Connect with us
//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js (adsbygoogle = window.adsbygoogle || []).push({});

China

Chinese tech dominance more myth than reality

Published

on

A person stands by a sign of Huawei during World Artificial Intelligence Conference, following the COVID-19 outbreak, in Shanghai, China, 1 September 1 (Photo: Reuters/Aly Song).

Author: Marina Yue Zhang, UTS

The Australian Strategic Policy Institute (ASPI) recently released a report asserting China’s dominance in ‘critical technologies’. The report claimed that much of China’s progress has come from elaborate high-level design and long-term policy planning. It also claimed that Western democracies are losing out in global technological competition and urged them to invest more in research and form closer collaborations to curb China’s dominant positions in those technologies.

Before action is taken, it is essential to make sense of China’s rise in critical technologies and separate fact from fiction.

Claiming that China’s lead in research outputs indicates its dominance in ‘critical technologies’ is a case of equivocation. Research output does not necessarily reflect technological innovation capability. China has undeniably made significant progress in research output over the past two decades, mainly due to substantial funding from the central government for leading universities and research institutes based on a ranking-driven model.

But this model has prompted researchers to prioritise short-term incentives over long-term knowledge inquiry, which is driven by academic curiosity but accompanied by high uncertainty and risk. China has pursued the path of Western technological forerunners by imitating, assimilating and replicating existing scientific research. Once Chinese scientists reach the technological frontier, they must adjust their strategy to engage in cutting-edge and future-defining research.

When it comes to research outputs, the scale of inputs plays a significant role. In 2022, China’s total number of research and development (R&D) personnel surpassed five million person-years, creating the world’s largest scientific and technological talent pool. When accounting for purchasing power, Chinese researchers, except for top scientists, are generally less expensive than the OECD average. China has nearly double the number of full-time researchers, equivalent to the combined total of the United States and the European Union. It is not surprising to see China making strides in research output.

Yet research quantity does not always equate to quality. ASPI’s technology tracking offers aggregate comparisons across countries and technological fields, but it doesn’t capture accurate measurements of research quality. This is because its rankings of a country’s position in a specific technological field are based on publication citations. Although ASPI’s report asserts that self-citations are legitimate, citation-based indicators give large organisations a noticeable advantage in publication impacts when self-citations are included.

Another limitation of ASPI’s rankings is the insufficient weighting of journal and author influences in research, which could downplay those who conduct groundbreaking and future-defining research. When using bibliometric analytical methods such as co-citation and co-occurrence analyses, the United States outpaces China by a significant margin in many scientific fields.

Building technological innovation is a gradual and cumulative process driven by industrial R&D. China has a relatively short history of industrial innovation, which is path-dependent. For this reason, China has few advantages in established industries such as semiconductors and pharmaceuticals, where Western incumbents hold ‘patent thickets’ that curb China’s catch-up. While China contributed 27.5 per cent to total global R&D expenditures in 2022 against the United States’ 35.6 per cent, US technology giants still dominate research and innovation in critical technologies such as artificial intelligence.

Unlike the United States, China’s research and innovation progress occurs on different tracks. A conundrum has raised concerns among policymakers — while the research community celebrates breakthroughs in publication quantity, industries face many ‘chokepoints’ in critical technology supply chains.

Less than four per cent of China’s research outputs from universities have been translated into industrial innovation capabilities — much lower than in most industrial countries. Building a bridge between China’s research and innovation has become a policy priority.

Finally, the notion that China’s industrial policy plays a critical role in its research and innovation is a myth. China does not have a single industrial policy — instead, it has numerous policies that lead to intra-governmental competition, resulting in duplicated…

Read the rest of this article on East Asia Forum

Continue Reading

China

Lingang New Area in Shanghai Introduces Whitelists for Data Export to Enhance Cross-Border Data Flows

Published

on

The Lingang New Area in Shanghai has introduced trial general data lists to simplify data export procedures for companies in automotive, biopharmaceuticals, and mutual funds sectors. This aims to reduce regulatory burdens and facilitate cross-border data flows, following efforts to improve business environment for foreign companies.


The Lingang New Area in Shanghai has introduced trial general data lists aimed at simplifying data export procedures for companies in the automotive, biopharmaceuticals, and mutual fund sectors. These lists outline specific scenarios where businesses can export data out of China with reduced regulatory burdens, bypassing more stringent compliance requirements.

The Lingang New Area of the Shanghai Pilot Free Trade Zone (FTZ) has released the first batch of trial lists of general data for three sectors, facilitating cross-border data flows for companies operating in the area. This announcement closely follows the release of the Tianjin FTZ’s Negative List, which similarly seeks to facilitate cross-border data flows for companies operating in the FTZ by specifying the types of data that are restricted from being exported without certain approval procedures.

The first batch of general data lists has been provided for the fields of intelligent connected vehicles, biopharmaceuticals, and mutual funds, three sectors with a significant presence in the Lingang New Area. The general data lists are scenario-based, meaning they outline various situations in which data export is required and freely permitted. These include scenarios, such as multinational production and manufacturing of intelligent connected vehicles, medical clinical trials and R&D, and information sharing for fund market research.

