"China must rely on innovation to achieve continuous and healthy economic development." To anyone outside China, that seems to be stating the obvious. What makes it striking is who said it: none other than President Xi Jinping, speaking last December. China has long pursued an industrial policy of "indigenous innovation", obliging multinational companies to transfer technology and propping up SOES in strategic sectors. That has not worked, so now the country is pouring money into a renewed push from the top down. It is spending more than $200 billion a year on r&d, up fourfold in a decade. As a proportion of gdp the figure, at 2%, now slightly exceeds that for the eu. Thomson Reuters, a research firm, claims that China is an "undisputed patent leader". Central planners now want to triple the number of patents by 2020, to 14 per 10,000 people. They aim to increase r&d spending further and eventually match America's current level of 2.8% of gdp, in the hope that all this will make China an innovation superpower. Already a fifth of the world's technical graduates are Chinese.
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