Emergence as a Global Economic Power } 699
The Push for “Indigenous Innovation”
In 2002, a new leadership team of General Secretary and paramount leader
Hu Jintao and Premier Wen Jiabao launched a push to accomplish a major
upgrading of China’s capacity for “indigenous innovation.” Responding to
many of the complaints raised by economic nationalists over the previous
years, and especially after the flood of FDI into China following WTO entry,
Hu and Wen elaborated a network of policies intended to transform China
into a technological power house by 2020 and into a global leader in tech-
nology by 2050. In October 2005, the Politburo declared “indigenous inno-
vation” to be a strategic equivalent equal to Deng’s policy of opening and
reform. Those earlier policies had been correct and would be continued and
expanded, the Politburo concluded. But the older approach would now be
paralleled by a systematic effort to turn the PRC into a global leader in tech-
nological innovation. The goal was to shift economic growth from reliance
on import of foreign capital equipment and technology to Chinese innova-
tion and development of those things. Reliance on foreign technology for
production was to be reduced from an estimated 60 percent in 2006 to 20
percent by 2020.
In 2003, Wen Jiabao took over leadership of the Leading Group for Science
and Technology with responsibility for MOST and CAS. Wen ordered the
creation of twenty working groups involving CAS, MOST, the Ministry of
Information Industry and Technology (MIIT), the Ministry of Education,
the Ministry of Finance, and the China Development Bank, one of China’s
four policy banks. The working groups were charged with devising policies
to accelerate domestic technological innovation. Clashing points of view
regarding the scope of state control soon developed in these groups. Many
scientists, including overseas ethnic Chinese recruited to the working groups,
favored allocation of funds on the basis of peer review of research proposals
by panels of scientists, to include foreign scientists—as was commonly done
in the United States. Most funding would go to small-scale, individual-driven
research projects. This arrangement, its advocates asserted, would channel
resources to projects with the greatest potential for genuine innovation.
State officials, on the other hand, tended to favor government selection of
large-scale strategic projects which would then receive very substantial fund-
ing. Eventually, this debate began to leak into the media, and MOST stepped
in to take control of and resolve the debate. The decision was in favor of the
state guided “mega-project” approach. MOST together with MIIT drafted
a National Medium and Long Term Plan for Development of Science and
Technology, which became known at the Medium and Long-range Plan
(MLP). The plan was to run through 2020. Formally promulgated in 2006,
the MLP said that China’s “weak innovation capacity” was to be overcome,
transforming China into a leading innovation power.^51