THE BUSINESS OF SCIENCE AND TECHNOLOGY IN CHINA

The Business of Science and Technology in China
The Made in China 2025 initiative identifies 10 industries where China intends to become globally competitive. These include artificial intelligence, robotics, quantum computing, aerospace and biotech – science and technology fields where other countries have traditionally dominated and where China is catching up fast.

The China Institute’s report on Sino-Canadian Relations in Science and Technology says that President Xi Jinping has set targets for enhancing China’s own original technology development, with a strategy of doing so by “absorbing technology from foreign companies via mergers and acquisitions and joint ventures, and increasing “re-innovation” by modifying foreign technology thereby making it Chinese.”^[1]

China’s R&D spending is on the rise, increasing more than 12 percent in 2017 over the prior year.^[2] In 2017, R&D accounted for 2.13 percent of China’s GDP^[3]; in Canada, by comparison, R&D only accounted for 1.3% of GDP.^[4]

Areas of Growth

China has traditionally invested less in basic research (rather than applied research or experimental development) than other countries. That’s shifting, with a new emphasis on pioneering basic research. In support of this, the country is opening the door to “encourage science ministries and commissions to consult foreign experts and attract non-Chinese to full-time positions within China [and] foreign scientists are now allowed to lead public research projects.”^[5]

Applied research and experimental development dominate the fast-growing information and communication technology sector; China is the world’s second-largest ICT market. Cloud computing, big data and the Internet of Things offer the potential to transform or disrupt virtually all industries.

Science and technology in support of smart cities initiatives – including transportation, network equipment, telecommunications, software applications – are all significant growth areas as China aims to promote greater levels of urbanization with minimized environmental impacts.

Opportunities for Canadian Organizations

Canada and China have decades of collaboration in science and technology that include government-to-government partnerships, joint research initiatives and strong academic linkages between the two countries. Canada and China also have a formal agreement for technological collaboration.

The China Institute’s report on Sino-Canadian Relations in Science and Technology argues that Canadian companies should leverage their strengths in the area of energy, environment, life sciences, aerospace and automotive. agriculture, biotechnology and ICT. The report also argues that Canadian researchers should seek opportunities to take advantage of China’s Big Science projects – such as the Shanghai Synchrotron and Jinping Neutrino Observatory –  to advance their own research projects.

Other opportunities for Canadian organizations involve taking advantage of outward Chinese investment, which is moving beyond acquiring energy and mineral resources to strategies to acquire technology and expertise.^[6] There’s increased interest from Chinese companies in establishing overseas R&D centres and business incubators in foreign markets.^[7]

The China Institute suggests that “considering Canada’s limit in market size and lack of a risk-taking investment culture, China could also serve as a test base for Canadian inventions before they are reintroduced into the domestic market.”

March, 2019

^[1] China Institute at the University of Alberta, From Field Surgery to Advanced Robotics: Sino-Canadian Relations in Science and Technology, 1938 to 2018, December, 2017.

^[2] Science Magazine, Surging R&D Spending in China Narrows Gap with United States, October 10, 2018.

^[3] Science Magazine, Surging R&D Spending in China Narrows Gap with United States, October 10, 2018.

^[4] Statistics Canada, Spending on Research and Development, 2018 Intentions, December 12, 2018.

^[5] Science Magazine, With Generous Funding and Top-Tier Jobs, China Seeks to Lure Science Talent from Abroad, June 5, 2018.

^[6] KPMG, China Outlook 2018.

^[7] KPMG, China Outlook 2018.