Despite the mainland's rapid economic growth, it is still wrestling with the challenge of unleashing innovation from its workforce, according to former General Electric chief executive Jack Welch.
Speaking on the sidelines of a business forum yesterday, Welch said the mainland also needed to develop its health care and pension systems to create what he described as 'a high-consumption society'.
Welch credited the mainland with having an energetic trait that is 'far above the rest of the world'.
'The question for China, though, is how much innovation can be matched to grow with that energy,' he said. 'We need more ideas from China.'
He said the mainland continues to offer an efficient and low-cost environment for companies to manufacture products, which has helped the economy grow fast over the last three decades.
That prompted Welch to ask: 'How do you unleash the enormous brain power that's there?'
Under the mainland's 12th five-year plan, Beijing has vowed to increase innovation, develop its services sector and make domestic consumption an engine of growth rather than depend on exports.
Following the approval of that plan by the National People's Congress in March this year, Premier Wen Jiabao said he had always emphasised that the mainland's rise should not be seen solely from the point of view of gross domestic product. The country needed to build a whole system to nourish talent and encourage progress in science and technology, he said.
'China's economy has long been seen as imbalanced, uncoordinated and unsustainable,' Wen said. 'We must seize the opportunity now to adjust the economic structure.'
The shift towards a more innovation-focused economy is already in progress. The mainland had a total of 12,337 international patent applications last year, up 56.2 per cent from 7,900 filings in 2009. That ranked it fourth behind the United States, Japan and Germany.
Joanne Hon, the head of sales and marketing operations for Asia at CPA Global, the world's top intellectual property (IP) management services provider, said the publication of the mainland's National Patent Development Strategy last November gave more impetus to improve management of IP assets.
To boost the mainland's innovation development, the document set a target of two million patent filings a year by 2015.
Welch, who built GE into a US$400 billion business as its chief executive for more than 20 years until 2001, said creating a sustainable high-consumption society meant a sharper focus on the welfare of the country's workforce.
'There's no question that China has enormous savings,' Welch said. 'But to be a consumption society, the country is going to have to develop a pension system and health care system that will assure people they'll be taken cared of in their old age.
'If that happens, you end up with the capital to be a high-consumption society,' he said
'It's going to take some time, but I'm sure that will occur.'