National High-tech Industry Development Zones

Qian JinqiuTorch High-Tech Industry Development Center,

Ministry of Science & Technology

EU S&T Counselors Meeting EU S&T Counselors Meeting Dec. 8, 2008 Dec. 8, 2008 BeijingBeijing

Outline Background Milestones Current Status

Achievements Future Strategy

Birth: August 1988 Nature: A national guideline program Aim: To promote the

commercialization of high-tech achievements, the industrialization of high-tech products and the internationalization of high-tech industries

Executive Agency: Torch High-Tech Industry Development Center

Background: Torch Program

Missions

High-TechIndustrialization

&Environment

Building

Policy Support National High-tech Industry Development Zones High-Tech Innovation Service Center (Incubators)Torch Program Projects Torch Program Software ParksTorch Program Specialized Industrial Bases Innovation Fund for Technology-based SMEs Internationalization Training

Background: Torch Program

1985, Shenzhen Science and Technology Industrial park set up jointly by CAS and Shenzhen Municipal Government 1988, Beijing New Technology Industry Experimental Zone was approved by State Council with 18 preferential policies. 1991, the State Council approved in March to set up National High-Tech Industry Development Zones and promulgated related preferential policies; 26 zones approved to be established 1992, another 25 zones approved 1997, Yangling Agricultural High-tech Industry Demonstration Zone approved 2005, Premier Wen Jiabao put forward the “Four-in-one“ positioning as the development goal for national high-tech zones 2007, Ningbo high-tech Park was approved as the 54th national high-tech zone

Milestones

Geographic Layout 29 zones located in central

cities with intensive intellect and good industrial base

13 zones located in coastal cities with good opening-up conditions

12 zones located in traditional industrial cities with intensive military enterprises

Current Status

Administration Scheme Ministry of Science & Technology: overall management & operational guidance Provincial S&T Commission: high-tech enterprise identification Local government of host city: immediate leader & supervisor, policy and financial support The Administrative Committee :

Administrative body authorized or delegated by local government Independent fiscal system and policy-makers Environment building (soft & hard) and economic development Overall design and infrastructure construction ； ‘One-stop’ services to tenant companies

Current Status

Current Status Differences with other zones

The Special Economic Zones: large comprehensive reform trial zones enjoying legislative power and the special jurisdiction

The Economic and Technical Development Zones: opening windows with preferential policies to attract FDI to boost local economy and promote export investment type-based policy to learn from foreign advanced technology and management experience,

The New & High-tech Industry Development Zones: Mainly relying on domestic S&T strength and industrial foundation to optimize Local environment for tech-based business creation and development Developing high-tech industry with independent IPRs, upgrading traditional industries and optimize industrial structure realizing sustainable growth of national economy

Achievements ( I ) Main drivers for sustainable & strong economic growth

average annual growth rate of major economic indices: 44% (1992-2007) total output value : 1757.4 billion Yuan, 7.1% of national GDP (2007’) average industrial output per capita: 710,000 Yuan, 6.23 times of national average industrial value-added per square kilometer land: 700 million Yuan 33 zones contribute more than 20% of local industrial added-value

2.6%3.2%

4.0%4.5%

5.0%5.8%

7.1%

0%1%2%3%4%5%6%7%8%

2001 2002 2003 2004 2005 2006 2007

GDP Contribution from National High-tech Zones (2001-2007)

Zhongguancun Before Zhongguancun Now

Achievements ( II ) Major bases of technology innovations

R ＆ D expenditure: 134.88 bn Yuan RMB, 9% of GDP. 49,000 invention patents with 7.5 pieces held by per 1,000 people Converging areas of R&D institutions & innovation platforms

278 Universities 255 National Engineering Research Centers 360 Open Labs 251 Industry Technology Testing Platforms 102 Technology Transfer Centers

talent pools of innovation personnel R&D and technological personnel: 1.2 million (18.5% of all employees) Including 29,000 doctors, 216,000 masters and 280,000 overseas

returned students.

Achievements ( III ) Important bases for hi-tech industry development

32,347 hi-tech tenant enterprises which generated 33% of the national hi-tech industrial output 605 listed companies in stock market Higher-end industries develop vigorously Burgeoning Industries continues to emerge

84.5

68.3

4.9 4 2.72.43.53.815.1

63.8

76.9

16.5

-8

2

12

22

32

42

52

62

72

82

92

TotalIncome

IndustrialOutput

Value Added Net Profit Tax Paid Export($)

20062007

RMB (10k) Per Capita Economic Indicators of National High-tech Zones

Cradle of High-tech Companies

From “Made in China” to “Created in China”

XXXIC

Bio-pharm

New Materials

Zhangjiang: International-leading technologies Zhongguancun: 1/3 IC designs in China; products from “Loongson” , “Vimicro“, etc. entered international market

Zhangjiang: 25 international patent applications and 40 National first-grade new medicine applications；Changchun: 40% domestic market share of Hepatitis vaccine and No. 1 Interferon suppository production capacity in China

Zhengzhou: 60% domestic market share of super-hard materialsChangsha: cobat-acid lithium battery material sales ranks 3rd in the world and 1st in the country; National first-grade invention award for high performance carbon composites

Xiamen: World leading production base of flat color TV ；Wuhan: 50%, 40% and 50% domestic market of optical fiber cable, optoelectronic devices and laser products respectively

