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Torch Program in the Past 15 Years

At a press conference sponsored by the State Council Information Office on September 16, 2003, Xu Guanhua, minister of science and technology, briefed the press on the general status, main experiences and future direction of the national Torch Program during the past 15 years. The following is his speech entitled “Taking a Road of Science & Technology Industrialization with Chinese Characteristics”.


Looking forward with great foresight, the Communist Party's Central Committee and the State Council discerned incisively the important opportunities and challenges brought by the wave of new technology revolution surging around the world at the time and made a timely strategic decision in 1988 on "Developing high technology and realizing the industrialization". The national Torch Program was accordingly approved to be implemented and the prelude to the new and high-tech industry development in China was thus unveiled. Over the past 15 years, with the implementation of Torch Program we have explored a new road to develop new and high-tech industries with the Chinese characteristics. With great achievements having been made and precious experiences accumulated, Torch Program has become an important banner of leading the development of new and high-tech industrialization in our country. It has thereby approved that a developing country can also make some accomplishments in the field of new and high-tech industries.


I. The Overall Status of Torch Program Implementation


The main contents and achievements of Torch Program are mainly embodied as follows:


1. Promoting the rapid growth of the national economy by constructing and developing STIPs and optimizing the environment for industrial development


An important mission of Torch Program is to promote the construction of the Science and Technology Industry Parks (STIPs). Over the past 10-odd years, the 53 state-level STIPs have become an important force for the strategic restructuring of the national economy and cultivating new economic growth points. They have made positive contribution to the sustained, rapid and healthy development of the national economy. From 1991 to 2002, the total revenue from the 53 state-level STIPs has increased from 8.73 billion Yuan to 1.53 trillion Yuan with an average annual growth rate of over 60 percent. The tax paid during the same period has moved from 390 million Yuan to 76.64 billion Yuan with accumulated total tax revenues of 280.8 billion Yuan. In fact, over the recent 10 years, the average annual growth rate of various economic indicators from these STIPs has been kept at nearly 60 percent. In 2002, the annual increase of the industrial added value from these STIPs accounted for 22 percent of the national total. The export by the tenant enterprises in these STIPs have grown from US$180 million in 1991 to US$32.92 billion in 2002, with an average annual growth rate of 45.3 percent. The employees in these STIPs have increased from 140,000 in the initial stage of the establishment of these parks to 3.49 million in 2002. Apparently, the state-level STIPs have become the important bases for the new and high-tech industry development and an important force to drive the economic growth and create job opportunities.


In addition, the implementation of Torch Program has brought along the dissemination and application of new and high-tech findings in the traditional industries and thus has accelerated the upgrading of industrial technologies and optimized the industrial structure of the local economies. For example, there are over one thousand new technologies that have been applied into the traditional industries in Tianjin STIP. For example, there are more than ten new types of technologies or products that have been applied in the production of Tianjin Xiali Automobile Factory, including the automatic control system for the assembly line and the hanging integrated spot-welder.


2. Creating a favorable environment for innovation and entrepreneurship


From the late 1980s, Torch Program has promoted successively the establishment of Technology Business Incubators, the Pioneer Parks for Returned Overseas Scholars, the University Science Parks and special incubators focused in Software, IC Design, Bio-tech, Optoelectronics, Advanced Materials, etc. By providing various services such as in space, equipment, financing and training for the industrialization of new and high-tech findings and the establishment of venture businesses by scientific personnel, these incubators have formed up a favorable platform for innovation and entrepreneurship and have cultivated a large batch of new and high-tech SMEs with advanced technology and high economic performance. At present, there are all together 465 various technology business incubators all over the country with 23,373 tenant enterprises under incubation. 6,927 enterprises have graduated from these incubators and 30 of them have been listed on the stock market.


3. Accelerating the restructuring of local economies by establishing special industrial bases, especially the software bases and paying close attention to bringing into full play the effect of industrial clustering


Since 1995, Torch Program has paid great attention to cultivating the local or regional pillar industries as well as the new and high-tech industries with special features. The Ministry of Science and Technology has cooperated closely with the local governments and the local administrative departments of science and technology in establishing 39 Torch Program Industrial Bases by designating certain colonies of new and high-tech enterprises which are characterized with specialized industrial features, great industrial relevancy and advanced technology level as the centralized area for the implementation of Torch Program Projects. These bases have facilitated the local industrial restructuring and have become the spotlight and the new growth points of the local economy development. For example, the Anhui Tongling Electronic Material Base realized an annual output of 2.14 billion Yuan in 2002, accounting for 5.8 percent of the total industrial GDP of the Tongling city. One of its tenant enterprises is Tongfeng Company, which has ascended into the Top 100 Electronic Enterprises with the production scale of its leading product of electric membrane as the first in the world and a market share of more than 45 percent.


To promote the development of the software industry of the country, 22 national Torch Program Software Industrial Bases have been established. Having attracted a large number of software companies from home and abroad and converged a large batch of software talents, these software bases have become the fertile soil for the cultivation of software industry. In 2002, the 22 national Torch Program Software Industrial Bases realized revenues of 80.87 billion Yuan from software products or services with an increase of 34.7 percent over the previous year, accounting for 73.5 percent of the total software revenues from the whole country.


