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Kandy Wong

Technological innovation in China still has “much room for improvement” and the country needs financial support to develop new ideas, according to a prominent economist.
Tian Xuan, chairman of Tsinghua University’s national institute of financial research, said there is a particularly large gap with the United States.
He said nine out of the 10 biggest American firms by valuation were tech companies or funds that invested in technology.
In contrast China’s largest firm was the drinks maker Kweichow Moutai, followed by four state-owned banks. The battery maker Contemporary Amperex Technology was the only tech-related firm in China’s top 10 by valuation.
Xuan also said that Apple was valued at US$3.5 trillion, “which is two times or more higher than our top 10’s total”.
He added: “The crux of the issue is that how can the financial sector help expedite technological innovation and push the development of new quality productive forces.”
He also said foreign investment should be encouraged, because a “healthy and open capital market is necessary for enhancing innovation”.
Tian cited data from 20 international markets to argue that foreign investors had boosted creativity and modernisation.
“Foreign capital can lower the financing cost of companies and upgrade corporate governance that will scatter risks,” he said. “It’s very important to open up capital markets and let overseas institutional investors come in.”
Beijing is looking for ways to boost the economy, including “new quality productive forces” – a combination of labour with technology and infrastructure.
Tian said corporate venture capital would help accelerate innovation.
“Steady and consistent macro policy implementation, instead of random policies, can smoothly push ahead technological innovation and new quality productive forces,” he added.
Tian said “tolerance” and “accepting failure” would be a “bold capital investment” and are necessary for innovation.
“With a higher tolerance for failed attempts, a company’s number of creative outcomes that can be launched in the market also increases – this is a causal relationship,” he added.
In a report published last week, the New York-based Asia Society said “new quality production forces” are likely to be the bedrock of China’s next five-year plan.


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Tsinghua University academic says country is lagging behind the US and calls for more funding for hi-tech firms to boost innovation


Tsinghua University academic says country is lagging behind the US and calls for more funding for hi-tech firms to boost innovation.


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