China will have 500 top innovative firms by the end of next year, sharpening its competitive edge in the international market, Vice Minister of Science and Technology Li Xueyong has said.

China has taken a series of steps to shift its development base from resource and labor to technology and innovation.

About 184 companies were added to the country's trial innovative firms' (TIF) list on Friday to boost the country's Technology Innovation Guidance Program. The Science and Technology Ministry, the Assets Supervision and Administration Commission (SASAC), under the State Council, and the All-China Federation of Trade Unions jointly launched the program in late 2005.

The new TIFs are from the key development sectors such as natural resources, agriculture, IT, biotechnology and environmental protection.

"More favorable policies and regulations, including those on taxation, will be adopted to help build up an innovative environment to push forward the program," Li said.

Key laboratories and industrial R&D centers will be set up in the TIFs, with provisions of more training on management and IPR protection, Li said.

The country introduced 103 TIFs last year, with half of them having an R&D budget of more than 6 percent of their total revenue last year.

The country's 287 TIFs account for more than 30 percent of its industrial assets, SASAC Deputy Director Shao Ning said. "These firms, all of which are large are already leaders in their sectors, will become the country's technology leaders with their independent core technology," Shao said.

Innovation is vital for the survival and development of a firm in today's world, Tsinghua University Liu Jisheng said.

"The expansion of Chinese firms has mainly depended on mergers and acquisitions, rather than on building up their core competitiveness, represented by technological innovation and intellectual property rights," Liu said.

For example, the average expenditure in R&D of 411 of the country's top 500 firms last year was only 1.45 percent of their revenue, while the international norm is to spend at least 5 percent.

(China Daily December 17, 2007)