Higher-end Industries

Photovoltaic

Burgeoning Industries

XXXContract Research

Creative Industry

Animation

Zhongguancun: nearly 1/3 of the country’s bio- medicine contract research resources

Zhangjiang: the largest and most professional cultural technology creative industry player, producing 70% of total net games output value in the country

Software Outsourcing

Changsha: the largest domestic animation-cartoon production base (ranking 10th in the world), contributing more than 50% of original making output

Dalian: software engineering capacity covering design, development to testing and maintenance ， products with independent IPR have entered international market

Achievements ( IV ) Model areas of green development

average energy consumption per 1,000 Yuan GDP: 50.6 kg stand coal, only 40% of national average.

two thirds zones have been ratified as demonstration areas of ISO14001 Environment Management System.

Experimental districts of public administration reform Small-Organization with Extensive Services

scale of administrative body : 1/4 of ordinary districts. administrative staff: 1/8

Service-oriented governments “one-stop service” system

1

2

34

“4 in 1”

Powerful engines to push economic restructuring and growth mode transformation

Service platforms to facilitate tech-based companies to compete in international markets

Forelands to take the commending points of high-tech industries

Important carriers to promote technology progress and reinforcing indigenous innovation capabilities

Strategic Positioning

Future Strategy

Strategic Goals Realizing “5 changes” Endeavoring to make “4 advancements” Constructing “3 types of parks”

Endogenous-Developing Approach Industry Cluster Development Industry Structure Innovation Building Harmonious Parks International Cooperation

Future Strategy

Realizing “5 changes” from land/capital driven to tech/innovation driven from reliance on preferential policy or investment attraction to

optimizing innovation/entrepreneurial environment and cultivating endogenic force

from all-inclusive industrial development to developing characteristic leading industries based on local conditions

from “hard” to “soft” environment building by optimizing configuration of technology resources and providing qualified services.

from “introduction from abroad” and domestic market oriented to “integration of bringing in and going out” and developing international market.

Future Strategy

Endeavor to make “4 advancements” Significant advancement of indigenous innovation ability Remarkable advancement of international competitiveness Advancement of sustainable development capacity Advancement of radiating and leading effect

Constructing “3 types of parks” World Class High-tech Parks Innovation Parks Specialized Parks

Future Strategy

Future Strategy

To cultivate and develop innovation clusters based upon various existing industrial bases through the guidance of public policies

To speed up the formation and growth of innovation clusters by establishing specialized parks, promoting industry alliances, cultivating innovative industrial sectors and strengthening public utility management

Industrial Base Industrial Cluster Innovation Cluster

Physical congregation of industrial elements

Specialized industries

Close professionalized business co-operation based on value chains

Industrial centralization

Congregation of higher-end innovation elements including technology, talent, capital & tech-based companies.

Connection, interaction, competition and co-operation among innovation players

Strong Innovation ability

Main Features

Industrial Cluster Development

Future Strategy Industrial Structure Innovation

Industrial Growth Discipline （ Life Cycle）Birth Formation Growth Maturity Decline

Industrial Value Discipline

Capital

Technology

Market

HR

Infrastructure

Knowledge

Essential Factors

Demand vs

Supply

R&D Design Production Brand Distribute

Business

Gov.

Universities

IntermediariesIndustrial StructureDisciplineR

esearch

Industrial structure innovation may take on various forms relating to the three basic disciplines of high-tech industry development

Future Strategy

Society Harmony

Environment Harmony

Requirements on developing Harmonious

Park

Culture Harmony

Building Harmonious ParksEconomy Harmony

Future Strategy

Government Level

Park Level

Business Level

HumanzP

Market ……

Capital

Technology

International Cooperation

peopleCooperation

Torch Center: Missions

Strategic Study & Planning

Administration Work

Project Management

Promotion & Services

High-tech Industrialization &

Environment Building

Making research on the development conditions and problems regarding the high-tech zones, technology markets, high-tech industrialization etc. and submitting suggestions and proposals to MOST for policy-making

Drawing up proposals on policies and development plans of the Torch Program, the national high-tech parks, technology markets, technology business incubators, high-tech enterprises, etc.

Drafting proposals on investment and financing policy for high-tech industrialization, organizing and and promoting technology-oriented venture capital investment.

Torch Center: Strategic Study & Planning

National High-tech industry Development Zones & Torch Program Industrial Bases

Technology Business Incubator Overseas Science Parks Technology Market, Technology Transactions Venture Capital Institutions; High-tech Enterprises

Torch Center: Administration Work

Torch Program Innovation Fund for Small Technology-based Firms (including

Tech-based SMEs VC Introductory Fund ) National Key New Products. Productivity Promotion Centers, University Science Parks Software industrialization Compilation of ‘China High-tech Products Catalogue’ & ‘China

High-tech Commodities Export Catalogue’, etc.

Torch Center: Project Management

Related Statistical work Coordination and guidance work on the management of

technology markets across the country Services on S&T achievements application and Industrialization

consultation. Promotional work for high-tech industrialization Information services Personnel training International cooperation

Torch Center: Promotion & Services

Thank you !Thank you !

Website: www.ctp.gov.cn E-mail: qianjq@ctp.gov.cn