Xi Yanchun(Host):

Ladies and gentlemen, good morning. Welcome to the policy briefing of the State Council. This week, the executive meeting of the State Council passed the Special Plan for National Science and Technology Innovation for the 13th Five-Year Plan. Today, we have with us Mr. Li Meng, deputy minister of Science and Technology, and Mr. Xu Jing, director general of the Department of Innovation and Development of the Ministry of Science and Technology. Mr. Li will talk about China’s achievements in innovation and plans for the next five years and answer your questions. Let’s give the floor to Mr. Li Meng.

Li Meng:

Friends from the press, ladies and gentlemen, good morning. It is my pleasure to attend the briefing, and I want to extend my appreciation to all the journalists for your long-term support of China’s scientific and technical professionals and their undertakings. Since the 18th National Congress, the CPC Central Committee led by President Xi Jinping put science and innovation in a prominent position in national development, and encourage scientists and technological staff to make more remarkable achievements. Recently, the exhibition of scientific achievements from the 12th Five-Year Plan drew wide media attention.

Currently, China’s scientific and technological development is entering a key stage of moving from quantity accumulation to quality development, and from certain breakthroughs to overall improvement of system capacity. This will play a key role in supporting the new economic normal and adding new momentum to economic growth. In 2015, R&D input of China reached around 1.4 trillion yuan, accounting for 2.1 percent of GDP, of which 77 percent came from enterprises. In addition to the second authorization of invention patents by Chinese nationals, China also made many material achievements with international influence in basic, cutting-edge, and strategic high-tech fields, such as manned space flights, lunar probes, and super-computers. In terms of super-computing, Sunway TaihuLight is the fastest super-computer in the world, after Tianhe-2 won six consecutive awards in the past. Both are using domestic CPUs. Leading achievements were also made in manned deep submergence, quantum communication, iron-based superconductors, and induced pluripotent stem cells. Some major science and technology infrastructure, such as Shanghai’s synchrotron radiation facility and Guizhou 500-meter aperture spherical telescope, have been completed.

In high-end manufacturing, we made breakthroughs in core technologies of high-end IC equipment manufacturing and high-end control equipment. What is more important is that we have trained a group of world-level problem-solving scientists, and bred a number of innovative enterprises and entrepreneurs with international influence. With the support of major national programs and scientific projects, China has mastered sufficient technologies in high-speed railways, UHV AC power transmission and transformation, and high-challenge exploration of oil and gas fields, and is beginning to export those technologies. Under the leadership of the central reform leading group, the reform of China’s scientific and technological system is moving further to cut off drawbacks that limit integration of science and economy, dent enthusiasm of researchers, and hold back enterprises from being an innovation player. Various regional innovation systems are improving, with over 2,000 makerspaces nationwide. The flourishing mass entrepreneurship and innovation has encouraged thousands of young people to start their own businesses. A market-based allocation of technological innovation resources has basically been formed.

Li Meng:

Ranked No 18 on the global innovation index, China is the only country whose ranking keeps moving up over the years. We have constantly improved our technological innovation capability, which has been integrated with our industrial system, huge market size and enhanced innovation efficiency of the mobile Internet era to form our unique competitive edges and development potential. And the dependency of economic and social development on technological innovation is increasing.

However, we should also note that there are still many problems to be solved in technological innovation. For example, our ability for original innovation needs to be strengthened; the shortage of core technologies, leading and high-tech talent is still prominent; and the integration between academic research and industrial production needs to improve. These issues demand our continuing efforts in the 13th Five-Year Plan period.

As we all know, the 13th Five-Year Plan period is not only the decisive stage of building a moderately prosperous society in all aspects and an innovation-oriented nation, but also the critical period of implementing an innovation-driven development strategy and comprehensively deepening the scientific and technological system reform. In accordance with the deployments of the CPC Central Committee and the State Council, and under the leadership of the leading group of national scientific and technological system reform, the Ministry of Science and Technology has, in conjunction with related departments, prepared the special planning for scientific and technological innovation during the 13th Five-Year Plan period. The plan was adopted at the State Council executive meeting on July 20, which will be published after being further modified and improved in accordance with the spirit of the meeting. The plan is one of the 22 national key special plans determined by the State Council, which is the detailed implementation plan for the Outlines of 13th Five-Year Plan and the Implementation Outline for National Innovation-driven Development Strategy. The plan sets the overall goal of becoming an innovation-oriented country and building a scientific and technological power. It proposes 12 indicators, including moving our ranking of national innovation capability from 18th place to 15th. Being ranked No 18 means that China has become a globally recognized innovative country. The plan proposes that the contribution rate of scientific and technological progress should be increased from the current 55 percent to 60 percent, and the proportion of added values of knowledge-intensive service sector to GDP be increased from the current 15.6 percent to 20 percent. And the latter is an important index for indicating whether a nation’s industries are climbing to the high end of the value chain. Focusing on in-depth implementation of the innovation-driven development strategy and the support for supply-side structural reform, the plan put forward requirements on building a national innovation system from six aspects, including innovation entities, bases, space, network, governance and environment. It also made systematic deployments for building the first-mover advantages of national development, enhancing the original innovation ability, expanding new room for innovative development, promoting mass entrepreneurship and innovation, comprehensively deepening scientific and technological system reform, as well as promoting the popularization of science.

