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China kickstarts innovation-driven growth

By David Chan (CCTV.com)

Updated: 2016-03-03 20:23:21

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China kickstarts innovation-driven growth 

"Innovation" is the keyword on everyone's lips as the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC) are to commence the 2016 annual plenary sessions on March 5 and 3 respectively in Beijing.

Over the past year, Chinese President Xi Jinping has emphasized time and time again on the importance of innovation-driven growth for the country's economic development.

Meanwhile, Chinese Premier Li Keqiang has stressed the role of innovation in China's 13th Five-Year Plan, encouraging renewed efforts to improve old business models and advance new growth engines.

The Chinese government has introduced measures including tax reductions and streamlined government initiatives to incentivize and promote startup activities throughout the country.

In September 2015, China set up a development fund worth almost $10 billion USD in order to assist small and medium-sized enterprises.

Prospects for economic growth through innovation

With around seven million new graduates entering the job market each year, more and more young Chinese are opting to start their own businesses instead of joining the ranks of the bureaucracy or large corporations.

According to Premier Li, as of September 2015, over 10,000 new firms are registering in China per day, and these new companies have become job providers, thereby facilitating robust job growth despite the economic slowdown that has taken hold in recent years.

Foreign companies seem optimistic about future growth of the Chinese market, as the latest report from the American Chamber of Commerce in China revealed that nearly three quarters of its member firms enjoyed strong investment returns in 2015, and over 90 percent of member companies viewed innovation as key to their future success in China.

China's startup boom

In 2015, over 4.4 million companies were established in China, up 21.6 percent from the previous year.

This recent startup boom followed implementation of state measures to encourage citizens to establish their own businesses. The measures included tax breaks and easier market entry for entrepreneurs.

Global venture capital made 1,555 investments in Chinese startups valued in total at $37 billion in 2015, up 147 percent from the previous year.

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