The general data lists will be implemented for a trial period of one year from their date of implementation, May 16, 2024.

In January 2024, the Lingang New Area announced a new system for data management and export in the area, which included the release of two data catalogs, one for “important” data and one for “general” data. This new system will help facilitate cross-border data transfer (CBDT) for key sectors in the area by delineating the types of data that are restricted or subject to additional compliance measures to be exported (through the important data lists) and data that can be more easily exported (through the general data lists).

In March, the area released the Measures for the Classification and Graded Management of Data Cross-border Flow in the China (Shanghai) Pilot Free Trade Zone Lingang Special Area (Trial) (the “Lingang CBDT Management Measures”), which outlined the rules and requirements for this new system, including how companies can use the general data lists.

These developments follow many months of efforts by the central Chinese government as well as local authorities to improve the business environment for foreign companies in particular, a core part of which has been resolving headaches surrounding data export.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Continue Reading

China

Published

on


The New Company Law brings substantial changes with implications for new and existing foreign invested enterprises and stakeholders. Foreign investors must assess if adjustments to existing structures

Despite recent economic challenges, many organizations’ China operations provide unparalleled access to one of the world’s largest and most competitive global supply chains. Over the past 30 years, a significant number of foreign invested enterprises (FIEs) have been established in China. As of the end of 2022, the number of FIEs operating in China had exceeded 1.12 million.

Compared to their domestic counterparts, FIEs demonstrate greater caution regarding legal revisions and are diligent in making swift adjustments. This stems not only from the closer scrutiny FIEs face from regulatory authorities but also from their commitment to compliance and maintaining a competitive edge.

Clearly, there has been a shift in China’s corporate regulations—from merely encouraging an increase in the number of companies to focusing on attracting mature enterprises and higher-quality investments. While the transition from a broad approach to a more refined one may cause short-term challenges, it ultimately benefits the company’s long-term development. By returning to the original intent of setting registered capital, it not only protects the interests of creditors but also shields shareholders from the operational risks of the company.

In China’s foreign investment landscape, while most FIEs exercise commercial prudence in determining registered capital—factoring in capital expenditures, operational costs, and setting aside surplus funds—some opt for higher registered capital levels to avoid future capital increase procedures. This typically involves lengthy document signing and registration changes, lasting 1-2 months.

Joint ventures (JVs) often impose stricter payment deadlines for registered capital in their articles of association to ensure both parties’ simultaneous contributions align with operational needs. Conversely, wholly foreign-owned enterprises (WFOEs) tend to favor flexibility in payment deadlines, often allowing full payment before the company’s operational period expires.

Given these circumstances, despite the generally stronger capital adequacy among foreign companies compared to domestic entities, many FIEs could be affected by the new capital contribution rules.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Continue Reading

China

Foreign Tourist Groups on Cruise Ships Fully Permitted Visa-Free Entry in China

Published

on

China will allow visa-free entry for foreign tourist groups arriving by cruise ship at 13 ports along the coast, starting May 15, 2024. Visitors must stay with the same ship and in permitted areas for up to 15 days. This policy aims to boost tourism and facilitate high-quality development in the cruise industry.


China’s immigration agency announced that it will grant a visa-free policy for foreign tourist groups to enter China by cruise at all cruise ports along the coast of China, starting May 15, 2024. The tourist group must remain with the same cruise ship until its next port of call and stay within permitted areas for no more than 15 days.

Effective May 15, 2024, the National Immigration Administration (NIA) has officially implemented a visa-free policy for foreign tourist groups entering China via cruise ships. This progressive move aims to enhance personnel exchanges and foster cooperation between China and other nations, furthering the country’s commitment to high-level openness.

Under this policy, foreign tourist groups, comprising two or more individuals, who travel by cruise ship and are organized by Chinese domestic travel agencies, can now enjoy visa-free entry as a cohesive group at cruise ports in 13 cities along the Chinese coast.

The tourist group must remain with the same cruise ship until its next port of call and stay within China for no more than 15 days. The eligible areas for this policy are coastal provinces (autonomous regions and municipalities) and Beijing.

Furthermore, to support cruise tourism development, seven additional cruise ports—Dalian, Lianyungang, Wenzhou, Zhoushan, Guangzhou, Shenzhen, and Beihai—have been included as applicable ports for visa-free transit.

The recent implementation of the visa-free policy for foreign tourist groups entering China via cruise ships is poised to have several significant effects. The policy will provide crucial support for the cruise economy and the overall cruise industry. By facilitating smoother travel for foreign tourist groups, it acts as a catalyst for high-quality development in this sector.

Additionally, under this policy, international cruise companies can strategically plan their global routes by designating Chinese port cities, such as Shanghai, Xiamen, and Shenzhen, as docking destinations. This move is expected to attract more cruise ships to Chinese ports, ultimately bringing in a larger number of international visitors to the Chinese market.

This article is republished from China Briefing. Read the rest of the original article.

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

Continue Reading