Li Meng:

Overall, the plan has the following characteristics: first, it keeps up with the times closely. It is an innovative plan that can better reflect the integration of science and economy, and the transition of China from a large nation of science to a technological power. Second, it highlights implementing major national strategies, including “Made in China 2025”, Internet Plus, Internet Power and Building a Maritime Power. Third, it places equal emphasis on reform and development, stressing both development arrangements and policy measures on reform. Fourth, it highlights macro layout. As a national plan for scientific and technological development, it covers key industries, major departments and key areas. We have striven to make this plan detailed and practical, and set up a number of special columns to make it easier to implement. That concludes my brief introduction. And now I’d like to answer your questions. Thank you.

Xi Yanchun:

Thanks for Mr Li’s introduction. Mr Li is very familiar with scientific and technological innovation, and has devoted much time to this issue. Please take this opportunity to raise your questions of concern.

China Daily:

My Question is for Mr Li. The innovation development concept was raised at the Fifth Plenary Session of the 18th CPC Central Committee, and at the meeting, innovation was clearly defined as the first driving force to lead development. To fully make use of innovation as the first driving force, what specific measures and arrangements are included in the plan? Thanks.

Li Meng:

Innovation as the first driving force for development is an important decision made by President Xi Jinping. We are striving to make a plan with a focus on the following aspects.

First, a combination of recent and long-term strategies. On the one hand, promote the transformation of advanced technological results into practical productivity, speed up the construction of a technological system for 10 major industries, and foster new growth areas in the economy. On the other hand, deploy the scientific and technological innovation 2030 project, bearing the national long-term strategy in mind. We also call it 6+9, which covers crucial projects concerning China’s economy, social development and security, and the development focus of international scientific forefront, such as quantum communication, national cyberspace security, and intelligent manufacturing and robots. Major projects involved in the 2030 program, and 16 important scientific and technological projects that are already launched jointly form a tiered and consecutive layout of crucial research and development tasks.

Second, use both hard and soft tactics. On the one hand, emphasize the development of basic research, in particular to strengthen research with free exploration and academic system construction. On the other hand, establish a strategic power for scientific and technological innovation with a focus on the most pressing needs of national economic and social development.

Third, driven by two wheels - scientific and technological innovation, and system and mechanism innovation. We will strive to strengthen deployment in key areas concerning economic power and core competitiveness, and make deployments on scientific and technological management structural reform and efficient research and development system in efforts to achieve breakthroughs in the system and mechanism that restrict science and technology development.

Four, connect with the outside. We emphasize independent control of key technologies, enhancing independent innovation, and persisting in planning and innovation with a global perspective. We should also actively integrate into the global network, participate in global governance of innovation, promote the two-way flow of domestic and foreign innovation resources, improve the international level of technological innovation of our country. Thank you.

Xinhua:

I would like to ask Mr Li two questions. First, just now you mentioned that the enterprise is the main body of innovation, which should play a leading role in innovation. But as far as we know, there are a number of innovative enterprises, especially small and medium-sized ones, that are having difficulty in financing. Regarding this, is there any arrangement in the 13th Five-Year Plan for sci-tech innovation? Second, in terms of sci-tech service industry, does the 13th Five-Year Plan include establishing a market for technology transaction, and a financial system for sci-tech innovation? Could you share with us some information on this? Thank you.

