Developing New and High Technology Industry and Promoting Sustained Development of Economy

Ministry of Science and Technology

March 16, 2000

The year of 1999 witnessed the further progress of economic and social development nationwide. Meanwhile, national science and technology industrial parks (STIPs) maintained momentum of rapid development. According to statistics, 53 STIPs produced a revenue of 656 billion yuan in 1999, up 35.7% compared with that of last year; generated output value of 566 billion yuan, up 30.6% . The anticipated goal set in the Ninth Five Year Plan has been fulfilled one year ahead of the schedule. In the same year, STIPs made the profits of 35.6 billion yuan and contributed tax of 27.5 billion yuan. Their foreign exchange earned through export shot up to 10.6 billion dollars. An additional 2000 enterprises were established in 1999 and the total number of enterprises inside STIPs has added up to 17900. 800 of these enterprises have an output value above 100 million yuan, while last year there were only 678 enterprises of the kind. The statistics eloquently demonstrate that a large number of high-tech enterprises have achieved rapid growth by utilizing the good environment of STIPs. Now STIPs are turning into a base of new and high-tech industry development in the fields of electronic information, new materials, biological engineering, optical-mechanical-electronic integration, new energy and environment protection.

The National Technology Innovation Conference in Aug. 1998 marked a milestone of integration of Science & Technology and economy in the process of national modernized construction. From then on, a system of innovation at both national and regional levels has been well under way. Moreover, progress has been made under the guidance of Ministry of Science & Technology since the Conference in the fields of developing STIPs, turning research institutes into enterprises, establishing high-tech enterprises, managing Innovation Fund for small and medium sized enterprises, promoting the development of business incubators, building bases for high-tech products oriented to export and managing venture capital.

------ In order to implement the State Council's "Resolution on Strengthening Technology Innovation, Developing new and High Technology and Realizing Industrialization", Ministry of Science & Technology staged Suggestions on Promoting the Further Development of STIPs and formulated Assessment Standards System for STIPs. In this way, the guidance and management of STIPs will be strengthened and more support granted to the construction and development of key STIPs such as Zhongguancun.

------ In line with the requirement of State Council , management of Innovation Fund for Technology-based Small and Medium Sized Enterprises is under way. Since June 1999 to Jan 2000, 1660 projects have been appraised and bade within 3331 projects for appraisal and biding. 607 projects have been ratified by Ministry of Science & Technology and Ministry of Finance. Supporting fund amounts to 750 million yuan.

------ At present high-tech innovation service center (business incubators) count more than 100 nationwide, and play an increasingly important role in the process of industrialization of high technology. Last December, Ministry of Science & Technology convened the National Working Conference on High-tech Innovation Service Center. At the Conference, lines and goals for development of innovation service centers were formulated. In the future, the development of innovation service centers will follow the road of multi-channels of investment and take on various forms. Large and medium sized enterprises will be established incubators for smaller ones. Professional incubators such as software technology incubators will come into being.

------To implement the strategy of rejuvenating trade through Science & Technology, one of the important strategies of Ministry of Foreign Trade and Economic Cooperation (MOFTEC), Ministry of Science &Technology worked together with MOFTEC and mapped out the Action Program for Rejuvenating Trade Through S&T , give full play to our advantages in Science & Technology and industry and expand export of high-tech products. According to the identified Methods for STIPs staged by the two Ministries, both Ministries have appointed 16 STIPs in Zhongguancun(Beijing), Shanghai, Tianjin, Shenzhen, Xi'an, Suzhou, Wuxi, Dalian, Harbin, Wuhan, Weihai, Hefei, Qingdao, Guanzhou, Zhongshan, Xiamen as the first export bases of high-tech products. Besides, to support the encouraging policy for export of high-tech productions, Ministry of Science & Technology together with MOFTEC worked out the Catalogue of China’s New and High-tech products, which will guide enterprises in quickening their steps of adjustment of product mix and help the management of export of high-tech products moving in a more standard, more scientific, and more efficient way.

-----The year 1999 witnessed the rush of venture capital in China, therefore, it was called the Year of venture capital. Ministry of Science & Technology on the basis of previous work has explored into policies on venture capital and discussed the methods of standardizing the management . Many STIPs and business incubators have started small scaled risk investment. Some returned students from abroad established enterprises with international venture capital. In line with the requirements of the Resolutions, Ministry of Science & Technology together with six related departments and commissions worked out the Suggestions on Promoting the Development of Domestic Risk Investment last November, which has now been circulated around by State Council. What we will do is to unite the effort with other departments to implement this document.

Early this year, President Jiang Zemin went on an investigating tour in Zhongguancun and Shenzhen, paying great attention to the development of STIPs. Premier Zhu Rongji also raised the requirement of doing a good job in running STIPs in the Government Report at the Third Plenary Session of Ninth National People's Congress. Development of STIPs will be integrated into the adjustment of national economic structure and the development of the West China. To meet the requirement of national long and medium term strategies, development of STIPs should be planned in a comprehensive way and in a rational layout. Efforts should be made to produce projects of independent intellectual property rights. Ministry of Science & Technology will continue to follow the model of"three in one" (integrating high-tech innovation service centers, STIPs and industrial belts into one), promote the adjustment of industrial structures so as to enhance the competitiveness of China in international market and realize the sustained and rapid development of domestic economy.