“The Strategy reinforces official sloganeering that China must control foreign-owned ‘core technologies’ in integrated circuits, large-scale software, and core hardware components. China’s backwardness in these technology building blocks is listed among China’s most ‘prominent challenges.’
Beijing previously sought to adopt ‘core technologies’ through joint ventures and partnerships with leading foreign tech companies, as well as to spur ‘indigenous innovation’ by Chinese enterprises to reduce reliance on foreign suppliers. As many leading Chinese companies have moved closer to the technology frontier, the Chinese government has intensified its focus on encouraging a shift to domestic ‘core technologies.’ In 2014, for instance, Chinese authorities set up a $21.3 billion National Integrated Circuit Investment Fund to boost the country’s IC (integrated circuit) sector. This new Strategy indicates that the Chinese government intends to continue to pursue these types of initiatives.
The Strategy also promises additional efforts to strengthen China’s research and development ecosystem by improving coordination of research activities of universities and research institutes, and integrating these efforts with enterprise-based innovation activities. The Strategy specifically identifies a number of priority areas including mobile internet technologies, cloud computing, big data, and the Internet of Things (IoTs).
Since the release of this Strategy in late July, China has also released a 13th Five Year Plan for Research and Development that aims to increase spending on R&D to 2.5 percent of GDP by 2020 to further stimulate innovation. In 2015, China spent 2.1 percent of GDP (approximately $210 billion) on R&D.”