4. Promoting the growth of new and high-tech enterprises by accelerating the transformation of S&T findings in conforming with the principle of "market-oriented and project-driven"


The implementation of Torch Program has further perfected the overall strategic topology of the national science and technology development. With a market orientation, Torch Program has accelerated the conversion of a large batch of S&T findings with advanced technology level and independent property rights into real productive forces, making the industrialization of new and high-tech industries as an indivisible component of the science and technology work. According to the statistics, over the past 15 years, more than 24,000 Torch Program projects have been implemented accumulatively. More than 90 percent of the state-level Torch Program projects posses an in-house technology of the project undertaking enterprise or a technology developed domestically, among which 40 percent are sourced from the results of various national or local science and technology programs. The industrialization of many major research projects have been realized including the Dawning High Performance Computer, the Large- Medium Digital Switch, the Electronic Publication from the Founder Group of Peking University, the Mobile Container/Vehicle Inspection System from Tsinghua Tongfang Company and the HDTV from Amoisonic Electronic Company. With the introduction and implementation of Torch Program projects, the new and high-tech enterprises have been growing from small to big in a snowballing mode. The number of enterprises with annual revenues of more than 100 million Yuan has increased from 7 in 1991 to more than 1800 at present. In the mean time, a group of famous new and high-tech enterprises have been fostered, such as Lennovo, Founder, Huawei, Haier, Diao and so on. According to the investigation, more than 20 percent of the one thousand or more listed companies on the main board have once implemented some Torch Program projects.


II. The Main Experiences Obtained from Torch Program over 15 Years of Implementation


Reviewing the development process of the 15 years of Torch Program, the remarkable achievements it has made can be attributed mainly to the experiences in the following aspects:


1. It is an important function of the government to create a favorable environment for the development of an industry


In the transitional course of our country from the planned economy to the market economy, there are still many aspects that have not yet been adapted to the requirement of the industrialization of new and high technologies, including the market conditions, the legal environment, the infrastructures, the consciousness of innovation, the social and cultural atmosphere and so on. Therefore, it is very important to fully exercise the government's function of macro control and guidance in creating an optimized comprehensive environment concentrated with the necessary requisites for industrialization. To establish the STIPs to accomplish the needed environment and provide necessary guidance is thus one of the important functions of the government. The practice from both home and abroad has proved that a rapid development of new and high-tech industrialization could be realized even in a comparatively backward country or region as long as the power and resources of the government has been mobilized properly.


2. It is the soul of the development of an industry to remain a sustained innovation capability


One of the main features of new and high technology development is the rapid renovation of technology which requires a sustained innovation capability. Through the implementation of the National Program on Key Basic Research Projects (973 Program), the National High-tech R&D Program (863 Program) and the Key Technologies R&D Program, the Ministry of Science and Technology has provided abundant sources of technology innovation for Torch Program. In the mean time, great attention has been paid to guide the new and high-tech enterprises to improve their own innovation capabilities. It is only by converting the integrated mechanism of the government, the industry, the universities, the research institutes and the financial circles into the comprehensive advantages for technology innovation that the pace of new and high-tech industrialization could be further speeded up.


3. It is the key to the development of an industry to foster and bring up a personnel contingent of high caliber


The key to develop new and high technology and its industrialization is the cultivation and employment of talented personnel, especially the young elitists and people with compound abilities. Over the past 15 years, Torch Program has attracted, fostered and brought up a group of technopreneures and management personnel by attaching great importance to safeguarding the legal rights and status of the scientific personnel, to intensifying the enterprise incentive mechanism so as to fully mobilize the enthusiasm of the technology developers and the management personnel. By the end of 2002, only in the 53 state-level STIPs there have assembled more than 14,000 PhDs, more than 80,000 people with master degrees and a group of newly grown-up outstanding young entrepreneurs. All of them have become an important force for the development of new and high-tech industries in China.


4. It is a prerequisite for a rapid development of an industry to mobilize the enthusiasm of the various circles from the society to establish a comprehensive service system


The new and high-tech industry is still an emerging industry in our country and its growth and expansion must be market-oriented with the enterprises as the principle part and rely on the synergy formed up by the many entities involved for a co-development through bringing into full play the government's function of macro control and guidance, mobilizing the enthusiasm and creativity of the local governments, setting up various types of intermediary service systems. This is an important experience obtained from the implementation of Torch Program.


5. It is an effective approach to realize the industrialization to vigorously support the technology-based SMEs, especially those that are non-state-run


Small and medium-sized enterprises not only sustain the national economy but also absorb a majority of the employment. The technology-based SMEs which boost of the capability for innovation and rapid market response are furthermore the cradles for the large high-tech enterprises. The practice has proved that the new and high-tech enterprises can grow up and develop rapidly in the fierce market competition as long as they are provided with a favorable system and mechanism, a sustained innovation capability and a proper market strategy. The development history of the market economy over 300 years has provided evidence for this. Many multinational companies such as GM, Phillips and Siemens have all expanded from small businesses that started from small businesses in a garage or a workshop. Therefore, under the condition of the socialist market economy, we must attach particular importance to new and high-tech enterprises and help them grow up and develop in a snowballing mode in the fierce market competition.


III. The Future Mission and Direction for Development of Torch Program


The Party's 16th National Congress established the objectives of building a well-off society in an all-round way and set forth explicitly to take a new road to industrialization, to persist in using IT to propel industrialization and actively develop new and high technology industries to provide breakthroughs in stimulating economic growth. The coming two decades henceforth are a key period in the modernization process of our country, which carry on from the past and lead to the future. Based upon an earnest sum-up of the experiences in the practice over the past 10-odd years, we should thoroughly carry out the policy of "Developing high technology and realizing the industrialization" in accordance with the requirement proposed on the Party's 16th National Congress. We should make great efforts to create a more favorable comprehensive environment for the development of new and high-tech industries, to intensify the construction of the public service platforms for the industrialization of new and high technologies and to push the STIPs to implement the "Upgrading Strategy" with an accelerated speed. We should strengthen the cooperation with the relevant departments via coordination and synergizing so as to promote concertedly the development of new and high-tech industries in our country and fully exert the function of Torch Program in building a well-off society in an all-round way.


(China.org.cn September 17, 2003)

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