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TWAS Newsletter
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China seeks to build knowledge economy

China seeks to build knowledge economy

"China must move from a low-cost manufacturing economy to an economy driven by science-based innovation," says Wang Yuan, executive vice president of the Chinese Academy of Science and Technology for Development (CASTED).

Wang made his remarks at the UNESCO-ISTIC Roundtable Planning Meeting in Kuala Lumpur, Malaysia, 23-24 June 2010. TWAS was one of several international science organizations asked to participate in the meeting which focused on possible avenues of institutional collaboration.

CASTED, which operates within China's Ministry of Science and Technology, is responsible for providing both a broad range of statistics and a sound basis of analysis for the development of China's science, technology and innovation policies. It is comprised of eight research institutes, including the Institute of Comprehensive Development, the Institute of Foresight and Evaluation, and the Institute of Science, Technology and Society.

"China has increased its funding for research and development by an average annual rate of 20% over the past 10 years," Wang says. That has spurred an historic increase in China's scientific and technological capabilities. Nevertheless, the core of the economy's success still resides in manufacturing whose main advantage is its low cost.

"What China must do in the years ahead," says Wang, "is to place greater emphasis on innovation. That will allow it to produce goods and services that lie higher up the value chain and therefore generate greater revenues. This is the sector of the economy where new wealth is created."

This is not the only change that Wang would like to see unfold in the years ahead as China's economy grows stronger. He also says that China must make production processes more efficient, especially in the use of energy. That would enable China to continue growing while placing less stress on the environment. "China cannot make a choice between growth and environmental protection," notes Wang. "It must do both by turning to science and technology to attain greater efficiencies."

He also cites the need for China to generate greater domestic demand as a way of raising both production levels and living standards. As part of this effort, it must "close the income gap between urban and rural China and the wealthier eastern coast and poorer interior provinces. "Job growth in cities will continue to provide a significant safety value for limited employment opportunities in the rural areas," he observes, "even as the rural areas continue to develop."

Wang also notes that China must continue to open up to the outside world, not only in terms of economic investment but also in terms of scientific exchange. "We face a number of critical global environmental challenges, including climate change, biodiversity loss and an increasing scarcity of natural resources." Wang maintains that global scientific exchange is essential for addressing these challenges and that "China is eager to play an increasing role in international discussions related to these challenges, especially among developing countries."

China, Wang notes, is largely pleased with the pace of economic growth it has experienced over the past several decades. Yet he concludes that it cannot expect to continue to succeed without "making significant adjustments to its programmes for economic growth and scientific capacity building in the years ahead."