App | 中文 |

Premier Li Keqiang: limit government role to foster innovation and entrepreneurship

Updated: Dec 4,2014 2:57 PM

“The key to transforming and upgrading the Chinese economy to the middle and high-end is to call on and utilize the wisdom of millions of Chinese people and bring it into full play to further encourage their initiative,” Premier Li Keqiang said at an executive meeting on Dec 3.

The meeting focused on expanding the pilot policies in Zhongguancun, a technology hub in Beijing, to larger areas to boost the development of national innovation demonstration zones.

Li stressed that at the core of the Zhongguancun pilot policies is a plan to boost incentive and foster the creativity of millions of people through the government’s efforts to streamline administrative procedures and delegate powers to lower levels.

“We need to achieve a multiplication of society’s enthusiasm to innovate and create, through the government’s efforts in delegating powers to lower levels and allowing society to retain a bigger share of the profits,’’ the Premier said.

Now is the perfect time, he added, to expand the pilot policies, and inspire the people to create, innovate and help build a new engine to drive economic growth.

The Zhongguancun pilot policies were formulated four years ago and put into practice with the direct endorsement of Li, then vice-premier of the State Council. During a visit to Zhongguancun, Li asked the relevant departments to support the area with policies that would encourage innovation. A series of pilot policies were established shortly after.

Li said at the meeting that since the implementation of the pilot policies, the Zhongguancun National Innovation Demonstration Zone has made significant contributions to the structural upgrade and transformation of Beijing’s economy. More important, he said, the reform allowed initiative to flourish.

Incentive regulations were too rigid in the past, he said. Before the reform, those involved in scientific research in colleges and institutions had to split the bonus they earned from their achievement with all their colleagues. It might sound fair, Li said, but, in essence, this suppressed the enthusiasm of researchers and consequently reduced efficiency.

The Premier said that expanding the pilot policies means much more than just tax reduction: it is, he said, primarily about nurturing innovation in the system.

Pointing at the requirement of “steady progression’’ written in the document, the Premier

specifically asked officials to “further emancipate their minds”.

“To push forward the national innovation demonstration zones, we should not set too many indicators, assessments and approvals as if we’re ‘fishing’. My suggestion is to accelerate,” Li said.

He added that all the new high-tech zones should have access to beneficiary policies, so that those who are willing to innovate and create businesses can develop them faster.

Li mentioned that before the reform of the research institutes, some worried that it might result in a loss of State-owned assets. Time has proved that the assumption was wrong, he said.

“We should believe in researchers and encourage them to be more creative. You never know, one day, they may become China’s William Gates and Steve Jobs.”

While calling for acceleration, Li also asked relevant departments to figure out how to replicate the policies promoting innovation and expand them to larger areas.

The Premier stressed that the current reform should not be restrained and segmented by regions. When the outcome of a reform is not clear, the government can start with pilot projects. But once the model has proved its feasibility, it should be promoted and expanded as soon as possible to benefit the public.

“The government should quicken its pace in functional transformation,’’ Li said. “After promoting the policies that benefit the public, more energies should be put into strengthening supervision and regulation during and after administrative approvals. The economy should enjoy better quality and higher efficiency. People’s entrepreneurship and innovation should be the new base for the Chinese economy.”