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Issue 40, November 2011

This newsletter is a monthly supplement to ChinaAnalysis.Com, a new website that aims to promote knowledge sharing in China-related analysis. This newsletter contains original content and may not be reproduced without exclusive written permission. If you have any questions, comments and suggestions, please email support@chinaanalysis.com.

ChinaCompass - China’s 12th Five-Year Plan for Innovation

2011 is the first year of China’s 12th five-year plan (2011-2015), and as usual, Chinese government ministries have published their implementation plans in accordance with the overall plan for the upcoming five years. In August, the Ministry of Science and Technology published its implementation plan. In September, the National Science Foundation of China did so as well, highlighting its new funding priorities. Taken together, these two documents outline China’s strategy for the next round of innovation that will drive the nation’s long-run growth and make it an even greater force in the global economy.

Although a five-year plan sounds like a relic of an old-style planned economy, the Chinese state uses it as a powerful instrument for resource allocation. In particular, science and technology development is an area where the state explicitly uses its visible hand to push Chinese industry to “catch up” with world leaders. Under the 11th five-year period (2006-2010) in which for the first time the country officially embraced the national strategy of “Indigenous Innovation”, China had breakthroughs in manned aerospace, high-speed trains, and supercomputer among a series of state-planned mega science and technology projects. Now China has the confidence and resources to push its research and development efforts even further. Look for the 12th five-year plan to unleash a number of new high-impact technologies.

Indeed, the Ministry of Science & Technology is setting the goal high (Figure 1). The country will simultaneously push the development of cutting-edge technologies in areas such as multi-purpose microprocessors, System-on-a-Chip (SOC), computer operating systems, semiconductor manufacturing, next-generation wireless network, CNC machine tools, large oil and gas field exploration, nuclear power generation, water pollution control and treatment, genetically modified food production, medical innovation, HIV and Viral Hepatitis treatment, and aeroplane manufacturing. It is not likely that China will succeed in all these areas, but any breakthroughs the country makes will challenge the technology dominance of many of the world’s most powerful multinational companies.

Meanwhile, the country is strategically betting on a set of emerging technologies that the state believes will give birth to the leading industries of tomorrow. These technologies include energy-saving materials, next-generation information technology, biotechnology, high-end equipment manufacturing, new materials, alternative energy, new energy vehicles, etc. Note that these technological objectives are not vague concepts; each of these plans focuses on specific technologies and goals. For example, in the next-generation information technology area, China is targeting display technology, 100 Mbps standard national high-speed internet, and cloud computing. In the alternative energy area, China’s goals are building smart grids, wind-energy fields, and solar panel manufacturing and R&D capabilities.

Figure 1. China’s science and technological goals under the 12th five-year plan: key indicators




R&D investment as percentage of GDP



R&D personnel per10,000 workforce person-years



Science journal citation world ranking  



Number of patents received per 10,000 population 



Patent applications per 100 R&D workforce person-years



Value of technology market transactions nationwide (billion yuan)



High-tech value-added as percentage of manufacturing as whole



Percentage of all citizens with basic science qualifications



Source: MoST’s 12th Five-Year Plan for S&T Development

Top News of Last Month
Oct 12 US Senate approves bill aimed at China's currency policy
Oct 16 China surpasses US as EU's top trade partner
Oct 18 China economy grows at slowest pace in 2 years
Oct 18 Guangzhou tops Forbes China's best places for business list
Oct 24 China to increase punishment for violations of work-related illness law
Oct 25 China to simplify foreign exchange rules in trading of goods
Oct 25 China minimum wage up by a fifth
Oct 28 China unveils supercomputer based on its own chips
Oct 29 China legally defines terrorist acts, organizations
Oct 31 China's Hu kicks off Europe visit, amid euro crisis
New Books
As China Goes, So Goes the World: How Chinese Consumers Are Transforming Everything

By Karl Gerth

“In this revelatory examination of the most overlooked force that is changing the face of China, the Oxford historian and scholar of modern Asia Karl Gerth shows that as the Chinese consumer goes, so goes the world. While Americans and Europeans have become increasingly worried about China's competition for manufacturing jobs and energy resources, they have overlooked an even bigger story: China's rapid development of an American-style consumer culture, which is revolutionizing the lives of hundreds of millions of Chinese and has the potential to reshape the world. This change is already well under way. China has become the world's largest consumer of everything from automobiles to beer and has begun to adopt such consumer habits as living in large single-occupancy homes, shopping in gigantic malls, and eating meat-based diets served in fast-food outlets. Even rural Chinese, long the laggards of consumerism, have been buying refrigerators, televisions, mobile phones, and larger houses in unprecedented numbers. As China Goes, So Goes the World reveals why we should all care about the everyday choices made by ordinary Chinese. Taken together, these seemingly small changes are deeper and more profound than the headline-grabbing stories on military budgets, carbon emissions, or trade disputes.” – from Macmillan, October 2011


By Barbara Xiaoyu Wang and Harold Chee

“With the accelerating integration of China into the global economy, there is a thirst to understand how Chinese managers like to lead and how Chinese employees like to be managed. There is no doubt that China can be a difficult and risky market for foreign businesses. The authors show managers how to succeed when doing business in China.” – from Macmillan , October 2011
Cultures of Knowledge: Technology in Chinese History

Edited by Dagmar Schäfer

“Looking at knowledge transmission as a cultural feature, this book isolates and examines the individual factors that affect knowledge in the making and created uniquely Chinese cultures of knowledge. The volume is organized into four sections: Internode, Imperial Court, Agora, and Scholarly Arts. Each has a theoretical introduction, followed by two core contributions from experts in Chinese history. The section concludes with a 'reflection' by a historian of Western Technology who scrutinizes each sphere and identifies the points that reflect universal technological experience. ” – from Brill, October 2011
Upcoming Events
Nov 05 - Nov 08 International Workshop on Innovation and Commercialization of Micro & Nanotechnology
Nov 10 - Nov 11 Payment Innovation (China) Summit 2011
Nov 16 - Nov 21 China Hi-Tech Fair ELEXCON 2011
Nov 30 - Dec 01 IPARM China Summit 2011
Dec 29 - Dec 31 4th International Conference on Strategy and Marketing

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