Li Meng:

A chapter of the plan on science and technology innovation during the 13th Five-Year Plan is about technology and finance. Scientific and technological innovation cannot be developed without financial support. As the main body of technological innovation, enterprises should enhance their ability of research and development, while financial support is also needed, such as carrying out pilot investment and loan linkage, and establishing guidance funds for the transformation of scientific and technological achievements. The Ministry of Science and Technology and Ministry of Finance have co-launched the fund, attracting outstanding entrepreneurial investment management teams to set up sub-funds and develop multi-level capital market to support innovation. At present, the high cost of financing is another issue for small and medium-sized enterprises. One of the important reasons for it is that the financing channel is mainly indirect financing, so the cost is high. Therefore, we should provide multiple capital markets for sci-tech innovation enterprises to get loans. Thank you.

CCTV News Center:

Scientific and technological innovation in China has indeed improved tremendously based on your introduction of the major achievements. My question is, compared to the past, what are some new characteristics and features seen from sci-tech development during the 12th Five-Year Plan?

Li Meng:

As I mentioned earlier, since the beginning of this century, China was still only a follower in the sci-tech innovation field. Until the 12th Five-Year Plan began, when we noticed that we’d become equally good or even more advanced in some specific innovation field, compared with some developed countries.

We invited over 8,000 scientists to do an evaluation report on the sci-tech development in our country. The report shows that among 1,350 items of technology inventions in 13 major tech fields, 17 percent have achieved advanced international levels, 31 percent are equal the average level, and another 52 percent still follow other countries’ technology and innovation. These figures are regarded as a major transformation in the sci-tech innovation field in China. In the meantime, the Republic of Korea also did an appraisal on the field, which came to the same conclusion. Another piece of data should also be given attention, and it is research and development spending. The spending this year in China is 1.4 trillion yuan (over $200 billion), half of that in the U.S. Judging from the accumulative spending of the past decade, our spending has only been one-sixth of the spending of the U.S. Most of all, China has gained international fame for its efficiency performance in the research and development field.

Another new feature we are aware of is that China is starting to become more active in the global innovative network, which indicates we have more confidence in the innovative field. Research and development spending in China only took up 1.7 percent of the global spending in 2000, and that has risen to 14.4 percent in 2014. And international cooperation-themed dissertations account for a quarter of the published works in China, which helps to raise the level of international cooperation in science and technology. Many innovative enterprises have established R&D centers overseas, with some establishing research projects opening courses at universities in the US, such as CRRC Corp opening a course called “Introduction of high-speed rail” at a state university. The powerhouse of sci-tech innovation in China will have a profound impact on the new global landscape, leading to changes from global industrial division of work to economic scope.

The third new feature is the constantly improving innovative ability in China, which has integrated with our huge market scale and well-developed industrial system. It helps to shape the competitive advantage and development potential with Chinese characteristics. Enterprises’ research and development spending has always accounted for 70 percent of the entire spending by the whole society, which shows that the way enterprises gain profits has changed to relying on research and development, and technology rather than low labor costs and resources, and their methods to improve competitiveness also have altered. The new ways and methods have led us to gain more advantages in the global value chain.

Through technology innovation, we have improved our leadership, obtained efficient demands and improved the economic structure in China. The application of technologies, such as high-speed rail, 4G, nuclear energy, hydropower equipment, UHV transmission, and long-distance gas transmission, will help Chinese enterprises succeed in the domestic market and gain competitiveness in the international market. And a great number of innovative enterprises with international competitiveness have emerged. Thank you.

Phoenix Satellite Television:

We just mentioned that China has some problems in the development of science and technology, such as issues of basic research and original innovation. Many analysts believe that some irregular problems exist in domestic academic circles, such as researchers may strive for publishing academic papers. In the next step, will the national plan on scientific and technological innovation make more arrangements on strengthening basic research and original innovation? You just talked about the key technology, as China has been using the tracking strategy for many years and has been catching up for many years. And when shall we make some breakthroughs and changes so that we no longer need to import key technologies? Thank you!

Li Meng:

Basic research is important for the planning of science and technology, and it is also the weak link in the national development of science and technology. At the scientific and technological innovation meeting, President Xi Jinping specifically stressed strengthening basic research and improving independent innovation. Premier Li Keqiang also urged strengthening basic research. It is a disadvantage of China. basic research is different from technological innovation, and it needs long-time accumulation, talent, subject construction and continuing efforts. The history of China’s modern science and technology is not long, and in the early period after the founding of the People’s Republic of China in 1949, it followed a development path of imbalance and differentiation. It focused on developing whatever was needed at the time. With the growth of China’s national power, we started to comprehensively push forward scientific and technological innovation development and to speed up basic research.

