Call for a more creative country that thrives on development

To raise efficiency in innovation, China should extend many reforms related to the innovation system, Fu says.

Innovation is not only science and technology, she says, but takes in education, R&D, business, financial support, taxation and banking.

Reform is needed not only in education but also in economics, she says, partly because of the huge economic advantages State enterprises enjoy at present.

"Resources have not been allocated efficiently within the economy and have not been reallocated to the areas that need resources."

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China needs to reform the system and increase competition so that resources are allocated efficiently and are directed to the innovation sector, she says.

Her research shows the country's small- and medium-sized enterprises and private companies have too few resources, whereas in the EU these sectors are the most dynamic driving force of innovation. The Chinese government needs to provide more information on what funding and training is available, she says.

China will increase investment in R&D in the coming years, she says. In 2012, R&D accounted for 1.98 percent of the country's gross domestic product, edging out EU member states, which together managed 1.96 percent, according to estimates that the Organization for Economic Cooperation and Development will publish this month.

In the past a lot of investment went into development research, but now investment in basic research needs to increase, Fu says.

China also needs to upgrade its industrial structure and its technological capability, she says. It also needs to overhaul career appraisal, rewards and promotion criteria in universities, other institutions and companies. In universities, for example, "we should tell people that quality is more important than quantity".

China has made great progress in protecting intellectual property rights, but still needs to do more, she says.

The government should use more pull rather than push policy measures to create a better environment and attract people, she says.

It also needs to use more "horizontal" policies as opposed to "selective" policies, she says.

Horizontal policies are those that benefit everybody, such as on education, R&D and training.

Such policies comply with World Trade Organization rules. Nobody can complain about a country that invests a lot in education, she says. But if policies that benefit a select few are adopted, there will be problems.