Characteristics and Questions Internationalization of Chinas R&D: Characteristics and Questions by Professor Zhou Yuan, Deputy Director-General National Research Center for S&T for Development Ministry of Science and Technology, China Presented at the international workshop on Internationalization of R&D Helsinki,Finland Jun, 2004

Background Background Characteristics Characteristics Questions Questions Conclusion Conclusion Contents

I. Background 1.Chinas comparative advantage in R&D (1). Cheaper S&T human resource in good quality (1). Cheaper S&T human resource in good quality (2). Grand domestic market (2). Grand domestic market

I. Background 2. Incentives of developed countries and MNC to promote internationalization of Chinas R&D (1). Making full use of Chinese S&T talents (2). Occupying the market

II. Characteristics 1. Chinese S&T human resource is developed on a large scale in internationalization Students studying abroad Source: MOST(2002), China Science and Technology Indicators 2002

1.Chinese S&T human resource is developed on a large scale in internationalization MNCs R&D institutes in China by region MNCs R&D institutes in China by region II. Characteristics Source: MOST(2002), China Science and Technology Indicators 2002

II. Characteristics 2. Chinas big market attracts R&D input from developed countries and MNC 2. Chinas big market attracts R&D input from developed countries and MNC Overseas share of R&D funds Source:OECD, MSTI, , MOST(2002), China Science and Technology Indicators 2002

II. Characteristics 2.Chinas big market attracts R&D input from developed countries and MNC Overseas share of R&D funds in manufacturing Source:OECD, STI Scoreboard, 2003, OST(2002), China Science and Technology Indicators 2002

II. Characteristics 2. Chinas big market attracts R&D input from developed countries and MNC Distribution of MNCs R&D institutes by technology fields Source: MOST(2002), China Science and Technology Indicators 2002

II. Characteristics 2. Chinas big market attracts R&D input from developed countries and MNC Foreign patents application Source: MOST(2002), China Science and Technology Indicators 2002

II. Characteristics 2. Chinas big market attracts R&D input from developed countries and MNC Sales value of high-tech new products Source: MOST(2002), China Science and Technology Indicators 2002

III. Questions Question 1: Does China benefit from internationalization of R&D? Yes: 1. Learning advanced R&D experience from other countries 2.Nurturing domestic talents in international cooperation

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? No: 1. In theory, developed countries and MNC input R&D resource into China in order to pursue maximized profit for themselves, not to enhance host countrys competitiveness.

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? No: 2. In practice (according to a survey of foreign enterprises in Beijing, Shanghai, Suzhou and Dongguan) ----all the equipments of 32.4% foreign enterprises are introduced from abroad ----the majority of equipments of 55% foreign enterprises are introduced from abroad ----the majority of equipments of 13.2% enterprises are made in China

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? % enterprises introduce technologies mainly by consulting % enterprises introduce technologies mainly by consulting ----only 24.8% enterprises offer technology and know-how ----only 24.8% enterprises offer technology and know-how

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? % foreign enterprises have never applied patents in China % foreign enterprises have never applied patents in China % foreign enterprises have applied international patents

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? % enterprises have never formally cooperated with domestic R&D institutes % enterprises have never formally cooperated with domestic R&D institutes % enterprises do not plan to cooperate with domestic enterprises % enterprises do not plan to cooperate with domestic enterprises

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? Overseas share and output structure of Chinas R&D funds Performed by Source: MOST(2002), China Science and Technology Indicators 2002

III. Questions Question 2: Does R&D internationalization enhance host countrys S&T competitiveness? R&D funds of universities and institutes by source Source: MOST(2002), China Science and Technology Indicators 2002

IV. Conclusion 1.Chinas R&D internationalization is developing both on scale and in depth

IV. Conclusion 2. R&D internationalization benefits both China and developed countries & MNC

IV. Conclusion 3. Developing countries should enhance S&T competitiveness by innovation on their own. 3. Developing countries should enhance S&T competitiveness by innovation on their own.

Thank You !