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The Ministry of Science and Technology
People's Republic of China

N0.287 Febriary 28,2002


* China's New Catalog for Foreign Investment

* Genetically Modified Bioproducts Check

* S&T Impacts on Economic and Social Development

* Encouraged S&T Advancement at Grassroots Level

* China-US Technical Innovation Seminar

* China's NIQ

* Home-Made HIFU into UK


China's New Catalog for Foreign Investment 

With the approval of the Chinese State Council, the new Catalog for Foreign Investment Guidance jointly published by the State Development Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Co-operation on March 11, 2002 will come into force on April 1, 2002. As a result, the old Catalog bearing the same title jointly published by the State Development Planning Commission, the State Economic and Trade Commission and the Ministry of Foreign Trade and Economic Co-operation on December 29, 1997 under the approval of State Council will cease to effect on the same day.

The new Catalog is of 371 entries subtitled under four categories for encouraged, allowed, restricted and prohibited. In the new Catalog, the classification of industries or products is done on statistics based classification approaches usually applied in national economy and restriction category is no longer sub-divided into Class A and B as the old one was. The new Catalog is of the following improvements: 1) sticking to further opening to the outside world, encouraging foreign investment in China. The entries falling under the category of the encouraged are increased from 186 to 262 in number while the restricted down from 112 to 75. The restrictions on the equity shares of foreign investors got loosen. For example, the provision on the majority equity holding by the Chinese party has been outdated when it comes to the investment in piers for common use in ports; some areas previously prohibited for foreign investment such as telecommunication, gas, heating, water supply and drainage system are opened up for foreign investment for the first time in the country; 2) being in line with its promise before WTO, China will further open its service and trade areas such as banking, insurance, commerce, foreign trade, tourism, telecommunication, transport, accounting, auditing and legal affairs according to its promised areas, quantity, operation scope, equity proportion and timetable. In the meanwhile, it will list relevant promises as Appendix to the Catalog; 3) encouraging foreign investment in China's western section by loosening restrictions on equity proportion and industrial sectors when such investment is made there; 4) taking full advantage of market competition mechanism and placing general industrial products under the category of the allowed so as to stimulate industrial and products upgrading through competition.

As is revealed by the Catalog, in the near future China will encourage foreign investment mainly in the following areas: 1) foreign investment in transforming traditional agricultural system, developing modern agriculture and promoting industrial process of agriculture; 2) foreign investment in infrastructures and basic industries such as transportation, energy, raw materials and etc.; 3) foreign investment in high tech industries such as electronics and information, bioengineering, advanced materials, aviation and space, encouraging foreign investment in setting up research centers in China; 4) foreign investment in the application of advanced proven technologies to transform traditional industries such as machinery, light and textile industries, realizing upgrading of facility industries; 5) foreign investment in the projects related to integrated utilization of resources and renewable resources, environment protection and urban infrastructures; 6) foreign investment in the industries in the western region that have their special strength so as to support the strategy of west development; 7) foreign investment in the category of the allowed for full products export.

It is reported that starting from the date of enactment, the foreign invested projects in the category of the encouraged will enjoy tax holiday for imported equipment and import added-value tax.

Genetically Modified Bioproducts Check

It is revealed from the source of Office for Security Management of Agricultural Genetically Modified Bioproducts under the Chinese Ministry of Agriculture that starting from March 20, 2002, all genetically modified agricultural bioproducts under 17 species in 5 classes defined by the Identification Catalog shall be marked if they are to be sold in Chinese domestic market. It is reported that China has exercised all-round control over the whole process from study to experiment, production, processing, operating and import and export of genetically modified agricultural bioproducts.

By the end of 2001, the Chinese Ministry of Agriculture had received 700 and more applications for security oriented assessment of genetically modified agricultural bioproducts and 52 domestic applying institutions and 4 foreign companies were treated equally for their applications. Up to date, China has not granted production permit to most genetically modified agricultural bioproducts related to food, edible oil and other edible crops except genetically modified cotton which is allowed to grow strictly within the areas approved by the Ministry of Agriculture for security reason.

To tighten up the security control of genetically modified bioproducts, the Chinese State Council issued on May 23, 2001 the Regulations on Security Management of Genetically Modified Agricultural Bioproducts (hereinafter referred to as the Regulations). To ensure the smooth enforcement of the Regulations, the Ministry of Agriculture on January 5th, 2002 publicized three by-laws: Methods on Security Evaluation and Management of Genetically Modified Agricultural Bioproducts, Methods on Security Management of Imported Genetically Modified Agricultural Bioproducts, and Methods on Identification Management of Genetically Modified Agricultural Bioproducts which came into effect on March 20, 2002.

