China National Science

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China National Science Technology Industrial
Parks and Innovation Clusters

• Dr. Gui LIANG
• Torch High Technology Industry Development Center
  
• Ministry of Science Technology, P. R. China

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Contents
I. BackgroundThe Changing China II. STIPs in
ChinaPolicy Review Current Situation III.
Innovation Clusters The Developing STIPs in
China IV. Road to Future
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I. BackgroundThe Changing China
Gov. Initiative Foreign Investment Made in
China
Business Independent Innovation Created in
China
National Strategies Since 80s
Overview
78 Costal Cities 91 STIPs 99
Western Development 03 North-east 04
Central Areas
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I. BackgroundThe Changing China
Gov. Initiative Foreign Investment Made in
China
Business Independent Innovation Created in
China
Independent Innovation

• Made in China No. 1 Manufacturer and Exporter in
  most industries
• Toys 70
• Shoes 50
• Color TV 45
• Air Conditioner 30
• Textile 24

Tech
Policy
Talents
Created in China
Trade Volume/GDP 60(03) 64(05) Excessive
investment into processing trade (OEM), resulting
in, labor, land and resources intensive lower-end
products
Capital
Market
Adjustment of Industrial Construction Moving up
to higher end in the Value Chains
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II. STIPs in ChinaPolicy Review Current
Situation

• 1.Why STIPs
• Breakthrough difficulties of lower-end
  manufacturing clusters
• Limited areas selected to concentrate policies
  and resources to congregate higher-end value
  chains to realize the breakthrough
• To promote the transformation of technology
  results and encourage indigenous innovation and
  entrepreneurship
• To promote the commercialization of new
  high-tech achievements, the industrialization of
  new high-tech products and the
  internationalization of new high-tech
  industries (China Torch Program)
• The goal of STIPsInnovation clusters

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II. STIPs in ChinaPolicy Review Current
Situation

• 3. STIPs-Milestones
• 85 1st STIP in Shenzhen
• 88 1st National STIP in Zhongguncun, 18
  policies
• 91 26 National STIPs approved
• 92 25 National STIPs approved
• 97 The 53rd National STIP (agricultural,
  Yangling, Shannxi)
• 07 The 54th National STIP (Ningbo)

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II. STIPs in ChinaPolicy Review Current
Situation
To construct the STIPs is the most important
pioneering work in the 20th century.
----Jiang Zemin
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II. STIPs in ChinaPolicy Review Current
Situation

• STIPs-Favourable locations
• 29 in central cities with intensive intellectual
  resources and sound industrial bases
• 13 in coastal cities with better conditions of
  opening-up to outside world
• 12 in the cities with intensive military
  industries and traditional industrial bases.

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China II. STIPs in ChinaPolicy Review Current
Situation
Shenzhen Science Technology Industrial Parks
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II. STIPs in ChinaPolicy Review Current
Situation

• 4. Latest Policies
• Income tax exemption for first 2 years since
  profit-making and a reduced tax rate at 15 for
  the 3rd year on
• Exemptions of operation, income, property and
  land use taxes within a certain period for
  ratified Technology Business Incubators and
  National University Science Parks
• Pilot OTC system in Zhongguancun for unlisted
  high-tech companies

PPC
TT
IRC
Overseas Science Parks
Incubators (Uni. Parks)
Accelerators
STIPs
Start-ups
Gazelle
Large corps
Innofund
Roadmap Scheme of SME Growth
Business Angel
Venture Capital
Capital Market
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II. STIPs in ChinaPolicy Review Current
Situation

• 5. Management Features
• The management agency of STIP is normally
  featured by
• An administration organization authorized or
  delegated by the local government
• Small government with extensive services,the
  staff is only 1/4-1/10 of government agencies at
  same level
• Independent fiscal system and policy-makers
• Overall design and infrastructure constructor of
  the park
• One-stop services to solve various problems met
  by tenant companies
• Key tasksenvironment building (soft hard) and
  economic development

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STIPs in ChinaPolicy Review Current Situation
Billion Euros
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STIPs in ChinaPolicy Review Current Situation
Billion Euros
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STIPs in ChinaPolicy Review Current Situation
Billion Euros
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III. Innovation Clusters The Developing STIPs in
China

• Apparent conglomeration of higher-end industries
• 1300 industrial clusters all over the country
• STIPs have attracted quite a number higher-end
  clusters in the sectors of hi-tech service,
  software, IC, new energy, bio-pharmaceutical,
  optical-telecom, etc.
• Typical clusters
• Zhongguancun(Beijing) Creative software
  industry
• Donghu(Wuhan) optoelectronics
• Zhangjiang(Shanghai) IC and pharmaceutical
• Tianjin biotech and new energy
• Shenzhen telecommunication
• Zhengzhou Super-hard materials

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III. Innovation Clusters The Developing STIPs in
China

• The technology innovation system is forming up
• Human resources The STIPs have attracted
• 560,000 technological people
• 52,103 master graduates,
• 9,358 PHDs
• 5,615 returned overseas scholars
• 1, 330,000 college graduates (accounting for 1/3
  of 4 million employees in all national STIPs)
• More than 250 Technology Business incubators and
  a batch of postdoctoral working station have been
  sep up
• RD Strength
• RD investment 8 times higher than national
  average
• RD investment per capita 6 times higher than
  national average

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III. Innovation Clusters The Developing STIPs in
China

