ABSTRACT
Building an endogenous system of innovation has been one of China’s top
priorities since the outset of reforms. Particularly since 1986, China has
embarked on an far-reaching attempt to modernize its national Science and
Technology (S&T) system through landmark national-level projects like the
High-Tech Research and Development Program (the 863 Program), the
National Plan for Long-Term Science and Technology Development, and
the ‘Torch’ Program – to name but a few. Alongside the growth of national
high-tech industries, the technological upgrading of existing industries, and the increase in domestic technology absorption capacity, one of the key
aims of the policies implemented in the last two decades is the creation of
closer linkages between reformed research institutions and commercial
enterprises (Chen and Chen 2005; Li and Hitt 2006; Segal 2003). Progress in
this direction, though far from being complete, is undeniable. Gross
Domestic Expenditure in Research and Development (R&D) as a ratio to
GDP has more than doubled in ten years, rising from 0.57 percent of GDP
in 1995 to 1.34 percent of GDP in 2005. The share of total R&D expenditures financed by industry topped 67 percent in 2005, thus signalling a
shrinking role for direct government financing of R&D activities (OECD
2007). National high-tech industries are being incubated in innovation dis-
tricts characterized by a wide array of (local level) state – university – pri-
vate sector partnerships akin to those found in technopoles around the
world (Castells and Hall 1994; Walcott, 2003).
