Despite the fact that cheap labor is one of the greatest advantages of the
Chinese economy, mechanization is becoming increasingly prevalent. And, given
the national campaign to make China an innovative country by 2020, this process
is likely to accelerate.
This is certainly the case at Decision, a chemical company in Southwest
China's Sichuan Province that, following the introduction of an
automated production line last year, notched up impressive financial results.
"It's magic, as only two technicians can finish the work which used to be
done by about 30 workers," said Decision President Peng Xiancheng, whose company
has grown into a leading private business in Deyang, the province's economic
As part of measures to promote innovation, this country has been offering tax
breaks in order to encourage the purchase of domestically manufactured
production lines. That may help boost profits, but it will also mean a loss of
In this new round of reform which started at the beginning of last year,
companies, instead of the government, are being encouraged to play a more
central role in the country's research and development (R&D) activities with
increased fiscal investment, tax breaks and even governmental procurement being
put in place.
However, less attention is paid in the policy package announced in March 2006
to helping farmers and the poor improve their scientific literacy and ability to
cope with technological changes. And during the implementation of this package
in recent months, farmers and needy people have enjoyed far less benefits than
If the government doesn't sense the urgency of this situation and adjust this
policy imbalance, farmers and the poor will be far too unskilled to find jobs in
upgraded or new workplaces, their income will not increase rapidly enough and
the growing social divide will be further widened.
Already alerted by current economic and social inequality which may result in
social unrest, China's leadership is unwilling to see this scenario materialize.
As a result, it has put social harmony high on its agenda as we head toward
In its science policy, China has learnt two important lessons over the past
30 years. One is that its market, no matter how huge its potential, cannot lead
developed countries to sell core technologies to a country with such poor
scientific literacy. The other lies in the inefficiency of its R&D and its
inability to efficiently put the results of its research into production due to
too much government involvement in these activities.
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