By David Chan (CCTV.com)
Updated: 2016-03-03 20:23:21
"Innovation" is the keyword on everyone's lips as the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC) are to commence the 2016 annual plenary sessions on March 5 and 3 respectively in Beijing.
Over the past year, Chinese President Xi Jinping has emphasized time and time again on the importance of innovation-driven growth for the country's economic development.
Meanwhile, Chinese Premier Li Keqiang has stressed the role of innovation in China's 13th Five-Year Plan, encouraging renewed efforts to improve old business models and advance new growth engines.
The Chinese government has introduced measures including tax reductions and streamlined government initiatives to incentivize and promote startup activities throughout the country.
In September 2015, China set up a development fund worth almost $10 billion USD in order to assist small and medium-sized enterprises.
Prospects for economic growth through innovation
With around seven million new graduates entering the job market each year, more and more young Chinese are opting to start their own businesses instead of joining the ranks of the bureaucracy or large corporations.
According to Premier Li, as of September 2015, over 10,000 new firms are registering in China per day, and these new companies have become job providers, thereby facilitating robust job growth despite the economic slowdown that has taken hold in recent years.
Foreign companies seem optimistic about future growth of the Chinese market, as the latest report from the American Chamber of Commerce in China revealed that nearly three quarters of its member firms enjoyed strong investment returns in 2015, and over 90 percent of member companies viewed innovation as key to their future success in China.
China's startup boom
In 2015, over 4.4 million companies were established in China, up 21.6 percent from the previous year.
This recent startup boom followed implementation of state measures to encourage citizens to establish their own businesses. The measures included tax breaks and easier market entry for entrepreneurs.
Global venture capital made 1,555 investments in Chinese startups valued in total at $37 billion in 2015, up 147 percent from the previous year.
Government-sponsored initiatives to promote innovation
According to statements released by the State Council (China's cabinet), Beijing will continue to foster innovation through state-sponsored Research & Development (R&D) initiatives focusing on vital areas of economic development.
In February this year, Beijing began a national R&D plan to streamline a number of state-funded scientific and technological projects.
The plan consolidates state sci-tech programs focusing on key fields such as space, information technology, biotechnology, energy, telecommunications, and marine technology.
State-driven innovation has met with success in the past, with previous breakthroughs such as the supercomputer Tianhe-1 and the manned deep-sea research submersible Jiaolong.
In the coming years, China plans to implement a number of government-sponsored programs aimed at innovating through the development and large-scale application of new technologies.
The country also plans to expand existing sci-tech programs to upgrade economic efficiency.
China is in the midst of assembling its latest manned spacecraft and second space laboratory, Tiangong 2.
The space lab is scheduled to be launched in the third quarter of 2016, while the Shenzhou XI spacecraft is set to be launched in the fourth quarter of this year.
On the startup front, China has been increasing policy support for domestic startups in order to foster an environment amenable to mass entrepreneurship. By the end of 2015, there were over 2,500 incubators for high-tech businesses and over 4,000 innovation bases active throughout the country.
China will create more innovation and entrepreneurship incubators, or "makerspaces," to support economic restructuring and industrial upgrading and modernization.
There are at least 130 of these makerspaces in China situated mostly in the cities of Beijing, Shanghai, and Shenzhen, which provide assistance in company registration, bank loans, and inexpensive online services, such as patent information cloud storage.
It appears that China is on the path toward further innovation. As startups continue to proliferate across the country with help from the Chinese government, technological innovations and economic improvements are taking hold at a rapid pace.
Time will tell whether China's current progress will continue unabated.
David Chan, a Canadian freelance writer and journalist based in Toronto, Ontario, working for international media outlets. His areas of focus are international politics, culture, and the global economy.
