China’s policies to prioritize, fund and deploy clean technology R&D and innovation over the short and medium term stem from an ambition to emerge as a global power in science and technology through clean technology R&D and innovation.
Mid-to long-term technology development
In January 2006 China’s government published the Medium-to-Long-Term Science and Technology National Plan (S&T National Plan). The plan establishes the government’s front-and-center role in determining the direction, quality, and quantity of China’s R&D and innovation efforts to 2020. The plan sets 4 quantitative targets and 5 strategic focuses, under which there are 11 key fields and 68 priority subjects. Of the 5 strategic focuses, top priority is given to technology related to energy, water resources and environmental protection.
Short term technology development
Based on the S&T National Plan, the Ministry of Science and Technology (MOST) formulated the National 11th Five-year Development Plan of Science and Technology. This provided short-term targets and goals for China’s R&D and innovation activities from 2006 to 2010. Consistent with the S&T National Plan, the 11th Five Year S&T Plan lists energy and environmental protection as key areas to be targeted. Specifically, the plan highlights three key clean technologies: building key energy-saving technologies, 2-3 MW wind turbine commercialization, and high quality transmission technology and equipment.
Funding of clean technology R&D and innovation
In the past five years government R&D appropriations have increased dramatically, from 70.3 billion yuan ($11 bil) in 2001 to 168.9 billion yuan ($26 bil) in 2006. As a result, the share of R&D in total government expenditure increased from 3.7% to 4.2% from 2001 - 2006 (MOST 2007). Among the various publicly-funded S&T programs (Table 3), the 863 & 973 programs provide the most direct funding sources for clean technologies.
863 Program: Also known as the State High-Tech Development Plan, the 863 Program was created to stimulate the development of advanced technologies in a wide range of fields in order to render China independent of financial obligations for foreign technologies. The program has changing focuses and priorities, depending on the needs of national economic development. During the 11th Five Year Plan, the 863 program set up 10 focus areas, including energy technologies. Within the energy category there are four technology priorities: hydrogen and fuel cell, energy efficiency, clean coal and renewable energy. A total of 1.12 billion yuan ($172 million) has been invested in these priorities, with hydrogen and efficiency technologies receiving the majority of funding (table 4).
973 Program: Complementing the 863 Program, which focuses on specific technologies, is the National Basic Research Program, also called the “973 Program.” Since its inception, core focuses of the 973 program have been energy, natural resources conservation, and environmental protection. From 1998 to 2008, the program supported 382 projects with a total funding level of 8.2 billion yuan ($1.3 billion), of which 28% went to energy, natural resources conservation and environmental protection (Figure 2).i During the 11th Five Year Plan period, the 973 Program’s energy focus and financing targets the following topics:
- Basic research on the distribution and safe mining of deep coal resources and coal-bed methane.
- Basic research on efficient and environmentally sound usage of coal.
- New theories and methods on more efficient exploitation and utilization of oil and natural gas.
- Major scientific issues related to China’s large grid system.
- Key scientific programs related to large-scale and pollution-free production, storage and transmission of hydrogen fuel.
- Exploration of utility-scale renewable energy and new energy development.
- Exploration of large-scale nuclear fission and fusion development.
- Key scientific issues related to energy efficiency improvement.
Both the 863 & 973 programs are funded and managed by the MOST. At the local level, provincial and municipal governments are also actively involved in funding R&D. In the past 10 years local Chinese governments’ S&T appropriation has steadily increased. In 2006, Shanghai topped the nation in R&D appropriation, with a total investment of 9.5 billion yuan ($1.5 billion). This accounted for 5.2% of Shanghai’s GDP in the same year.
Promoting international collaboration on clean technology
In November 2007, the MOST and National Development and Reform Commission (NDRC) jointly launched the International Science and Technology Cooperation Program on New and Renewable Energy. The program’s goals are twofold: diversifying the sources of technology imports, and expediting technology transfer processes between China and other countries. The program has identified five priority technologies for international collaboration (Table 5). The program has greatly enhanced China’s efforts in international collaboration. Already, China has signed 103 cooperation agreements with 97 countries.ii A significant number of these agreements have a focus on new energy and renewable energy development. The EU, the US and Japan are the top three partners China seeks collaborative opportunities from. In July of 2009, US Secretary of Energy Steven Chu together with Chinese Minister of Science and Technology Wan Gang announced plans for a joint US-China Clean Energy Research Center.
China utilizes an array of complementary policy measures to spur domestic R&D and innovation in clean technology. These measures include:
- designing a national-level S&T strategy prioritizing clean energy;
- establishing direct funding programs to support clean energy R&D;
- capitalizing on public-private synergies to bring together multi-sector expertise;
- pursuing a “going-out” policy of global engagement on clean energy development; and
- incentivizing the involvement of the private sector in clean tech innovation.
For a more complete list, see China’s Policies to Stimulate Private Sector R&D Investment
In the decades ahead, most of the growth in global energy demand – 90% by 2030 – will come from emerging countries. If greenhouse gas emissions are to be constrained, large-scale clean technology deployment is therefore especially vital in the developing world. China’s comprehensive efforts to lay the groundwork both to achieve a domestic clean energy economy, and to assist other developing countries to do so, indicate its commitment to becoming a global player in the clean technology revolution.
This ChinaFAQs factsheet was largely adapted from, “An Emerging Revolution: Clean Technology Research,
Development and Innovation in China” by Xiaomei Tan (WRI) and Zhao Gang (CASTED) published December, 2009.