BEIJING - Global
business giants, which previously loathed binding
requirements to transfer technology as a condition
for being allowed to directly invest in China, are
now eager to move their research and development
(R&D)facilities to the world's biggest and
most energetic market.
In response to the
latest policies to encourage the introduction of
advanced foreign know-how, many multinational
companies have made China one of their priority
locations for R&D centers.
Dr Li
Wanlin, senior vice president of Siemens (China)
Telecommunication Ltd, said in an exclusive
interview with Xinhua that the establishment of
Siemens China R&D centers was a vitally
important strategy for the German company's development.
"If
we only manufacture and sell our products in
China," said Dr Li, "Chinese [will] never take us
as trusted partners."
Moving R&D
centers to China is not only an instrumental
measure for shortening the duration from R&D
to technology commercialization, but also a
touchstone for our confidence in China's economic
prospects, Dr Li said. Rich in highly qualified
engineers, Dr Li said, China had already developed
its own cutting-edge technologies in many advanced
fields, such as mobile telecommunications and
servers.
Lu Zheng, a recognized economist
who heads the Chinese Academy of Social Sciences
Institute of Industrial Economics, said, "By
attracting more and more localized foreign R&D
centers, China substantively becomes higher in the
hierarchy of [the] global economy."
A
Ministry of Commerce survey showed that by June
2004, multinationals, including GE, Intel and
Microsoft, had set up more than 600 R&D
centers in China, with expenditures of more than
US$4 billion. The establishment of these
foreign-owned R&D facilities, with employees
flowing freely in the Chinese job market, has
stimulated technological upgrades of Chinese
companies as well as helped to improve the
innovation capacity of local engineers.
For Siemens, which is optimistic about the
future of China's economy, the decision to move
its R&D centers to China was nonetheless hard
to make. "Why do we need to transfer our R&D
centers to China and what do we do without
sufficient research and development capacity?"
many senior German colleagues asked Dr Li, who is
German-educated but strongly supports the idea of
the China-bound global redeployment.
Getting the go-ahead from Siemens' top
leadership, Dr Li kicked off 1998 in Beijing the first Siemens
R&D center, which collaborates with Datang, a
leading Chinese company in mobile
telecommunications, to work on third-generation
standards for mobile telecommunications, or
TD-SCDMA. The Siemens center is now leading all
others in developing new technologies based on the
TD-SCDMA standards, which are masterminded by
Chinese and may prevail in the huge Chinese market
in years to come.
"Siemens headquarters is
no longer satisfied with mandating peripheral
R&D missions to the Chinese centers, but core
and the most advanced technologies instead," Dr Li
said. Siemens has now a total of four Chinese
R&D centers, in Beijing, Shanghai, Nanjing and
Hangzhou. More than 1,000 Siemens engineers and
specialists are focusing on network solutions,
technological applications, hardware and software,
and sophisticated technologies superior even to
the 3-G technology.
According to
statistics, Siemens applied in 2005 for about
5,700 patents, with a year-on-year increase of
15%; most of these were new inventions.
"Innovation should not be carried out only by
engineers. Everyone [can] have new ideas every
day," Dr Li said.
The German company has
tried to create an innovation-friendly environment
for all its employees. Siemens has prepared tens
of millions of euros worth of innovation funds to
finance 30 innovative ideas annually. Some of the
30 annual innovative ideas have been
commercialized into successful products.
The enthusiasm about innovation of Siemens
and its peers has spurred Chinese companies to
allocate more money to R&D. One of China's
leading telecommunications infrastructure
manufacturers, Huawei, now annually spends 10% of
its revenues on research and development. The
company already owns 1,028 patents.
But
R&D spending by Chinese firms is still low on
an international scale. Statistics show that from
1991 to 2003, the R&D outlays of China's large
and medium enterprises were between 0.4% to 0.8%
of their revenues, much lower than the 3% rate in
developed countries.
According to the
state's medium- and long-term development plan for
science and technology, China's overall R&D
outlays are to reach 2.5% of its gross domestic
product by 2020, and China is encouraging domestic
enterprises to assume a key role in innovation.
