China vows to spur technology development (Reuters) Updated: 2006-03-10 21:32 China will offer tax breaks to technologically
innovative companies and boost spending to promote scientific breakthroughs as
part of a new program to create an "innovation-oriented country," an official
said Friday.
The plan, announced last month by the Cabinet, calls for China to raise
spending on research to 2 percent of economic output by 2010 and 2.5 percent by
2020.
In 2005, China allocated 131.5 billion yuan (US$16.3 billion) to science and
technology spending, said Zhang Shaochun, an assistant to China's Minister of
Finance. The outlay amounted to less than 1 percent of last year's nearly 16
trillion yuan (US$2 trillion) gross domestic product.
In order to meet its target, China's finance ministry will cut import taxes
for enterprises that "undertake important national projects for major science
and technology breakthroughs," Zhang said at a press conference on the sidelines
of the annual session of parliament.
New enterprises in high-tech industrial parks will be given a two-year
exemption of corporate income tax beginning from the year they make profit and
will pay 15 percent instead of the standard 33 percent income tax after that,
Zhang said.
He also said government departments would be encouraged to buy homegrown
technology.
Direct investment will be put into technologies ranging from genetics to
energy-efficient cars in an effort to spur economic growth and improve
environmental protection, the government said earlier.
"Exploration is to be encouraged, failure tolerated, and a fine culture
favorable for innovation shall be cultivated," the Ministry of Science and
Technology said in a statement distributed at the news conference.
Leaders have tried with limited success to nurture scientific development
over the past decade, hoping to profit from new industries and to reduce China's
reliance on foreign technology.
The government has expanded university labs, encouraged companies to invest
in research and tried to lure home Chinese scientists working abroad. The number
of patents awarded to Chinese inventors has grown, but the government says the
pace of development is still too slow.
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