Page 178 - 2021 White Paper
P. 178
1 White Paper on the Business Environment in China
and new products, both of which have more RMB bdevelopment continued to lag. Compared to more
than tripled. Indeed, Guangdong (mainly the tangible achievements above, R&D manpower,
GBA cities) led the whole country in terms of RMB benterprise capital expenditure on R&D, and the
international Patent Cooperation Treaty (PCT ) innovative environment have increased albeit at
patent applications, with 24,700 or over 40% less pronounced pace. It may suggest room for
of national total in 20194. Meanwhile, the nine further improvement in terms of the availability of
GBA cities in the Mainland are collectively home R&D talent, the share of R&D funding as a share of
to around 20.5% of China businesses that have value-added of industry (VAI), and the share of R&D
R&D facilities, against an overall share of 13.2% funding in local government finances.
in 2018.
It is important to note that the lag comes
The GBA is a national leader in patent application from exceedingly strong growth in enterprise
commitment rather than a lack of progress in these
Invention patent application (2018) areas. In terms of the share of local government
spending on technology development, the GBA is
Note: Share of national total in bracket a strong national leader with 4 of the top 10 cities
Source: Wind, Guangdong Bureau of Statistics coming from this region. It comes amid a four-fold
increase in spending in the past five years, to close
It suggested strong enterprise sponsorships that to RMB90b in 2018 from around RMB20b in 2014.
are in line with favorable policies since the launch Corporate R&D spending by industrial enterprises,
of the National Intellectual Property Strategy in meanwhile, also increased to 7.2% of total VAI in
20085, as well as the ambitious national and regional 2018 from 5.7% in 2014.
targets on patent applications and ownership6.
For example, internet companies in the region are The GBA is also a national leader in fiscal technology
actively investing through their corporate venture spending
capital, amid government incentives on patent
application. Also, the government introduced Fiscal spending on technology
venture capital (VC) funding promotion policies,
such as co-financing for private VC funds from local Source: Wind
government funds7. As a result, China’s VC market
expanded to become the world’s second largest GBA fiscal tech spending has more than quadrupled in the
with strong presence in Shenzhen8. past five years
Soft environment such as talent supply lags Fiscal spending on technology in GBA
behind
Source: Wind
Meanwhile, the study also showed that the soft
environment for GBA’s innovation and technology Nevertheless, the divergent trends do reveal the
challenge to institutionalize innovation after the
4 www.sipo.gov.cn/zscqgz/1145388.htm
5 www.gov.cn/zwgk/2008-06/10/content_1012269.ht
6 www.sz.gov.cn/zfgb/2017/gb991/content/
post_4999118.html
7 www.rieti.go.jp/jp/publications/pdp/18p012.pdf
8 pitchbook.com/media/press-releases/china-be-
came-second-largest-venture-capital-market-by-total-cap-
tal-invested-in-2018-according-to-pitchbook-report
178
and new products, both of which have more RMB bdevelopment continued to lag. Compared to more
than tripled. Indeed, Guangdong (mainly the tangible achievements above, R&D manpower,
GBA cities) led the whole country in terms of RMB benterprise capital expenditure on R&D, and the
international Patent Cooperation Treaty (PCT ) innovative environment have increased albeit at
patent applications, with 24,700 or over 40% less pronounced pace. It may suggest room for
of national total in 20194. Meanwhile, the nine further improvement in terms of the availability of
GBA cities in the Mainland are collectively home R&D talent, the share of R&D funding as a share of
to around 20.5% of China businesses that have value-added of industry (VAI), and the share of R&D
R&D facilities, against an overall share of 13.2% funding in local government finances.
in 2018.
It is important to note that the lag comes
The GBA is a national leader in patent application from exceedingly strong growth in enterprise
commitment rather than a lack of progress in these
Invention patent application (2018) areas. In terms of the share of local government
spending on technology development, the GBA is
Note: Share of national total in bracket a strong national leader with 4 of the top 10 cities
Source: Wind, Guangdong Bureau of Statistics coming from this region. It comes amid a four-fold
increase in spending in the past five years, to close
It suggested strong enterprise sponsorships that to RMB90b in 2018 from around RMB20b in 2014.
are in line with favorable policies since the launch Corporate R&D spending by industrial enterprises,
of the National Intellectual Property Strategy in meanwhile, also increased to 7.2% of total VAI in
20085, as well as the ambitious national and regional 2018 from 5.7% in 2014.
targets on patent applications and ownership6.
For example, internet companies in the region are The GBA is also a national leader in fiscal technology
actively investing through their corporate venture spending
capital, amid government incentives on patent
application. Also, the government introduced Fiscal spending on technology
venture capital (VC) funding promotion policies,
such as co-financing for private VC funds from local Source: Wind
government funds7. As a result, China’s VC market
expanded to become the world’s second largest GBA fiscal tech spending has more than quadrupled in the
with strong presence in Shenzhen8. past five years
Soft environment such as talent supply lags Fiscal spending on technology in GBA
behind
Source: Wind
Meanwhile, the study also showed that the soft
environment for GBA’s innovation and technology Nevertheless, the divergent trends do reveal the
challenge to institutionalize innovation after the
4 www.sipo.gov.cn/zscqgz/1145388.htm
5 www.gov.cn/zwgk/2008-06/10/content_1012269.ht
6 www.sz.gov.cn/zfgb/2017/gb991/content/
post_4999118.html
7 www.rieti.go.jp/jp/publications/pdp/18p012.pdf
8 pitchbook.com/media/press-releases/china-be-
came-second-largest-venture-capital-market-by-total-cap-
tal-invested-in-2018-according-to-pitchbook-report
178