China’s fundamental research has many problems now. First is the poor foundations, and another is the low proportion of investment in basic research. Investment in basic research only accounts for about 5 percent of the total research input, which is far lower than the 10 percent of foreign countries. Enterprises in China invest little in basic research, while big foreign companies usually invest a lot in basic research.

Now we find that many innovation-driven enterprises in China also started conducting basic research. In the early stages, they need to decide the direction themselves, or they will need to increase their exploration costs. Thus the importance of basic research is quite obvious.

Second, with continuous accumulation, tech innovation in many fields has increased a lot, but there is still a long way to go to use our own key technologies. On the one hand, global labor division is very clear in modern society, and even developed countries such as the United States and European countries rely on global production and their development of domestic industries cannot depend wholly on themselves. As was the case in China. We imported and exported many high technologies at the same time.

On the other hand, the key for development of industries is integrated innovation. The reason we import many high-end products is not that we could not produce the product, but we did not have the systematic production capacity. In the next step, we will focus on increasing the systematic innovation capacity of industries and not be limited to breakthroughs in the production of a single technology or product. We will catch up with abilities in all aspects, not just the ability to produce one product or technology.

Thank you.

People’s Daily:

It is indeed encouraging, the scientific and technological progress that Minister Li just talked about. I have some experience. For example, I have covered stories of manned space flight and moon landing. Later I had talks with a scientist, who said that it is worth being proud of, but also needs introspection. The US achieved moon landing in the year 1969, but we will achieve it in about 2020. I have two questions. You have mentioned that we will launch 15 new big scientific and technological projects before 2030, and there are also 16 old projects. I wonder what are the differences between the two groups? How can we ensure effectiveness while avoiding too much input? My second question concerns the national laboratory. The national laboratory now has been regarded as a strategic force for our country’s scientific and technological innovation. I want to ask Minister Li, how about this progress? What is the relationship between these laboratories and the old ones?

Li Meng:

The 16 big scientific and technological projects deployed in 2006 are involved in sectors such as electronic information, advanced manufacturing, energy and environment, biological health and space development. The 15 new projects are largely involved in these sectors, too. The projects deployed in the year 2006 will be completed in 2020, while the 15 new projects will be carried out before 2030. These two groups of projects will be integrated. For example, in the electronic information industry, we have three projects. The first one is core electronic devices, high-end general chips and basic software; the second one is ultra large-scale integration circuit; and the third one is the new generation of wireless broadband mobile communication. And in the new projects, we have quantum communication and quantum computers, which are very advanced and different from traditional information technologies. We also deployed projects concerning national cyber space security and big data.

There are two old projects in the advanced manufacturing sector, one is numerically-controlled machine tools, and the other is big airplanes. We have all seen achievements that have been made in this sector and products that have been put to use. Also in the new program, we have launched three scientific and technological projects, which include air and gas turbine engine, intelligent manufacturing and robots, and key new materials.

Also, in the energy and environment sector, in the past, we launched projects of large oil and gas fields, advanced pressurized water reactor, high temperature gas-cooled reactors and water pollution control. Now we will launch new projects such as smart power grids, clean utilization of coal resources and Beijing-Tianjin-Hebei comprehensive environmental governance. These research projects would play a big role in the future research and development projects.

Li Meng:

People questioned in the past whether research and development (R&D) input was worth so much money, but the exhibition on scientific and technological achievements during the 12th Five-Year Plan has made clear the answer. R&D on major projects can satisfy to a large extent the nation’s strategic demands as well as demands of industrial development. Problems such as decentralized input may exist in the process, but we are reassessing 16 major projects according to the requirements of the leading group of national scientific and technological system reform, in order to focus our efforts on the R&D of major technologies and products and enhance our R &D capabilities and efficiency.

We are implementing reforms on management of scientific and technological planning, and 15 new key innovation projects will be deployed through a unit platform. From basic research, technology breakthroughs to application and promotion, every part will be coordinated as a whole. We can achieve the best allocation of resources, thus greatly increasing the R&D efficiency.

As for the national laboratory, it is a far-sighted major policy decision, as President Xi Jinping said on many occasions, that a batch of national laboratories with multiple subjects will be built in major innovation fields. National laboratories have become important means for many developed counties to strive for first place in science and technology, economic growth and national security. At present, we are doing studies on the establishment of national laboratories, with an aim of making them comprehensive, large-scale research bases.

