The CSM reports:

After 30 years of securing China's role as the cut-rate factory to the world, its central planners are pouring money and political will into becoming an innovation economy.

But like other Asian tigers before it, China is finding making the shift from textile mills to Silicon Valley isn't easy. The biggest challenge is nurturing technological creativity in a society run from the top down, says a chorus of foreign and local experts.

"The stakes are extremely high," says Lan Xue, head of the Institute of Science and Technology Policy at Beijing's Tsinghua University. "The environmental costs make it impossible to go on growing like this; we have to transform growth so it is based on technology and innovation."

China, however, "has a long way to go to build a modern, high-performance national innovation system," according to a new report by the Organization for Economic Cooperation and Development (OECD), a Paris-based think tank. "China is just about to change from an investment and low-cost driven economy to one driven more by innovation," says Zhang Gang, one of the authors of the report, released here last week. "The nature of this transition is a great challenge." The government has poured large amounts of money into meeting this challenge, doubling its expenditure on research and development as a percentage of GDP from 1995 to 2005 – when it reached $30 billion – to become the sixth-largest spender in the world. Since 2000, China has ranked behind only the United States in the number of scientific researchers, and in 2005 they published more scientific papers than their colleagues anywhere except in the US, Britain, Germany, and Japan.

To read more:

http://www.csmonitor.com/2007/0905/p01s02-woap.html?s=hns