What’s is new and what is key?A first look at the role of science and innovation in China’s Five-Year-Plan recommendations

“We need to realise that new technologies aren’t like roads and bridges that can be completed with a lot of funding…”- Policy expert involved in the preparation of China’s 14th FYP The recommendations for formulating China’s next...

We need to realise that new technologies aren’t like roads and bridges that can be completed with a lot of funding…

Policy expert involved in the preparation of China’s 14th FYP

The recommendations for formulating China’s next Five-Year-Plan (FYP 2021 – 2025) and long-range goals for 2035 were released in the beginning of November. They provide the first glimpses of China’s economic and social development strategy in the coming 5 years. They confirmed also China’s ambition to double the size of its economy by 2035, i.e. becoming the largest economy in the world. More than ever, the international communities are showing an interest in and taking a deep look at China’s FYP, the most strategic and profound policy process and development guideline for China. More than ever, the FYP could, and need, to play a defining and transforming role to explore China’s way forward – when China are facing “changes unseen in a hundred years” and the world is facing so many complex challenges and complicated circumstances. And, more than ever, science and innovation are becoming keystones to support and drive China’s future development and transformation. The detailed FYP is expected to be fleshed out in the coming months before approval by China’s people’s congress next year (usually in March). However, some new and key aspects of China’s future science and innovation development are already in the spotlight and here are a few of our observations and reflections.

Science and innovation in the Recommendations…

As some analysts have already noticed, in this relatively short policy document, innovation was mentioned 47 times. Among the 12 key tasks/strategic priorities of the 14 FYP, the task of “innovation-driven development and new development advantages” with 4 key pillars, was listed as number one (See Figure below).[1]    

Figure: The task of innovation-driven development and its four key pillars

Some specific measures within the four pillars are also presented (See Box below)[2]:

In the future implementation, it will be even more interesting and important to understand and to elaborate the interactions between innovation-driven development and other key tasks and priorities (See Figure below).  

Figure. Innovation-driven development and other key tasks

From the 13th FYP to the 14th FYP and beyond – China’s science and innovation will start from a different place…

Since China’s innovation-driven development strategy was launched in the 13th FYP (2015 -2020), the R&D expenditure has been increasing at a two-digit rate annually. Between 2015 and 2019 the R&D expenditure has increased by 56.3%, of which expenditure in basic research has been doubled. China has now the second largest R&D expenditure in the world (Ministry of Science and Technology, MoST, 2020).   

To illustrate the qualitive aspects as part of the results from the above quantitative increase, here are two new and interesting examples.  

In a recent report on “Research Fronts 2020: Active Fields, Leading Countries[3], China’s relative position/performance in 148 research fronts in 11 broad research areas were identified. China ranks second to the United States, followed by Britain, Germany and France. China’s researchers are particularly active in the fields of agricultural science, plant and animal sciences, chemistry and materials science, mathematics and information science (See Figure below).

Figure: Top 5 countries of Research Fronts 2020

As reported in “SDG research in US, Japan, UK, EU 28 and China”, more than 4 million research papers related to sustainable development goals (SDGs) have been produced during 2015 -2019. [4] US, China, UK and Japan are among the countries that have been most productive and contributed to the largest number of research papers. Chinese researchers contributed around 690 000 papers with the highest numbers in goal 6 (clean water and sanitation), goal 7 (affordable and clean energy), goal 9 (innovation and infrastructure) goal 11 (sustainable cities and communities), goal 12 (sustainable production and consumption). In terms of quality of research, measured by impact factor, China has also delivered high-quality research in an international comparison (See Figure below).

Looking beyond the progress and achievements, there are deeper insights among policy experts and practitioners on the operative and structural weakness of China’s current science and innovation development, for instance: [5]

  • Both original innovation and progress from original innovation to deep-tech scaling-up, industrialisation and commercialisation are still week, despite the fact that incentive schemes, including IPR-ownership of researchers have been significantly enhanced.     
  • The problems behind that the blocking of Chinese companies’ value-chain and supply-chain are now considered being far beyond single technology, single product or single component. Instead, the root causes are operating mechanisms- and capacity-related systemic weakness in China’s science and innovation system and its interaction with industrial development.  

