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Achieving Common and Inclusive Development Through Innovation (full text)

Updated: Oct 14,2014 6:33 AM


Your Excellency Prime Minister Dimitry Medvedev,

Distinguished Guests,

Ladies and Gentlemen,

Dear Friends,

Dobriy den’ (Good morning)! It is a great pleasure to attend the Third Moscow International Forum for Innovative Development ‘’Open Innovations’’. I would like to extend, on behalf of the Chinese government, congratulations on the opening of the forum.

Innovation is the perpetual engine driving development and progress of humanity. The world, which is undergoing major transformation and adjustment, calls for innovations of greater depth at a wider scope. Being fettered by old conventions or relying on one’s own efforts will not lead to such innovations. What we need is openness, cooperation and sharing. When the international financial crisis broke out six years ago, the international community acted by pulling together to prevent the crisis from worsening and spreading. With further progress in economic globalization and IT application, it is even more important for countries to join hands in pursuing cooperative innovation in order to realize a multiplication of knowledge and value, overcome development challenges and achieve common prosperity. This is what open innovation is all about.

Open innovation includes not only innovation and cooperation in technology, but also innovation and sharing on systems and institutions. At the moment, new technologies are promoting profound adjustments in the global economic and industrial patterns while the world economic recovery remains a bumpy road. Only when technological innovation and structural reform are combined to form a synergy, and only when the creativity and innovation potential of the people are fully unleashed, can we produce a strong momentum to sustain global economic stability and recovery. During this process, countries need to share experience of reform and innovation, narrow the “innovation gap”, and pursue inclusive development and development for all.

Ladies and Gentlemen,

In China, people are becoming more and more enthusiastic about innovation. At the Summer Davos held in Tianjin not long ago, there were heated discussions on the theme of creating value through innovation. My foreign friends often ask me, what is the secret behind China’s sustained growth? The answer is the hard work and wisdom of the Chinese people. The reform and opening up of China, involving the more than 1.3 billion people, is an innovation campaign of the largest scale ever in the world. Through such reform measures as empowering the farmers with the land operation rights, reforming the SOEs and developing the private sector, we have fully stimulated the creativity of the multiple players in our economy. Many of our practices and systems, which have proven to be effective, were all established in this process. With the unleashed creativity of tens of millions of the people, the society has gained a stronger capacity to create wealth and the people have become better off. Opening up is also a kind of reform. We have opened up to the world, promoted reform through opening up, and enhanced our innovation capacity and competitiveness through opening up in wider scope and at higher level.

Science and technology have served as the primary productive force in driving China’s development. A robust scientific and technological sector would not be possible without reform. Over the past 30 years and more, we have deepened reform of science and technology institutions. While strengthening basic research, we have encouraged the scientific and technological personnel to compete in the market and create their own value. In this way, we have developed and grown scientific and technological companies through market competition, and boosted the vigor of the market and innovation.

China has made remarkable achievements in development. However, we know clearly that China is still the largest developing country. It still ranks around the 80th in the world in terms of per capita GDP, and lags far behind developed countries in science and technology. The quality and efficiency of the economy is in the process of improving, and there remain quite some systemic and institutional obstacles that stand in the way of development. China needs to achieve faster and better growth to become a moderately developed country by the middle of this century. What is crucial is to further free our mind, persist in reform and innovation, and unleash the creativity of the people so that the whole society will be full of vigor and vitality, providing a reservoir of energy that propels development.

First, remove the barriers that constrain innovation. We are committed to building a pro-innovation government, and the top priority is to streamline administration and delegate government powers. This, in fact, has given more room to the market and lowered the threshold of market access. For the past year and more, central government departments have removed or delegated to lower levels administrative approval on over 600 items. The business registration reform introduced last March triggered a massive surge in the number of newly established businesses. Through vigorous reform, we hope to reduce intervention in innovation, so that everyone with the willingness and ability to create and innovate will have the chance to succeed, leading to a situation of entrepreneurship and innovation by all. This way, we can turn China’s demographic dividend into talent dividend, and ensure that reform and innovation are pursued to enrich and benefit the people. This, in turn, will enable us to deliver all-round development for the people, and promote the development of an equitable society and a sustainable economy.

Second, put in place mechanisms that encourage innovation. We will accelerate the reform of the science and technology system, improve the mechanism of R&D outcome utilization and proceeds distribution, and apply incentive policies such as equity and options so that innovators will have more autonomy in their research and inventors will get their fair share of reward. It should be underscored that all law-abiding businesses operating in China will receive national treatment. Foreign businesses enjoy the same preferential polices in their R&D activities. Their innovations are equally deemed “Created in China” products and their brands Chinese brands. We will also put in place social security and assistance systems covering the entire population so that all entrepreneurs and innovators will have a “safety net” to fall back on if and when they fail, and those who fail in innovation may reflect on themselves and start new entrepreneurial endeavors.

Third, create an environment that protects innovation. China is committed to turning itself into the most attractive country for innovation and entrepreneurship, a country that offers a huge market demand, and more importantly, a sound legal system, a well-regulated market and an inclusive culture. The Chinese government has made continuous efforts to strengthen IPR protection and combat IPR infringements, fake and counterfeit products and other illegal acts. Protecting intellectual property is protecting the seedling of innovation and the market order of fair competition. Ultimately, fair competition and honest business operation can help both Chinese and foreign companies achieve sustained and sound development.

