PROMOTING A GREEN AND SMART DEVELOPMENT
WITH INNOVATION
---Speech by Ambassador/Dr. Yu Hongjun, President of China Center for
Contemporary World Studies
October 18th, 2011, Madrid, Spain
Respected Chairman,
Ladies and gentlemen,
Good afternoon!
Co-hosted by Spain Ideas Foundation for Progress and Center for American Progress, Global Progress Conference convenes at just the right time. The theme of the conference –“Opportunity, Innovation, Youth” – provides a good platform for us to think about and discuss the development tendencies of human society at a strategic level, from a long-term perspective and with a global vision. I would like to avail myself of this opportunity to share my views on the topic of “Revitalizing Industry and Innovation”.
Three years have passed since the international financial crisis broke out. The recovery of global economy, rife with all sorts of uncertainty and instability, has not been smooth. With the world economy entering a new round of adjustment, developed countries as well as emerging economies and vast developing countries have to face the challenges of improving development models, boosting economic growth, achieving comprehensive employment, realizing social justice and maintaining social stability, etc. Increasingly aware of the adverse impact of excessive dependence on financial industry and negligence of substantial economy, countries have begun to adjust their respective development strategies so as to enhance their adaptation to globalization. The United States is carrying out its strategies of “Reindustrialization” and “New Energy”. Japan is shifting its economy to the model of “demand-guided growth”. The newly released Europe 2020: A European Strategy for Smart, Sustainable and Inclusive Growth is a strong indicator that European countries pay great attention to strengthen their “green competitiveness”.
In this context of Global Reflection on development models, Chinese scholars and experts are also undertaking research and exploration in a comprehensive and in-depth manner. Looking back on the reform and opening-up of over three decades, we Chinese have come to realize -- more clearly than ever before – that the imbalance as well as inharmony and unsustainability in our social economic development are still prominent. There is no time to delay for China to transform its development model and enhance the quality of economic growth. Industries are the foundation for economic development. One arduous task for China to transform its development model consists in upgrading, modifying and restructuring its industries. In light of this, China is now working in three dimensions. Firstly, through modifying and upgrading its traditional industries by means of modern technology, especially leapfrogging its manufacturing industry, China is trying to turn “Made in China” into “Created in China”. The productivity of China’s manufacturing is only equal to 4.38% and 5.56% that of US and Germany respectively. With such a low productivity, manufacturing has contributed one third of China’s GDP, taking up 90% of its total export. It is necessary for China to enhance the overall competitiveness of its manufacturing. Secondly, China is adjusting its industrial structure, giving priority to service industry, especially giving rise to such novel types of services as modern logistics, design consultation, e-commerce, etc. The last five years witnessed an annual growth rate of 11.9% in China’s service industry. However, representing only 43% of China’s GDP, the service industry still has remarkable potential for development. Thirdly, China is putting more efforts into the development of emerging strategic industries, committing itself to a green, low-carbon and sustainable mode of industrial development. Currently, much is being done to promote such industries as energy conservation, environmental protection, IT and network, biological pharmacy, new energy, new materials and so on. By 2020, emerging strategic industries are supposed to represent 15% of China’s GDP.
Both upgrading industries and developing new strategic industries require strengthening the innovative capability and vigor of the enterprises. Innovation is essential to revitalize industries. At present, the contribution of progress in science and technology to China’s economic growth is 25-30% lower compared with developed countries. China’s dependency on foreign technology is as high as 50%, with the US and Japan’s dependency being lower than 5%. In this gap lies our potential. China is trying to construct a national innovation system. Firstly, China is constructing a technical innovation system that helps to pool the industrial, academic and research resources, with the enterprises acting as the mainstay, the market as the orientation. The conversion rate of scientific and technological achievements in China is around 25%, with less than 5% being industrialized in reality. This is much lower than the conversion rate of 80% in developed countries. Secondly, China is scaling up its investment on science and technology. Focusing on the development frontier in science and technology of the world, China concentrates its resources to make breakthroughs in key technologies. In the next five years, China’s spending on research and development will go up from 1.75% to 2.2% of its GDP. Thirdly, China firmly follows the strategy of national intellectual property rights, stimulating the innovation of the whole nation. By 2010, the registered patents in the People’s Republic of China numbered 5.852 million. Fourthly, China gives priority to education, cultivating innovative people. In China, many people now ask such a question: Where is China’s (Steve) Jobs?
Ladies and gentlemen, China can not develop in isolation from the world. The development of the world needs China. The industrial revitalization and transformation in China goes on in the context of opening-up, which is long-term, full-scale and mutually beneficial. We believe that narrow-mindedness and all types of protectionism can only stem innovation, undermining the human resources and eventually neutralizing the competitiveness of enterprises and the nation. Presently, domestic demand has become the primary driving force for China’s growth, contributing more than 90% to the whole economy. To increase import has become China’s established strategy, therefore offering significant opportunity for countries all over the world. The prospect of cooperation in revitalizing industries and promoting innovation between China and the world is greatly encouraging.
In the next few decades, nearly half of the world population will gradually enter modernization, remarkably bringing up demands of energy and resources while imposing great pressure on the ecological environment. To cope with all these severe challenges confronting the world, we are supposed to promote the economy with innovation so as to achieve a greener and smarter development. But revitalizing industries and promoting innovation is a difficult, tortuous and sometimes even bitter process, in which confidence, solidarity and cooperation are of critical importance. The well-known navigator Christopher Columbus once remarked: as long as we keep the continent of hope in our hearts, storms will definitely be overcome. China is confident in its own development and the world’s future. We are willing to join hands with all the progressives to meet the challenges!
Thank you!