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Nation confident on 2020 innovation target
By Wu Chong and Jiao Xiaoyang (China Daily)
Updated: 2006-03-11 06:48

China is confident that it will become an "innovative country" by 2020 despite arduous tasks ahead, Minister of Science and Technology Xu Guanhua said on Friday.

In 2001, China ranked 28th among 49 major countries in terms of comprehensive scientific and technological innovation capability.


Xu Guanhua, minister of science and technology, answers questions from reporters at a news conference in Beijing March 10, 2006. [newsphoto]
"We must enter the top 20 before we can say that we have realized our target," Xu told a news briefing on building an innovation-oriented country on the sidelines of the ongoing session of the National People's Congress.

"Our per capita supply of energy, water and land resources is becoming more stringent as we face pressing problems in resources and environment," Xu said.

Only by promoting science and technology can China solve these problems, he noted.

According to Xu, Chinese enterprises are under increasing pressure from international competitors in globalization.

They have to pay high patent fees, for example, 20 per cent of a mobile phone's price, 30 per cent of a computer's and 40 per cent of the price of a program-controlled digital machine tool, to foreign patents owners.

To change the situation, the budget for science and technology this year will reach 71.6 billion yuan (US$8.9 billion), up 19.2 per cent year-on-year, according to Zhang Shaochun, assistant minister of finance.

He said the government will ensure that expenditures on research and development (R&D) grow at a faster pace than fiscal revenues in the next five years.

The government will also offer tax incentives to innovative businesses, he said.

The new tax policies will allow an enterprise to use 150 per cent of its spending on R&D to offset payable income tax of that year.

"In other words, the government will give tax rewards to companies that are actively involved in R&D," said Fang Hanting, a senior researcher with the National Research Centre for Science and Technology Development.
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