China still has a long way to go if it is to reach its goal of becoming one of the world's most innovative economies by 2020, according to an OECD report released on 27 August.

The report, written jointly with China's Ministry of Science and Technology, says that despite massive investment in R&D over the past decade, China could face a shortage of science graduates in the near future.

It also warns that much of China's R&D spending has been on product development rather than the original basic research likely to lead to patentable inventions. And extra funding to universities and research institutes has mostly gone towards updating equipment and facilities.

The report adds that the country remains heavily reliant on technology imported from abroad and most Chinese businesses have a limited capacity to innovate - though there has been marked improvement since 2000.

'High-technology industries . are primarily under foreign control, while traditional industries such as textiles and garments are largely domestically owned,' the report concludes. 'High-technology industries are considerably less R&D-intensive in China than in advanced OECD countries.' 

Jin Yong, a professor at Tsinghua University's department of chemical engineering, says the main players in China's innovation system - universities, research institutes and businesses - are not linked up.

'In China, there are few enterprises like Shell and Dupont reaching the capacity to support the whole process of innovation starting from raising a concept, to patent, and at last forming mass industrial production,' he told Chemistry World. 'To achieve a seamless connection between the innovation actors is of prime importance.'

Jin is heading an expert panel drawn from academia and business that will advise China's coal chemical industry on innovation. He believes the panel is an important opportunity to fully exploit China's innovation potential by coordinating each player's resources more effectively. Improving the ability of China's enterprises to innovate will be the key to sustainable economic growth, Jin says. 

But Jin disagrees that China is too focused on near market research. He believes basic chemistry research in China is quite strong, though little of that research is being turned into products and services.

Tang Youqi, physical chemist and member of the Chinese Academy of Sciences, says universities and research institutes have much more funding now than they did in the past, but the supply of researchers has not kept pace with demand. 

To address the shortfall, Tang believes that the current compulsory retirement policy, which sees men retire at 60 and women at 55, should be relaxed. 'Their valuable experience is quite a treasure for scientific innovation,' he said. 

Matt Chen