Economic Daily:

You just mentioned that the obstacle to China’s high-tech industry is the lack of original innovation and of collaboration between enterprises and institutes, so what will the government do to resolve these problems? Another question is, now that a new kind of business incubators such as “makerspaces” are growing in China, what will the government do to guide their development and to improve their service quality? Thank you.

Li Meng:

The government is reforming the management of technology projects. The measures can be described as “one platform, three mechanisms”. One platform is the inter-ministerial meeting, which includes all government departments related with science and technology issues. It enables them to work together for the national research plan.

Three mechanisms are professional institutes, supervision and consulting. In the future, professional institutes will replace the government as the manager of research projects. In addition, a supervision system will be created for the whole process, from design to implementation, of the projects. Next is the founding of a consulting committee composed of top scientists in China. They will discuss and give suggestions about those projects.

You just mentioned original innovation and the collaboration between enterprises and institutes. We have a whole-chain plan to enhance them. According to the plan, in the future, a research project will have all steps of innovation, from basic research to the final industrialization and marketing of the research results. It will replace the old method, where different steps were broken up into different projects.

In terms of “makerspace”, although China already has more than 2,300 makerspaces now, I still don’t think they are enough, compared with the number of Chinese scientists and college graduates. The government will spend more money to support business incubators in order to ease the cost of entrepreneurship. For example, local governments can give subsidies to business incubators so that start-ups can pay less rent and water and utility fees.

About the service quality, the government will encourage makerspaces to improve their professionalism. Currently, they are a hodgepodge of different industries. But in the next step, we will build more business incubators that concentrate on just one industry.

In addition, more professional institutes will be encouraged to build business incubators. Due to their strong research capacity, their achievements can be transformed into productivity more quickly, which will contribute more to the real economy.

China Business News:

Mr Li. According to the plan, in order to create national advantages, efforts should be made to safeguard national security and strategic interests by building a system that involves “deep-space”, “deep-sea”, “deep-blue” (Internet technologies), and “deep-earth” technologies. Would you please further explain such efforts? Thank you.

Li Meng:

There are two aspects concerning the national advantages. The first thing is the advantage in basic research. The second thing is about breakthroughs in technologies in major sectors. With such technological advantages, we can become a dominant competitor at the medium-to-high end of the value chain. In addition, national laboratories and major scientific equipment and apparatus, which signify basic innovation capacity, can help support such advantages.

With regard to “deep-blue”, further efforts should be made in super computers and quantum computers. Of course, this will be a long process. On the “deep-space” technologies, further efforts should be made in lunar exploration, Mars probes, and deep space exploration. On “deep-sea” technologies, space stations in deep sea will be constructed, and research and development of key technologies of deep-sea exploration and equipment will be strengthened. On “deep-earth” technologies, efforts will be made in deep earth probing, urban space development, and mineral exploration. Mr Xu has taken charge of major projects. He will provide you with further details.

Xu Jing:

Now, I will make a conclusion on the efforts to develop these technologies, as Mr Li has introduced the basic information. On “deep-space” technologies, as you know, China has manned space and lunar probe projects, and the target of a manned space project is building a space station. On the basis of this, we are considering starting a Mars probe project during the 13th Five-Year Plan. In addition, we are also considering systematic space development such as orbit service of spacecraft and ground-air-space integration.

On “deep-sea” technologies, Jiaolong, the deep-sea manned submersible, is very popular. On the exhibition of achievements during the period of the 12th Five-Year Plan, you can see China’s rapid development in marine equipment and marine drilling platform. In the future, we will make major breakthroughs in deep-sea resource exploration and national marine rights and safeguarding our interests. One of the major tasks is building a deep-sea station, which will systematically improve China’s deep-sea technologies and equipment. In addition, development of deep-sea key equipment and sensor network will be the focus of research.

On “deep-blue” technologies, which include cyberspace, information technologies, and artificial intelligence, China is one of the front-runners in super computer technology, and modern cyberspace information security will be the key content of 15 major projects. Security of virtual space is also significant to national interests.

“Deep-earth” technologies include not only technologies of deep-earth mineral and energy resources exploration, but also technologies of urban space utilization and disaster reduction. Geological understanding is an important issue. On the one hand, it concerns an underground pipe network and basic infrastructure during urban development. On the other hand, it relates to the exploration and utilization of crucial national strategic resources.

Xi Yanchun:

Now, today’s policy briefing is over. We can see that reporters are concerned about technological innovation, which indeed deserves our constant attention. Thank you all.