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TEXT A

After years of prospering as the world’ s workshop, China now wants to be its laboratory as well. “Innovation” has become a national buzzword, and Chinese leaders have been tossing it into their speeches since the beginning of the year, when President Hu Jintao started an ambitious campaign to drive China’ s economy further up the value chain. True, new campaigns and catch phrases are declared by the government and the Communist Party in China all the time, and there are signs that the government intends to back its innovation campaign with more than just words.

In launching their “National Medium and Long-Term Programme for Scientific and Technological Development (2006-20) ” , Hu Jintao, Wen Jiabao, and other top officials have vowed to spend more on science and technology, and to insist on business reforms. Their goal is to move China beyond its dependence on natural resources and cheap labor, and stake its place among live economies that depend on education and information technology.

Officials say privately that the new policy emerged only after years of contentious internal debate. One divide was between nationalists, who advocated a go-it-alone approach towards developing indigenous technology, and others who were more open to international collaboration. There were abo disagreements as to whether the campaign should concentrate on scientific mega-projects or incremental innovation.

One target is to reduce China’ s dependence on imported technology to 30% or less by 2020. According to Professor Fang Xin, of the Chinese Academy of Sciences, the initiative is a matter of necessity. China must learn to innovate if it is to sustain growth. Foreign firms, she notes, reap more than 60% of the profits from China’ s high-tech exports. Other officials say that, on average, China’ s 20, 000 large and medium-sized enterprises undertake fewer than five new development projects and generate only two and a half new products each year.

The plan also calls for an increase in research and development spending from its current 1. 23% of GDP to 2. 5% by 2020, putting China in the same range as OECD countries’ current scores. Ms. Fang says banks and government departments will be told to help out with their credit, taxation and currency exchange policies. According to Denis Simon of the State University of New York’ s Levin Institute, who advises the Chinese government on science policy, this move comes just in time. “If China doesn’ t do this right. ” he says, “it risks becoming a good 20th-century industrial economy just when it needs to figure out how to be a 21st-century knowledge-based economy. ”

But to succeed, says Mr. Simon, China needs to attend to other matters as well. These include an “internal brain drain” that sees much of the country’ s best talent going to work for foreign firms in China, and the country’ s notoriously lax regime for protection of intellectual- property rights. Mr. Simon predicts that such protection will improve as more local businesses with an interest in the matter join the chorus of complaints from foreigners.

Another huge obstacle is the nature of China’ s educational system, which stresses conformity and does little to foster independent thinking. Confucian philosophy reveres the teacher above all. More innovative Western economies, according to Ms. Fang, operate under Aristotle’ s maxim: “I love my teacher Plato greatly, but I love truth more. ”