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Rise in R&D funding supports aim to become center of innovation

Shanghai has lowered its gross domestic product growth target for the next five years while increasing investment in research and key new industries to achieve stable, healthy and sustainable development.

The city has set its GDP target at about 6.5 percent for the next five years, Shanghai Mayor Ying Yong said in the municipal government work report during the ongoing annual session of the Shanghai People"s Congress on Tuesday.

The target is lower than the average annual increase of 7.1 percent the city achieved in the past five years. Successes in deepened reforms in the free trade zone, enhanced innovation, and the improved quality of economic development were considered among the most significant achievements during the period. In 2017, Shanghai became the first Chinese city to top GDP of 3 trillion yuan ($469 billion).

To sustain the momentum, reforms and opening-up remain the government"s top priority this year among efforts to build an open economy at a higher level, said Ying while delivering the government work report.

Ying also said that in the next five years, Shanghai will increase its investment in research and development to more than 4 percent of its GDP as part of efforts to build itself into a center of technology and innovation.

A range of scientific laboratories and facilities are being built in the city to develop free electron lasers, underwater monitoring networks and live cell imaging platforms, among others.

Construction of a hard X-ray facility-an X-ray with high photon energy-will begin this year. The facility is expected to be China"s most expansive science infrastructure project.

Furthermore, the manufacturing sector of strategic new industries-such as new energy vehicles, smart manufacturing and high-end medical equipment manufacturing-is expected to grow continuously, accounting for 35 percent of the city"s total industrial output value in five years, compared with 30.7 percent in 2017.

The sector, which has become a growth engine of the city after years of economic restructuring efforts, has witnessed "eye-catching growth" over the past five years, according to Tang Huihao, director of the Shanghai Statistics Bureau. Growth in the production of new energy vehicles, smart manufacturing and production of high-end medical equipment saw an annual increase of at least 20 percent over the past year, Ying said in the work report.

Sun Lijian, professor of economics at Fudan University, said Shanghai"s lowering of its growth target demonstrates its strategic pursuit of a high-quality development model as the city places greater value on the quality of growth rather than speed.

That being said, Sun added that a growth rate of 6.5 percent is not slow and will continue to encourage investor confidence and boost consumption.

The increase of investment in research and development, up from the current 3.8 percent to more than 4 percent of GDP, is also crucial in elevating the city"s core competitiveness, Sun said.

In developed countries, such as the United States, Germany and Japan, investment in research and development usually accounts for about 2 to 3 percent, he said.

"Shanghai had a strong traditional manufacturing industry in the past, and as human labor costs rise and awareness of environmental protection grows, development of strategic new industries, such as artificial intelligence, robotics and high-end manufacturing, will better serve the upgrade of the city"s industrial structure," Sun said.


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