Genetically modified agricultural bioproducts mentioned in the Regulations and other three supporting by-laws are defined as animals, plants, microbes and associated products genetically modified through genetic engineering techniques for the purpose of agricultural production or agricultural produce processing, mainly including genetically modified animals and plants (including seeds, stud stocks, aquatic fries) and microbes; genetically modified animals and plants, microbe products, genetically modified agricultural products for direct processing; seeds, stud stocks and aquatic fries, pesticides, vet medicines, fertilizers and additives containing the elements of genetically modified animals or plants, microbes and other products. The Methods on Security Evaluation and Management of Genetically Modified Agricultural Bioproducts stipulates that all activities on research, testing, production and import of genetically modified agricultural bioproducts on the Chinese territories shall go through security evaluation.

Methods on Identification Management of Genetically Modified Agricultural Bioproducts has defined objects calling for identification, approaches, examining and supervision organs for such identification, and compiling, readjustment and issuance of identification catalogs.

S&T Impacts on Economic and Social Development

On March 20, 2002 the Chinese Ministry of Science and Technology announced the conclusion of its systematic watch on S&T advancement in the country: science and technology has produced remarkable effects on stimulating economic and social development.

To judge the S&T achievements made in economic and social systems, the Ministry of Science and Technology deployed in the 9th Five-Year Plan period watch and studies of nationwide S&T advancement.  The same efforts in 2001 (based on the data collected in 2000) were completed, being reported the following main trends in the nation's S&T advancement.

1) China's S&T budget has witnessed great increase with RMB 89.6 billion for R&D budget, or 17.9% up against the previous year and made up 1% of the nation's total GDP in the year.

2) S&T output has enjoyed bumper harvest with 6,177 invention patents granted, two times that of the previous year.

3) Remarkable progress for high tech industrial process with additional values of RMB 204.8 billion derived from the industry, or 28.8% higher than that recorded in the previous year. High tech export volume has reached USD 37.04 billion, or 50% higher than that of the previous year.

4) Science and technology activities have produced remarkable effects on stimulating the nation's economic and social development. China's per capita GDP has risen to RMB 7078, landing a real term increase of 7.1% compared with that of the previous year. In addition, environmental protection has seen encouraging achievements and information process of social life applauded for remarkable progresses.

Encouraged S&T Advancement at Grassroots Level

As is announced by the Chinese Ministry of Science and Technology on March 20, 2002, according to the result derived from the analysis of the data collected from 1,031 towns, counties and districts involved in the nation's S&T advancement survey, China's grassroots units such as towns, counties and districts have witnessed encouraging trend for their S&T advancement. These trends have found their main expressions in enhanced S&T input, intensified S&T activities and remarkably increased S&T outputs.  S&T advancements have effectively promoted system reforms, mechanism and technical innovations in these areas. Enterprises of scales have paid more and more attention to improving products quality and market competitiveness through technical innovation, applications of advanced technologies, strengthening scientific management and increasing their input in R&D activities.

As a result, S&T advancement has stimulated the economic and social development in these areas.

On the other hand, China has seen uneven S&T advancement achieved in different regions. The towns, counties and districts rated in the first places are of fine policy environment, optimized S&T resources allocations and high S&T output, enjoying apparent strength in terms of economic and social development when compared with their counterparts with lower rating. In 2000, the formers' urban per capita GDP recorded 4 times and rural 8 times that of the latter. Towns, counties and districts in the eastern, middle and western sections have seen large gaps in their respective S&T inputs.

The Ministry of Science and Technology will take further steps to strengthen local S&T activities, especially 1) pay more attention to general guidance for creating more room for local S&T development and strengthen guidance and support for the construction of regional innovation system; 2) support local S&T activities through experiment, demonstration and priority projects; encourage more involvement of locality in dedicated national projects; strengthen the construction of local S&T bases; continue to implement Sparkle and Torch Programs and relentlessly promote high tech industrial process at local level; 3) establish information sharing mechanism so as to create fine interactions between upper and lower levels; 4) strengthen personnel training and exchanges.

