Economy

Innovation to add more value to domestic products

(Xinhua)
Updated: 2010-12-20 10:17

BEIJING - In the period of China's 11th Five-Year Plan (2006-2010), Chinese companies have been striving to raise the added value of their products by making independent technological innovations.

Li Wei, vice-president of the sugar producer, Xiwang Group in eastern China's Shandong province, told Xinhua that the market value of their product would rise 20 percent by turning corn into starch, and from starch to crystalline dextrose the value would further rise 80 to 100 percent.

"By turning corn into crystalline fructose, we can raise the added value by 20 times," Li said with excitement, holding up the fructose product which was put on the market recently.

This great leap forward became a reality due to the company's constant pursuit of technological innovations. Through independent research and development (R&D), Xiwang Group mastered several key technologies which were previously controlled only by a few developed countries.

Since 2007, the corn used each year by Xiwang Group has remained at around 1.8 million tons, but the total output has increased annually by 30 percent.

The Chinese government has long stressed the significance of independent innovation and encouraged companies to enhance their own capability of technological innovation.

In the plan for the 11th Five-Year Plan, the government took enhancing the capability of independent innovation as a crucial step in China's industrial restructuring and the transformation of the growth pattern, which greatly promoted companies all over the country to invest more in technological innovation and adding more value to their products.

"China-made products should become more and more valuable," said Zhang Yansheng, a researcher with the National Development and Reform Committee (NDRC).

To gain a foothold at the high end of the global industry chain, Chinese companies must improve their technology and raise the products' added value, according to Zhang.

After the financial crisis, eastern China's Jiangsu province also realized that the traditional economic pattern relying heavily on low-cost resources and labor had come to an end, so it turned to the growth pattern driven by technological advancement and the improvement of efficiency.

Mao Weiming, director of Jiangsu Development and Reform Commission, said the province increased the investment in R&D in the period of the 11th Five-Year Plan.

At present, the fund set aside for R&D accounts for 2 percent of Jiangsu's GDP, and the province's capacity of regional innovation is ranked first in China.

Nanjing Linkage Technology Co, Ltd in Jiangsu reaped the benefits from its growth in innovation capability.

"We invested 300 million yuan ($45.05 million) into research in 3G technology in recent years, and now we have more than 100 patents and have developed over 100 software products with independent intellectual property rights," said Tu Pingping, vice president of Nanjing Linkage.

The company is now providing technological support for the country's three largest communications providers -- China Mobile, China Unicom and China Telecom.

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Tu said with confidence that the company was planning to become a world-class software company and is expecting its software sales to reach 10 billion in 2012.

Another good example of independent innovation is the rapid development of China's high-speed railway, which set a new operating speed record of 486.1 km per hour on a test run on the Beijing-Shanghai railway only two weeks ago.

From introducing technologies from foreign companies to designing its own software and registering more than 900 patents, China has gradually become an independent researcher and developer in this field.

Using cutting-edge technology and high-end products, China is on a path to become known as the nation with the best and most efficient high-speed rail network in the world.

At present, there are 7,531 kilometers of high-speed tracks in use in China, which is the world's longest, according to the Ministry of Railways.

From Dec 7 to 9, the World Congress on High Speed Rail was held in Beijing. It is the first time for this meeting to be held outside Europe as a recognition of China's achievement in high-speed rail technology in recent years.

The Proposal on Formulating the Twelfth Five-Year Program (2011-2015) on National Economic and Social Development, released in October, said that technological advancement and innovation should be a significant pillar in accelerating the transformation of China's economic development pattern.

This stress on innovation will further promote companies to engage in independent technological innovation and increase the added value of their products.