• The technology innovation system is forming up
  (Cont.)
• Closer cooperation between university, research
  institutions and STIPs
• Local Innofund and VC Fund of funds are being set
  up in STIPs
• Networking such as industrial technology
  alliances are coming forth
• International cooperation prevalent
• Challenges The gap with Innovation Clusters
• Conglomeration and Cluster
• Clusters and Innovation Clusters

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IV. Road to Future

• Strengthening the capacity of independent
  innovation and building an innovation-based
  country- A national target proposed by the
  central government at the beginning of 2006.
• A technological innovation system is to be
  established within which
• The enterprises will be the main players
• The market-orientation will be kept and
• The cooperation between industry, educational and
  research side
• will be strengthened

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IV. Road to Future

• The Compendium of the National Long Term Science
  and Technology Development Plan (2006-2020) and
  its supplementary policies will facilitate the
  establishment of the technological innovation
  system by improving the overall conditions
• RD Investment
• Tax Incentives
• Financial Support
• Government Purchase
• Re-innovation based on absorbing new technology
  from abroad and independent digestion
• Creation and Protection of Intellectual Properties

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IV. Road to Future Policy Improvement Network
Building

• To improve the policy environment of STIPs
• Preferential fiscal and financial policies
• Intellectual Property Protection
• Government Purchase
• To construct the service networks (which are the
  key part to promote the development of
  innovation clusters)
• To attract intermediary service providers into
  the parks
• To construct the information service network
• To set up various business associations and clubs

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IV. Road to Future Promoting Interaction
Partnership

• 3. To promote the cluster-model innovation
  activities
• The soul of the innovation clusters is the
  clustering innovation among the enterprises and
  so we have to
• Support the leading business and nurture SMEs to
  bring
• into full play of their respective innovation
  advantages.
• Increase the investment into guiding fund to
  attract more
• social capital to sustain the long term and
  continual innovation
• Attract and train the high-end professionals to
  ensure the non-
• exhausted innovation headspring
• Encourage the inner and outer cooperation
  between the
• businesses, universities and research
  institutions to integrate
• them into an interest community
• Set up various industrial technology alliances
  industry to
• break up the common technology barriers

Ind. Edu. Res.
Technology
Policy
People
Innovation Clusters
Capital
Market
Industrial Alliances
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IV. Road to Future Strengthening International
Cooperation

• 4. To establish service platforms for
  international cooperation
• Innovation clusters are an open clusters and the
  international capital, technology, human
  resources and information are all the propelling
  power for their development and growth.
  Therefore, all the STIPs in China are
  establishing various service platforms to make
  full use of the international innovation
  resources including capital, technology,
  information and talented people.

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Thank you!
Website www.ctp.gov.cn E-mail gliang_at_ctp.gov.cn
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Chinese Industrial Clusters in Global Value Chains
Lower-end locked-up
Market control
Globalization
Technology Control
The advancing trend of lower-end clusters is
declining and breakthrough up to the higher end
is hard to realize with own power of the
enterprises
Regionalization
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Cluster is the hotbed for innovation- the
nonlinear model of Innovation
(B. Klein and N. Rosenberg)
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Innovation clusterThe reason for existence and
goal for development of STIPs in China

• An innovation clusters is a pool of innovation
  resources. The highly efficient operation
  mechanism resulted from long-term competition and
  cooperation as well as the ever-improving
  innovation circumstance makes it possible for an
  innovation cluster to continuously attract
  innovation resources including talents and
  capital, etc.
• An innovation clusters is a network within which
  various innovation players are linked via value
  chain or industrial chain. Competition and
  cooperation makes the players more and more
  synchronized and a symbiotic ecosystem is
  gradually established.
• An innovation cluster is an interest community.
  The enterprises in the cluster compete with each
  other to obtain the maximum benefit within the
  cluster and this small competition is usually
  temporary while the unified competition with
  external industrial counterparts is to dominate
  the higher-end of the global value chain and such
  competition is for survival and permanent.
• An innovation cluster is the headstream of
  innovation. The players in the cluster share the
  new technology and products brought out by the
  revolving process of combination, communication,
  cooperation and competition.
• An innovation cluster is an innovation-oriented
  opening society, The innovation culture is
  gradually rooted in the cluster by the
  convergence of innovative and entrepreneurial
  spirits of the players. As a result of the moving
  in and moving out of the different players driven
  by this culture, the cluster becomes a vigorous
  innovation headstream.

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Current Status of Major Regions in China

• Western
• Area 71.6
• Population 370 million(28.7)
• Main Features
• (1)unfavorable natural conditions ,
• most poverty population
• (2)highest rural population proportion
• (3)more than 50 minorities (more than
• 80 of total minority population
• (4)few and far between,inconvenient
• economic connections
• (5)upriver of Yongtse, Yellow River, ...,
• eco-safety of the whole country
• (6)rich in energy and mineral resources

• North-east
• Area 8.2
• Population 110 million (8.3)
• Main Features
• (1)rich land resources and favorable
• for agricultural production
• (2)lowest rural population proportion
• (3)old industrial bases facing
• challenges of exhausting
• resources
• (4)good industrial conditions, large
• reserve of talented people, well
• developed infrastructure
• (5)SOEs important,facing
• constructive problems

• Central
• Area 10.7
• Population 360 million (28.2)
• Main Features
• (1)Fertile soil,major agricultural
• production and output bases
• (2)traditional culture stressing
• agriculture while restraining
• industry and despising commerce
• (3)industrial bases of various scales
• formed in some areas
• (4)impacted area, convenient
• economic connections easier
• market support for industrial growth
• (5)higher proportion of agricultural
• population than national average but
• lower than western areas
• (6)absolute poverty basically eliminated
• and therefore development has