Global Advantage Consulting Group recently collaborated with the Canadian Embassy in Beijing to map the national science and technology innovation ecosystem in China.
China is notoriously difficult to understand from the outside. Comprehending the intricacy of Chinese systems of governance and economic activity, requires a navigation of limited public information, extreme complexity of systems, and sometimes cultural and language barriers.
Thanks to its ecosystem mapping expertise, internal Data Engine, and knowledge of the Chinese ecosystem, Global Advantage developed a comprehensive ecosystem map outlining national science and technology innovation in China, in the pursuit of potential new opportunities for collaboration and a better systemic understanding of the flows of funding, people, information, and governance between key stakeholders in China.
The project culminated in a comprehensive ecosystem map of China’s internal innovation structure, as well as key insights, risks, and recommendations for the Canadian Embassy to better engage in collaboration and capitalize on emerging opportunities for economic and social development.
Key findings about China’s innovation ecosystem
The study revealed several key findings about China’s science and technology ecosystem. While China’s spending on R&D (as a percentage of GDP) increased compared to the previous year, Canada’s GERD/GDP decreased. It also found that Chinese industry invests twice as much as Canadian industry (as a percentage of GDP) on R&D. Additionally, Canada’s higher education sector conducts almost five times as much R&D (as a percentage of GDP) as the Chinese higher education sector.
The Chinese Ministry with the highest expenditure in science and technology is, as one might expect, the Ministry of Science and Technology, followed by the Ministry of Industry and Information Technology and the Ministry of Agriculture and Rural Affairs, with all of them increasing their expenditures from 2018.
The country has five key objectives in their 15-year (2006-2020) plan for scientific and technological development:
- Raise the ratio of S&T development contributed to the economy to 60%
- Raise GERD/GDP to 2.5% by 2020
- Reduce reliance on foreign technology and IP to less than 30%
- Be among the top five worldwide in domestic invention patents and international citations of scientific papers
- Identify 11 key national economic and social development areas, focusing on the selection of 68 priority topics
Chinese universities are ranking higher globally as well. The Economist predicts that Tsinghua University, ranked sixth in the world in research ranking (2019), may top the world in science research within the next five years. The S&T talent pool is accelerating rapidly as well. China now leads internationally in the number of science and engineering graduates with Bachelor’s Degrees, and ranks third in science and engineering doctoral degree awards after the United States and Europe. The country also produces more science and engineering publications than the United States and the European Union, though still falls behind the rest of the world, South Korea, Japan and India.
The top-spending R&D companies in China are Huawei (world rank #5), Alibaba (#28), Tencent (#53), ZTE (#103) and Baidu (#73). By comparison, the top R&D-spending companies in Canada are Bombardier (#132 globally), Thompson Reuters (#229) and Toronto-Dominion (#310). In 2018, China had 133 companies on the Global Innovation 1000 analysis of the world’s largest publicly listed corporate R&D spenders by R&D expenditures. These companies accounted for $457.5 B USD in total R&D expenditures.
The study also found that China’s share of global consumption has grown significantly between 2007-17, and this has revealed significant opportunities for Canadian exporters. Notable Chinese tech sectors with high rates of consumption are the auto and consumer electronics sectors. China has roughly 43% of global electric vehicle consumption (600 thousand electric vehicles in 2017) and 40% of mobile phone consumption (worth $138 B USD) in 2017. Additionally, China holds 45% of the world’s consumption share in the fresh fish and seafood sector. China’s consumption has been fueled by rising household incomes and an accumulation of wealth over the previous decade.
China’s high-tech exports sat at $654 B USD in 2017. Chinese exports to Canada were valued at $75 B and were 12.5% of our total imports (2019). Meanwhile Canadian exports to China totaled $23.2 B and were 3.9% of Canadian exports worldwide in 2019.
There are S&T implications for China’s Belt and Road Initiative, some of which include:
- Establishing joint labs, science parks, international tech transfer centres, and S&T exchanges
- Constructing cross-border information and communication technologies and energy infrastructure
- Using satellites built for communication, navigation and remote-sending to build a “Belt-and-Road spatial information corridor”
- Developing digital connectivity platforms
Global Advantage Consulting Group continues to pursue work on China as well as other Canadian partners abroad, with a keen interest in working with Embassies, Consulates, and relevant stakeholders to better equip their staff with updated, accurate, and consequential data for decision making.