China should continue to invest in science and technology: Expert

Fu Xiaolan, a governing council member of the Technology Bank for the least developed countries, a UN establishment

Despite facing pressure of economic slowdown, Chinese officials should continue to encourage investment in science, technology and innovation, said Fu Xiaolan, a governing council member of the Technology Bank for the least developed countries, a UN establishment.

As China moves its economy out of a manufacturing-based model toward an innovative, serviced-based one, the country will face challenges that will take some time to overcome, but government officials need to stay their course, she said.

"Society needs to be patient and realize that this takes time and great determination. Do not fear temporary challenges and pressure and really move forward. [The government should] not change its agenda and its progress because of short-term difficulties," said Fu, who is the director of the technology and management for development center at Oxford University.

"China has seen some slowdown of GDP growth," she said in an interview with China Daily. "This puts the government under pressure, and this is normal in an economic structural transition, and China needs to stick to its plan and agenda. Do not deviate from the original plan because of these challenges."

Fu was speaking after the first-ever Science, Technology and Innovation for Sustainable Development Goals conference at UN headquarters in New York on June 6 and 7. The forum's purpose was to identify technological needs and gaps that help facilitate sustainable development goals implemented by the UN.

On the progress that China has made in technology and innovation, Fu said the country has made a lot of progress on several fronts: the attitude toward innovation has changed a lot in the past decade, which has made indigenous innovation a top priority in China's development strategy.

"I think this means the mindset of policymakers and also of society has changed. People at various levels realize that innovation, science and technology are very important drivers and also for sustainable development," said Fu, who is also a professor of technology and international development at Oxford.

Second, China has invested heavily in research and development, trailing only the US as the second-largest investor in R&D and overtaking Japan. Patent applications from China are also on the rise.

There are areas in which China has become a world leader, including the development of high-speed railways, high-voltage power transmission systems and the aerospace industry, Fu added.

Despite these achievements, most of China's industries are "still followers," and the gap in technological knowledge and innovation between Chinese firms and those of advanced countries is "still considerable," she said.

Even though China invests heavily in R&D, efficiency is not high, Fu said. "High investment has not resulted in output that is proportional to its investment. There's still great potential, of course, but efficiency is low mainly because of the management systems on the macro level and micro levels," she added.

Industry upgrading and structural change is needed, which means that some industries need to be phased out while other industries will emerge, she said.

One way to increase efficiency and further encourage innovation at home is to properly set macro incentives, such as setting wages that are competitive in order to retain talent, and to regulate incentives so that investors are more incentivized to invest in manufacturing and innovation as opposed to other sectors such as real estate and the stock market, which traditionally yield investors quick returns, Fu said.