Sci-Tech, innovation to play crucial roles in China's long-term growth

Chinese Premier Li Keqiang's speech at the opening ceremony of the Summer Davos forum has underlined government's commitment to supporting science, technology and innovation to play the crucial roles in underpinning Chinese industrial upgrade and long-term economic growth, said Rajiv Biswas, Chief Asia Economist at INC Inc., in an interview with Xinhua.

The Annual Meeting of the New Champions 2014, also known as the Summer Davos forum, opened Wednesday in north China's port city Tianjin.

Several highlights in the economic field could easily be spotted during Premier Li's speech, said Rajiv.

For instance, Premier Li stressed the importance of economic and structural reforms as a driver of long-term economic growth, rather than relying on fiscal stimulus; China commits itself to increasing the network of multilateral and bilateral free trade agreements to create a strong free trade net work; and China would accelerate efforts to make the domestic economy more open for foreign investment and technology, elaborated Rajiv.

Rajiv believed that science, technology and innovation are acting as the significant roles on China's economy restructure.

"Over the last three decades, Chinese economic growth was driven by exports and investment related to external demand, as it became a global hub for low-cost manufacturing. With manufacturing labor costs rising in China, it is becoming harder for China to compete in very low-cost manufacturing industries," said Rajiv.

"Therefore science, technology and innovation will play a crucial role over the next decade in helping Chinese industry to move up the value-adding chain into high-tech industries and maintain strong economic growth."

A major focus of Premier Li's speech was on the need for innovation as an essential factor to upgrading the Chinese economy, noted Rajiv.

"Premier Li stated that increasing scientific research and development would be a key focus to accelerate the development of higher value-added industries, including technological sophistication and brand quality of Chinese products. As part of China's policy efforts to improve science and technology as well as innovation, a key focus would be on further improving workforce skills through education and training, as well as ensuring greater protection of intellectual property rights," added Rajiv.

On 7th September, IHS, a United States-based data analysis company, said in a report that China would surpass the United States, becoming the world's largest economy in 2024, as the country's consumer spending is expected to almost quadruple from 2013 to 2024.