The future of China’s economy. Results of a recent survey can be found in Insight 5.

China has poured about 1.5 billion yuan (about $197 million) into the research and development of nanoscience and nanotechnology over the past 15 years. The number of patents they have filed for has increased from less than 1,000 in 2001 to more than 4,600 in March 2005. China is not just about manufacturing. China is moving up the value chain as is investing in R&D as a key economic and growth development strategy.

During 2006, the world's three largest spenders of R&D where the United States (US$330 billion) and China (US$136 billion) followed by Japan (US$130 billion). A 2006 study on global R&D by the Battelle Memorial Institute indicated that China has increased R&D spending annually about 17% over a 12-year period, compared to 4% to 5% for Europe and the United States. The key issue may not be just the investment in R&D in Europe as R&D alone does not increase profits. It is also converting the the results of R&D into commercialised patents, start-up, products and services.

The Chinese economy has enjoyed four consecutive years of at least 10% growth. China's economy expanded by 10.7% in 2006. New economic research reveals businesses in Europe and the US are very scared of the impact but ill prepared to act and lag behind their Asian counterparts on ambitions for the China (中華人民共和國) market. Over 700 business leaders, government officials, leading academics and futurists from across 60 countries were polled in the first worldwide survey to gather views and expectations of China’s global impact over the period to 2020.

The survey conducted by business think tanks Global Futures and Foresight (GFF) and Fast Future provides rich insight into how business attitudes and ambitions for the China market are evolving across five continents. The report ‘The Future of China’s Economy, The Path to 2020 – Opportunities, Challenges and Uncertainties’ published on the 22 March 2007 provides a ‘wake up call’ to the Western business world, warning that to thrive in the changing global economy action must be taken now to make China a key element in future business strategies.

Graham Leach, Chief Economist and Director of Policy for the UK Institute of Directors says, “For UK and Western businesses to stay competitive in the global marketplace, China has to be a key component of their strategy. This study highlights very clearly that business leaders in the west now understand the scale and long term potential of China’s economy and they recognise the massive impact China will have in their markets globally. Despite this, many are still unwilling to respond, hesitant in their China strategies or simply unsure of what to do. It is now time to act on these concerns, start learning about the Chinese marketplace, drawing on the experience of those already doing business in China and actively embracing the opportunity that China presents.”

Key findings of the survey can be found in Insight 5....click here to read more...

You may also find interesting the results of a study conducted by Booz Allen's - Smart Spenders: Global Innovation 1000. This study and report highlights a small group of high-leverage innovative firms who out perform the industry. They are able to reduce R&D investment and still innovate more successfully than their competitors. "Money simply cannot buy innovation". Information on the study has been published by Booz Allen in Insight 4 .... to read the article click here.

Shak Gohir
Business & Progamme Manager