China's quest for advanced technology will be a defining feature of state policy in the 21st century. Its leaders are firmly committed to utilising science and technology as a lever of economic development.
Innovation has been recognised as the soul of the nation's economic progress and enterprises should develop capacities to absorb and develop new technology.
The aim is to continue the modernisation programme initiated under Deng Xiaoping, who saw science and technology as the primary productive forces in economic development. This means creating domestic capabilities that would enable China to occupy a leading position in global science and technology.
In the two decades of reform since 1980, China has seen three major changes. First, the open-door policy has enhanced access to a global pool of technologies and re-oriented development efforts. Second, the extensive reforms introduced in science and technology policies have successfully mobilised economic incentives for technological development and diffusion.
Third, there has been a shift in focus from state-sponsored research projects towards a broader framework of support for technological innovation.
China has achieved some impressive successes in the indigenous development of technology. However, problems continue to confound policies designed to bolster technology-based development. Despite massive import of foreign advanced technology, the level of production in many Chinese industries remains far from the global technological frontiers. While a group of hi-tech enterprises has gained fame for entrepreneurship and innovation, the large majority are still struggling to attain significant economies of scale and international competitiveness. Domestic investment and diffusion of new knowledge continues to be inadequate.
Although there is a growing supply of skilled graduates, it is doubtful this will meet the need for well-trained personnel. The open-door policy has created new opportunities to import advanced technology, either as capital goods with designs and specifications, or in the form of training and management procedures. Transfer of foreign technology and organisational know-how remains crucial. But without more extensive and integrated domestic research and development, foreign technology will not help China catch up.