Enhancing China's Innovation Performance: The Policy Choices

19 Pages Posted: 13 Mar 2014

See all articles by Xiaolan Fu

Xiaolan Fu

University of Oxford

Rongping Mu

Institute of Policy & Management

Date Written: March‐April 2014


Transforming China into an innovation‐driven economy has been one of the top priorities of the Chinese Government. This paper examines the policy choices involved in the extended national innovation performance framework for creating an open innovation system. Innovation capabilities, incentives and institutional frameworks are examined. The paper argues that China should continue to increase its investment in R&D and in education, and that there should also be an attempt to strengthen the incentive system at the macro, meso and micro levels. This strengthening may include reforms to: release the power of competition and guide resources towards innovative sectors; adopt appropriate human resource management, such as appraisal and remuneration systems; create effective policies for research funding management; and evaluate the efficiency of research to encourage the creativity of researchers, managers and employees. The paper also discusses the space for industrial policy in the 21st century.

Keywords: China, innovation, policy

JEL Classification: O2, O3, P4

Suggested Citation

Fu, Xiaolan and Mu, Rongping, Enhancing China's Innovation Performance: The Policy Choices (March‐April 2014). China & World Economy, Vol. 22, Issue 2, pp. 42-60, 2014, Available at SSRN: https://ssrn.com/abstract=2408219 or http://dx.doi.org/10.1111/j.1749-124X.2014.12061.x

Xiaolan Fu (Contact Author)

University of Oxford ( email )

3 Mansfield Road
Oxford, Oxfordshire OX1 3TB
United Kingdom

Rongping Mu

Institute of Policy & Management ( email )

52 Sanlihe Rd.
Datun Road, Anwai
Beijing, Xicheng District 100864
86-10-6254-2618 (Phone)
86-10-6254-2619 (Fax)

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