Chinese government's shifting role in the national innovation system

Abstract

This study highlights the key trends and emerging shifts in China's approach to governing innovation and tackles pertaining misconceptions regarding the locus of the Chinese government in the national innovation system. China has become the world's second largest R&D spender and it is fast climbing the global value chains. However, not without costly efforts and resounding failures. In a process of perpetual experimentation, China's policymaking is changing fast as it trial-tests new policies.Based on the analysis of policy documents at national and sub-national levels, as well as on an array of interviews with industry stakeholders, this study finds that the principal paradigm change is the fact that the state increasingly aims to become a platform creator, facilitator and strategy-setter for innovation, rather than a principal actor itself. The government plays a multitude of roles that differ significantly across industries and levels of administration, in a way that could be best described as structured uncertainty. While in some industries, the state follows the classical approach of central-led investments and heavy protectionism, in others, it acts more as a business-partner and multiplier for private investment. There are also those industries where the government stimulates emerging technology by completely refraining from any action or regulation.