Chinese SOEs will be urged to innovate, chase big projects under next five-year plan
State-owned companies in China may soon be encouraged to engage in ambitious innovation projects in the life sciences, new materials and telecommunications industries, according to a former policymaker in the country.
The United States had set a good example for China in terms of how to stimulate groundbreaking innovations with giant projects, said Zheng Xinli, an economist who helped pen China’s upcoming five-year development plan.
He gave the examples of the US’ “Star Wars” programme. or Strategic Defence Initiative, a proposed missile defence system against nuclear attacks, and its Manhattan Project, which led to the development of nuclear weapons during the second world war.
Zheng was speaking to the Economic Information Daily, a newspaper run by state news agency Xinhua.
Big industrial and engineering projects could be used by Beijing to force State-owned enterprises and public research institutes to innovate, he said.
In his capacity as deputy director of the economic committee of China’s top advisory body, the Chinese People’s Political Consultative Conference (CPPCC), Zheng helped draw up the Party’s blueprint for economic growth and reform from 2016 to 2020.
China has already launched several landmark projects in industries where it hopes to become a world leader, from high-speed trains to next-generation nuclear power plants and space stations, but it now wants to expand to other areas.
Bioengineering, advanced materials and the creation of the world’s first nationwide wireless internet 5G telecoms network all take priority in the new plan’s budget, according to the newspaper report.
The country has also made progress in the life sciences by genetically mapping rice, potentially for future commercial use.
New materials such as carbon fibre and graphene will also attract more government investment due to their rapid development in research and promising future in industrial applications, the report said.
Chen Jin, a professor of economics at Tsinghua University who also helped draft the plan, confirmed that Chinese enterprises need to develop more big projects and “extreme technology” to stay competitive globally.
A big concern for Beijing is that its SOEs lack incentives to innovate, he told the paper, adding that they should be judged in terms of performance and management, not just profit.
Despite having legions of researchers and vast resources at their disposal, their creative performance lags far behind that of private players like Chinese telecoms company and smartphone maker Huawei, he said.