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Ma Mingjie, DRC

2017-5-19

China is facing a key period both for now and the near future to lay the foundation for innovation-driven development so as to enable China to join the ranks of high-income countries. Against such a landscape, the government needs to lose no time to strengthen weak points and create a suitable institutional environment for innovation and entrepreneurship. First, compared with those countries with the capacity of innovation, China has not yet formed a market-oriented innovation incentive mechanism. 1. The market space of innovation has not been opened up. 2. The market mechanism is not sound enough, which has led to high cost of and low outcome resulting from innovations. 3. Many policy barriers exist for the results of innovation to enter the market. Second, the fundamental driving force of enterprise innovation comes from competition. Innovation is the main way for enterprises to carry out benign competition under the condition of market economy. The market economy system that encourages fair competition and protects property rights is the key to enhance innovation motivation and ability. Prosperity depends on vitality, and vitality originates from the system. Institutional innovation is the source of vitality and growth. Third, innovation system construction is a systematic engineering with many tasks to be accomplished and great difficulties to overcome and it needs a long period to generate results. However, it needs to be pointed out that there are still some key weak points to be strengthened to stimulate the enterprise innovation drive. While pushing ahead with reform across the board, the government needs to lower the threshold of market access, eliminate administrative monopoly and promote fair competition which are all major issues of reform. 1. The government needs to make Endeavour to enforce the protection of intellectual property rights. 2. The government needs to accelerate the development of multi-level capital market and broaden the channels of direct financing for businesses, 3. The government needs to implement strict bidding management to maintain market competition order.