Recent years have seen more attention paid to S&T advancement by government and all walks of life at local level which is of positive stimulating effects on the implementation of strategy "rejuvenating the nation with science and education", strengthening the management of S&T activities and promoting regional S&T advancement.  The Ministry of Science and Technology has certified 383 towns, counties and districts such as Shijiazhuang with the honor of national role model for local S&T advancement. 


China-US Technical Innovation Seminar

The Second China-U.S. Technical Innovation Seminar was held on March 19, 2002 in Washington DC with the participation of 40 and odd representatives from Chinese and U.S. research institutions and enterprises. The participants discussed diversified topics related to technical innovation financing, network and others. The Chinese Delegation headed by Mr. Li Xueyong, Chinese Vice Minster of Sciences and Technology and Mr. Zhu Zuoyan, Vice Chairman of Chinese National Natural Science Foundation were present at the seminar.

At the opening ceremony on March 19, 2002, Li Xueyong made his keynote speech “China's Policies on Innovations”. After reviewing Chinese government's support for technical innovations since its reform and opening, Mr. Li addressed the future trends and perspectives of China's policies on technical innovations. He pointed out that China's policy on technical innovation will aim at working out a series of regulations and measures to promote R&D innovation, system innovation and mechanism innovation so as to accelerate the construction of China's innovation system and consequently its sustainable economic and social development.

Referring to the fact that the Seminar has attracted the concern and attention of economists, S&T policy makers and entrepreneurs of both countries, Vice Minister believes that this is an event meaningful for promoting the exchanges of technical innovation policies between the two countries, exploring the latest development on technical innovation theories tailored to respective situation of each country and stimulating the cooperation in the said field.

Sponsored by Science Foundations of both countries under the inter-governmental S&T cooperation framework, China-U.S. technical innovation seminar is an important component of the decade-long S&T policy dialogue series arranged between the two countries.

China's NIQ

On March 19, 2002, China published its report on national information process in Beijing. As is shown by the report, China's national information quotient (NIQ) reached 38.46. Among the indicators published, the one for information technology application runs the highest at 65.89, demonstrating that information and network technologies have become a major element raising China's information level. The report also shows that during the period from 1998 to 2000, China's information level went up by 48.6%, or 21.9% for average annual growth, much faster than the annual growth of its economy such as 7% or 8%.

As far as urban information process is concerned, Beijing sits on the top with an indicator as high as 157.22, or five times that of the nation's average. Of the total six indicators, Beijing was rated the first in five areas such as resources development and utilization, information network construction, information technology applications, information products and service and information related human resources though the second for information development environment. Beijing has recorded the highest 318.82 for its information network construction, or 8 times that of the nation's average, and also 9 times that of the nation's average in terms of its information related human resources.

Home-Made HIFU into UK

On March 15, 2002, the first proprietary large medical equipment HIFU developed by Chongqing Medical University made its way to the final destination of Churchill Hospital under Oxford University. It is reported that the said machine has been sold to the hospital for about USD 2 million.

HIFU is a high intensity focusing ultrasonic medical device developed in recent years for the so-called no-wound cancer treatment. The export of such large proprietary medical equipment made in China has virtually ended the history that China has to entirely rely on export for the supply of large medical equipment.

It is reported that Chongqing Medical University has also inked an agreement with a Singapore based company for selling its HIFU to the latter. Up to date, there have been 15 hospitals in China that have brought home-made HIFU for their clinic applications. 

China Grasps Core Technique for Aloe Processing

On January 23rd, 2002, a hundred and more aloe experts from China, U.S., Singapore and other countries and regions gathered together to witness their recognition of the techniques developed by China for separating and concentrating aloe membrane. Experts both from home and abroad agreed that the solution to the core technique restricting the development of world aloe industry has made China in a leading position among major producers of advanced industrial aloe materials in the world.

Chinese Ministry of Science and Technology has listed the development of advanced aloe raw material as a basic project for the development of China's aloe industry. Closely collaborating with Yuanjiang County, Yunnan Province, the largest aloe growing base in the country, a number of domestic research institutes have worked painstakingly for three and more years and eventually landed breakthrough progresses on the separation and concentration of effective aloe elements under normal temperature, the key technology for producing advanced raw materials of industrial applications and the first of its kind in the world.

       Comments or inquiries on editorial matters or Newsletter content should be directed to:Mr. Cheng Jiayi, Department of International Cooperation, MOST 15B, Fuxing Road Beijing 100862, PR China  Tel: (8610)68512650 Fax: (8610) 68512594