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Rebalancing economy with science and tech

By CHEN JIA in Guangzhou | China Daily | Updated: 2021-07-26 09:18
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A view of Dongguan Songshan Lake Hi-Tech Industrial Development Zone in Dongguan, Guangdong province. [Photo/Xinhua]

Just 10 days later, the bailout fund was delivered using a channel that directly transfers central government funds to primary-level governments and projects. The direct transfer was a big help in making unhindered payments toward construction fees and wages. The project received a second round of bailout fund of another 200 million yuan in December through the same route.

The government funding has helped accelerate the project construction as well as funded high-end medical equipment, said Zhang.

The medical field is one of the key areas that the Guangdong provincial government fosters by utilizing fiscal resources well.

The local government attaches great importance to the work of scientific and technological innovation with strong fiscal supports. It is planning to promote an international science and technology innovation center in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA), said Yao Lu, deputy head of the Guangdong government's finance department.

China employs various measures to support the construction of national science and technology innovation bases. The country also supports eligible enterprises in taking on research under central government-funded science and technology programs, the Ministry of Finance said.

The government also guides enterprises in increasing their research and development investment, so that they truly become the primary vehicles of technological innovation, the ministry said in a document.

According to a 2020 report on the execution of budgets published by the Ministry of Finance, among the main expenditures in the central government's general public budget is the actual total spending on science and technology, which stood at 321.65 billion yuan, or 100.6 percent of the budgeted figure.

For this year, the spending target on science and technology is 322.71 billion yuan, roughly equivalent of the previous year's figure. The national spending, which includes local outlays, will rise by 3.3 percent, showed the government's budget report.

Over the past five years, government investment nationwide in science and technology increased at an average annual rate of 9 percent, and this field remains a key priority of fiscal expenditure in China's 14th Five-Year Plan (2021-25).

This year, the central government's expenditure on basic research will increase by 10.6 percent. Part of the funds will be used to support research institutes, scientific and technology innovation centers and talented personnel in the field of basic research, the Ministry of Finance disclosed.

"The accumulation of technology in basic research is crucial, and Guangdong is exploring new mechanisms of government-led investment to support this area," said Yao.

He said that within five years starting from 2019, the provincial government and the National Natural Science Foundation of China will jointly inject 800 million yuan into a fund to finance key technology innovative projects in the GBA.

To support scientific research projects in Hong Kong and Macao, the finance department of Guangdong has conducted cross-boundary fiscal fund transfers of more than 128 million yuan, a financing mechanism that will attract universities and research institutes to cooperate with Guangdong's technology development projects, the official said.

In 2020, the total budgetary expenditure in science and technology reached 95.1 billion yuan in Guangdong, China's highest, up from 74.3 billion yuan in 2016. The average annual growth rate of the expenditure was 10.8 percent, local government data showed.

Zhao Jinsong, an official from the Guangdong government's department of science and technology, said the fiscal funds can be used as a leverage to channel more private funds into key research and development projects.

"For instance, the measure has helped promote domestic substitution of chips and some software and break the monopoly in the production of some core components and materials."

Following the government's guidance on fiscal spending, Guangzhou KingMed Diagnostics Group Co Ltd, a prominent listed company in the independent clinical lab industry, raised its research and development investment to 397 million yuan in 2020, accounting for more than 6 percent of the company's annual sales revenue, said Liang Yaoming, its chairman and CEO.

Since the outbreak of the COVID-19 pandemic, KingMed's labs completed nucleic acid tests of more than 65 million samples by the end of April, with a daily peak of about 96,000 samples, Liang said.

As KingMed has been recognized as a high-tech company, it enjoys the corporate income tax rate at a lower level of 15 percent, compared with 25 percent for general companies, and additional deduction for research and development expenses, Liang said.

Besides technological innovation, the country will support high-quality development of the manufacturing sector, with the aim of building independent, controllable, secure and stable industry and supply chains, the Ministry of Finance said.

During the annual sittings of the nation's top legislature and political advisory body in March, the ministry also announced that China would refund all due value-added tax credits to advanced manufacturing enterprises on a monthly basis.

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