China companies raising standards in innovation

Software expert Alex Tao returned to Toronto from a recent business trip to Beijing with a gift for his wife: a Huawei Mate 7 smartphone - a model launched just a few weeks ago.

It cost about 15 per cent less than it would have in Canada but what most impressed Tao was its "cool appearance, big 6-inch screen, 13 mega-pixel camera and a long-lasting battery".

Such technological and design improvements have helped Huawei quickly win market share from dominant smartphone makers Apple and Samsung.

It is one of a growing band of mainland companies emerging as innovative industry leaders and changing global perceptions of China as the world's factory for cheap, lower-end products.

Analysts say the strategy rolled out by Beijing to promote "Innovated in China" - as opposed to merely "Made in China" - is crucial to boosting productivity, although mainland-wide transformation has a long way to go.

The world's second-largest economy has suffered from a property slump, excess capacity and rising labour costs, with the gross domestic product expanding at a five-year low of 7.3 per cent in the third quarter of the year, rapidly losing steam from the double-digit expansion rates seen in the past decade.