4th Plans (1966 – 1975) covered the turbulent period of the Cultural Revolution. These two plans asked the nation to prioritize the defense industry in consideration of a possible major war, build the country's economy on self-reliance, and speed up construction along the nation's three most important frontlines (referring to national defense, science and technology, and industrial and transportation infrastructure). Although the country made historic achievements in nuclear weapons, missiles and satellites, the Cultural Revolution eradicated distinctions between scientists and other types of labor, denying an entire generation access to university and professional training.

The 5th Plan (1976-1980) was initially developed before Mao's death. After Mao's death, the CPC put forward new principles of readjustment, reform, rectification and improvement, and started the job of resuscitating the economy. The 6th Plan (1981-1985) continued to enforce those principles, and, led by Deng Xiaoping, implemented the policy of opening up to the outside world. The policy was exemplified in science and technology policies, such as participating in international conferences, cooperating in projects with foreign scientists, and sending Chinese graduate students and senior researchers to foreign universities. In 1985, the CPC called for sweeping reforms of the science and research system by changing the method of funding research institutes, encouraging the commercialization of technology and the development of technology markets, and increasing the rewards for individual scientists.

The 7th Plan (1986-1990), again, spared no effort to enhance technological improvement. China's initiatives to commercialize scientific and technical knowledge expanded rapidly amid considerable confusion, ferment, and turmoil. In 1986, the "National Hi-tech Research and Development Program" (863 Program) was launched, setting 20 goals in biology, spaceflight, information technology, among others. In the same year, the National Natural Science Foundation was established, explicitly modeled after the United States National Science Foundation. In 1987, the State Council announced that the majority of the applied scientific research institutes were to be incorporated into large and medium-sized enterprises to coordinate research with the needs of production. In 1988, the Torch Program was implemented, establishing nationwide a series of 53 high-tech development zones paired with business incubators.

During the 8th and 9th Plans (1991-2000), China's modernization reforms reached a new stage, with emphasis on speeding up the establishment of a modern enterprise system. As result of these reforms, most Chinese scientific institutions have been encouraged to commercialize their research, and an increasing number of Chinese scientists have begun to go into business.

During the 10th and 11th Plans (2001-2010), economic structural adjustments were emphasized to optimize and upgrade industrial structures, adopt best-practice to invigorate China through science and education, and strengthen the global competitiveness of Chinese firms. Establishing export bases for new and high-tech products in selected high-tech industrial development zones became an important part of the government's plan. Many high-tech projects were planned in the period. In the 11th Plan, the CPC called for stepping up the development of manufacturing industry and leveraging new technologies to develop China's indigenous brands with proprietary intellectual property rights. The CPC also issued the Sci-Tech Development Guidelines, which gave priority to technological development in 11 major sectors and encouraged innovation that would raise the country's competitiveness across the entire range of industries. Moreover, the government adopted preferential banking policies for promoting innovation and business start-ups, and pushed forward the building of a secondary stock market to accelerate the commercialization of science and technology.

The 12th Five-Year Plan (2011-2015) will be approved in March 2011. For the first time in history, China invites international expertise to advise on goals and policies of its Five-Year Plan. In the proposed Plan, China will nurture and develop seven new strategic industries with favorable policies in the next five years, including new-generation information technology, energy-saving and environmental protection, new energy, biology, high-end equipment manufacturing, new materials and new-energy cars. In addition, the country will no longer target the growth rate as its top priority in its industrial development plan, focusing instead on the quality and the profitability of industrial growth. In particular, China will encourage the use of high technology in its industrial development.

As illustrated in the past Five-Year Plans, Chinese planners have been trying to unify technology policy and economic policy, import and assimilate foreign technology, and overcome the problems of the separation of science, technology, and industry since the early 1950s. The commitment to these goals have been increasingly seen by Chinese administrators as requiring reforms in the operation of the economy and technology management. These initiatives will continue to be at the top of China’s planning agenda.

Source: http://en.ce.cn/subject/17cpc/index.shtml

Top News of Last Month
Nov 01 China goes door-to-door in world's biggest census
Nov 03 Foreign input sought on next Five-Year Plan
Nov 05 China reaches new high for most space missions in a Year
Nov 06 IMF approves China as third-biggest power, weakening influence of Europe
Nov 07 U.S.-China relationship shifts toward deep mistrust
Nov 11 China inflation jumps to 25-month high in October
Nov 15 China surpasses India in sending students to U.S.
Nov 16 China unveils jet to rival Boeing and Airbus
Nov 24 China, Russia quit dollar on bilateral trade
Nov 25 Senior CPC official urges self-innovation of green technology
New Books
Advanced Manufacturing Technology in China: A Roadmap to 2050

Edited by Tianran Wang, Yi Zhang, Haibin Yu, Feiyue Wang

“As one of the eighteen field-specific reports comprising the comprehensive scope of the strategic general report of the Chinese Academy of Sciences, this sub-report addresses long-range planning for developing science and technology in the field of advanced manufacturing technology. They each craft a roadmap for their sphere of development to 2050. In their entirety, the general and sub-group reports analyze the evolution and laws governing the development of science and technology, describe the decisive impact of science and technology on the modernization process, predict that the world is on the eve of an impending S&T revolution, and call for China to be fully prepared for this new round of S&T advancement. “- from Springer, Nov 2010

Edited by Markus B. Hofer, Bernhard Ebel

“China is the world’s largest power region, achieving economic growth rates that exceed those of most industrialized countries. In this book practitioners of international companies are offered valuable insights and lessons from established and successful managers, academics and consultants. The book is divided into three parts: “Opportunities and Challenges in China”, “Strategies for Market Entry and Business Success” and “Practical Insights from China”. It covers a variety of topics such as business strategies, branding, pricing, market research, legal constraints and successful business relations.”- from Springer, Nov 2010
China's Emerging Middle Class: Beyond Economic Transformation

Edited by Cheng Li

“The rapid emergence and explosive growth of China’s middle class have enormous consequences for that nation’s domestic future, for the global economy, and for the whole world. In China’s Emerging Middle Class, noted scholar Cheng Li and a team of experts focus on the sociopolitical ramifications of the birth and growth of the Chinese middle class over the past two decades.”- from Brookings Institution Press, Nov 2010
Upcoming Events
Dec 07 - Dec 09 Innovation in Drug Discovery: Science & Technology
Dec 11 - Dec 12 The Third Conference on Strategy and Marketing
Jan 14 - Jan 15 International Conference on Innovation and Information Management
Jan 19 - Jan 19 CFO China Summit 2011
Jan 19 - Jan 20 China IP Law

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