Fourth, cultivate an innovation-driven economy. As we Chinese often say, there is no making without breaking. The traditional way of extensive growth is no longer viable for China. To realize quality, efficient, energy-saving and environment-friendly growth of the Chinese economy, it is imperative to pursue growth driven by innovation. We support companies in making innovation in technologies, management and forms of business, and translating innovation outcomes into actual productivity at a faster pace. We will unlock the huge potential of domestic demand through innovation, remove the bottleneck of energy, resource and environment constraints, promote development of the service, high-tech and emerging sectors, and optimize and upgrade the economic structure, in order to achieve leapfrog development of the Chinese economy.

The innovation that China seeks is open innovation. We cannot possibly pursue innovation behind closed doors, and we stand ready to engage with all governments, institutions and businesses with a genuine interest in win-win cooperation. No matter how developed it becomes, China will always need to draw upon the strengths of other countries and keep introducing advanced technologies, managerial expertise and talents from others. And China will always be a major country committed to learning, to opening up and to encouraging innovation.

Ladies and Gentlemen,

As each other’s biggest neighbors, China and Russia have maintained the momentum of sound growth of bilateral relations at a high level. Last May, President Xi Jinping and President Putin signed the China-Russia Joint Statement on a New Stage of Comprehensive Strategic Partnership of Coordination. Yesterday, Prime Minister Medvedev and I co-chaired the 19th regular meeting of the prime ministers of the two countries, which produced rich results. China-Russia cooperation is steady, comprehensive and will continue well into the future. This points to huge potential for innovation and entrepreneurship in the two countries. In the new stage, China and Russia will provide stronger mutual support, open wider to each other, and take cooperation into greater depth. This will not only help the development and rejuvenation of each of our two countries, but also contribute to world prosperity and stability.

Both China and Russia have time-honored histories and profound cultures, which provides a rich source for innovation and creation. The Russian nation had produced many world-renowned scientists, writers and musicians, and the Chinese civilization had exerted a significant influence in the world. China and Russia are both strong in science and technology. China is pursuing the strategy of innovation-driven development, which has a lot in common with Russia’s innovation-centered modernization strategy. The two countries both see the development of the other as its own opportunity. All this provides the favorable environment, conditions and popular support for cooperation in innovation, which holds out great potential for broadening and deepening such cooperation. When scientific innovation and cultural creation are pursued in the context of mutual learning between civilizations, and when China’s advantages in industry, financial resources and market are combined with Russia’s advantages in resources, science and technology and talents, it will generate a strong multiplying effect and spark a wildfire of innovation.

China and Russia have conducted innovation cooperation in many areas, and are well placed to take such cooperation to a higher level. To this end, I wish to make the following proposals.

First, strengthen cooperation in major projects of strategic significance. China and Russia have implemented a host of major cooperation projects in energy, resources, aviation, space, information technology, telecommunications, energy conservation and environmental protection. As we study and implement new projects, we may also explore innovative models of cooperation and work together to commercialize innovation outcomes and explore market opportunities in third countries through joint R&D, joint manufacturing and joint application promotion. Given China’s advantage of competitive yet inexpensive equipment in a number of sectors, we are willing to take an active part in Russia’s infrastructure development in high-speed railway and railway upgrading for win-win results. Our two sides have made breakthroughs in energy cooperation. Going forward, we need to move beyond the buyer-seller relationship and push for cross-holding of shares and upper- and lower-stream integration, so that our cooperation will reach a new height.

Second, deepen cooperation between non-governmental institutions and at sub-national levels. We need to strengthen people-to-people exchanges and enhance the collaboration between research institutions, universities and academic organizations. Our two countries have over 100 pairs of sister provinces and cities, the cooperation potential of which is yet to be fully tapped. In northeast China, many people speak Russian, and people in the Far East of Russia are also familiar with China. There is a lot more we could achieve by aligning China’s efforts to revitalize its northeast and develop its west with Russia’s drive to develop its Far East. The two sides may also work together to build joint innovation zones. China encourages its businesses to invest in Russia, and we also welcome Russian enterprises to grow their business in China.

Third, explore creative ways to support SME cooperation. The hundreds of thousands of SMEs in science and technology are an important driver for innovation. They need more convenient, flexible and accessible support. We need to better accommodate their needs in investment, financing, local currency settlement and intermediary services. For instance, we could build a “green channel” for SME innovation through the establishment of market-based venture capital systems and over-the-counter markets for technological property rights.

Fourth, substantiate the mechanisms for facilitating innovation cooperation. Well-established mechanisms can help sustain and deepen cooperation. We should take this forum as an opportunity to put in place dialogue and coordination mechanisms on policy innovation, investment environment and other issues, and establish a multi-tiered cooperation mechanism that involves businesses and social organizations, in order to provide a bigger platform for the cultivation of new highlights in our innovation cooperation.

Ladies and Gentlemen,

The young people are the most passionate about innovation. Here, I stand to invite the young people from Russia and other countries to the China Innovation and Entrepreneurship Competition next year, where you will have an opportunity to present your talent to the world. Next year is the Year of China-Russia Youth Exchange, and the Chinese government will give full support to the relevant activities.

As this is a forum themed on innovation, it gives us more reasons to hope for the future. We hope the spark of wisdom generated today will be turned into a blueprint for cooperation tomorrow and yield the fruits of win-win progress in the days beyond.

To conclude, I wish this forum a full success. Spasiba (Thank you)!