Departing from the progresses as well as the weaknesses that need to be fundamentally addressed, the future development of China’s science and innovation will also be geared towards new trends and new requirements, such as:

  • Multidisciplinary research and cross-sectoral integration are increasingly defining the basis for disruptive breakthroughs in science and innovation.
  • Methods for research and innovation are advancing accordingly, i.e. increasingly data-driven and dependent on large-scale and sophisticated research infrastructure.
  • Disruptive changes in science and innovation are more rapidly integrated with industrial development and transformation, in terms of productivity- and competitiveness improvement in the real economy, not least in digital transformation related fields.     
  • Research and innovation will and need to play an increasingly important role to tackle global challenges, which is the basis for a deepened international cooperation in science and innovation.  

Science and innovation in China’s new economic development framework …

One of the new elements in the recommendation is China’s new economic development framework: dual circulation. It implies that China will continue to be open to the world (international circulation), while reinforcing China’s domestic market (domestic circulation). As emphasised by top-level policy makers and experts, the dual circulation strategy is far more than just stimulating domestic demand. From an innovation development viewpoint, the following aspects will be of interest and importance:

  • As China’s export as share of GDP decreased from 36% in 2006 to 18% in 2019, domestic consumption, not least the transformation towards sustainable consumption will be an even stronger driver for innovation. 
  • At the same time, supply-side reforms, which started already in the 12th and 13th FYP will be accelerated and deepened in the 14th FYP and beyond, through which both indigenous innovation and original innovation will become an even stronger driver for China’s competitiveness development.
  • Dual circulation is balance between China’s openness and “self-reliance”. The success of this strategy will be highly hinged on the development of China’s “high-quality openness”, which is one of the key tasks of the 14th FYP. The high-quality interaction and integration of China’s science and innovation system with the global one could be one of the most strategic and “trust-building” elements in such a balance.     

Science and innovation in China’s role in dealing with global challenges…

Climate change has become one of the areas where China tackles the global challenges with enhanced domestic ambition and together with the international community. After the latest announcement of China’s new climate pledge for 2030 and 2060, in the latest G20 Riyadh Summit on 22 Nov, China’s president Xi Jinping referred to the Recommendation in his remarks that “ China will pursue clean, low-carbon, safe and efficient use of energy and accelerate the growth of new energy and green industries to promote greener economic and social development in all respects”.[6]

China’s new vision to become carbon-neutral by 2060, driven by the transformation from both the supply- and demand-side, could be a strong driver for science and innovation in the 14th FYP and beyond. “Green development is in line with, not against China’s economic growth”, as concluded by China’s top economist. As a matter of fact, a comprehensive “green technology application roadmap”, covering 20 key green technologies in the fields of  water, energy, transport, building and land-use, has already been included in the high-level policy studies to contribute to the policy development on green transformation in the 14th FYP period. [7]

To conclude, the key message from the Recommendation is that China wants to grow more resilient, more innovative and more sustainable. On the way forward, China’s high-quality growth aims to be built on high-quality science and innovation, high-quality structural reforms and high-quality openness. The devil is in the details and we need to see how the ambition and vision will play out in reality and in action. Nevertheless, we can see that vivid debates and a great deal of new thinking around a “new-type national innovation system” will be emerging and China’s e future development of science and innovation will be more integrated with economic transformation than ever as well as more structural and more disruptive than ever…

Nannan Lundin, Linnea Yang and Jessica Zhang

[1] http://www.xinhuanet.com/politics/zywj/2020-11/03/c_1126693876.htm

[2] Unofficial translation of the Recommendations by Office of Science and Innovation, Beijing.

[3] The report was issued by the Institutes of Science and Development under the Chinese Academy of Sciences (CASISD), National Science Library and Clarivate Analytics, on 15 November in Beijing.

[4] http://www.chinahightech.com/html/hotnews/tuijian/2020/1119/5573136.html

[5] For more details, see for instance, https://finance.sina.com.cn/china/2020-11-11/doc-iiznctke0709364.shtml and http://zhishifenzi.blog.caixin.com/archives/236596

[6] https://www.chinadaily.com.cn/a/202011/22/WS5fb99cc7a31024ad0ba959d1.html

[7] https://finance.sina.com.cn/china/gncj/2020-11-18/doc-iiznctke2104432.shtml?cre=tianyi&mod=pchp&loc=7&r=0&rfunc=100&tj=none&tr=12