China a 'fertile field' of fresh business ideas

Companies are moving to make their R&D activity more global

China is becoming a true global innovation hub for multinational corporations from developed markets, a survey has found.

Two-thirds of MNCs reported that they are conducting research and development activity in China for foreign markets, and more plan to follow suit, according to consultancy Booz & Co.

Booz conducted the research in conjunction with the Benelux Chamber of Commerce in China, the 21st Century Business Review and the China Europe International Business School.

The China Innovation Survey, in its second year, drew on the views of 264 domestic and foreign companies.

It found that innovators in China are rapidly gaining competitiveness compared with their counterparts from developed economies.

Companies based in China increased R&D spending by 26.5 percent in 2011, the study said, more than double the global average, five times as much as Europe-based companies and 11 times that of Japanese companies.

The robust growth in R&D expenditure is evidently beginning to pay off. About two-thirds of respondents at MNCs operating in China reported that certain Chinese competitors are at least as innovative as their own companies, if not more so.

Chinese companies also said their innovation efforts are competitive with those of MNCs in China, though they still see significant room for improvement.