700 { China’s Quest
The core of the MLP was specification of programs and goals in eleven key
sectors: energy, water, and mineral resources; the environment; agriculture;
manufacturing; transportation; information and services; population and
health; urbanization; public security; and national defense. Within these sec-
tors, there were sixty-eight priority areas, with expected technology break-
throughs specified. The MLP also laid out sixteen mega projects, listed in
Figure 25-5. Very generous funding was poured into these projects. Between
2000 and 2008, total spending on S&T grew by 289 percent, while spending
on research and development increased by 315 percent.^52
Ironically, perhaps, the MLP included a large web of policies intended to
procure foreign inputs for China’s drive for “indigenous innovation.” Chinese
firms were expected to “re-innovate” advanced technology imported from
abroad. Such machinery was not merely to be utilized for production, but
researched and mastered at a basic level. The foreign technology would then
be “evolved” and changed and improved in some way, thereby “re-innovat-
ing” it. Such “re-innovated” and “evolved” technology would gain a Chinese
patent and no longer need to pay intellectual property fees to foreign firms.
“Indigenous technology” was defined as technology in which the ownership
and intellectual property right was in Chinese hands. A mix of tax breaks,
subsidies, and low-cost loans, plus exclusive or priority eligibility for pro-
curement by government agencies, encouraged Chinese firms to comply with
these objectives. China’s patent rules were modified to make it more diffi-
cult for foreign firms to sue Chinese firms for IPR violations. A 2009 revi-
sion of China’s patent law was intended to promote indigenous innovation1 core electronic components, high-end chips and software
2 large scale IC manufacturing equipment and techniques
3 new generation broadband wireless mobile communication networks
4 advanced numeric-controlled machinery and basic manufacturing technology
5 oil and gas exploration: high precision seismic exploration; deep sea drilling
6 advanced nuclear reactors: 3rd generation pressurized water and gas cooled
7 water pollution control and treatment: prevention & remediation
8 genetically modified organisms: agriculture
9 Pharmaceuticals: capacity test efficacy & safety of drugs
10 control & treatment AIDS, hepatitis, etc.; independently develop vaccines
11 large aircraft: key production technologies, power and testing systems
12 earth observation system: satellites, aircraft; high definition; space data
13 Manned spaceflight and lunar probe; orbiting laboratory; moon orbital exploration
14 –16 classified: presumed to be military projects
FIGUR E 25-5 16 Megaprojects Under 2006-2020 “Indigenous Innovation” MLP
Source: James McGregor, China’s Drive for ‘Indigenous Innovation,’ A Web of Industrial Policies, Global
Regulataory Cooperation, US Chamber of Commerce. July 2010?, 40–42.