China's top economic planner has adopted a fresh strategy for high-tech industry, with the emphasis shifting from expansion to beefing up the capacity to innovate.

The transformation has been written into the 11th Five-year Plan for High-tech Industry (2006-2010) released on Friday by the National Development and Reform Commission, with the approval of the State Council, China's Cabinet.

Industrial expansion has been demoted to fourth rank with the new top three priorities being innovation, optimizing industrial structure and going international.

Under the plan, domestic high-tech firms should see the number of patents they take out double between 2005 and 2010 and achieve more than half of their industrial output and 15 percent of their exports from locally-invented new high technologies.

Geographically, the Yangtze and Pearl River Deltas and the Circum-Bohai Sea Region have been marked out as major innovation bases, with big cities and high-tech industrial parks required to play the leading roles.

Integrated circuits, software engineering, new generation telecommunications, internet and digital audio and video applications, advanced computing, bio-medicine, civil aviation, satellites and new materials have been selected as key development areas.

The government said it would channel more money from both the capital markets and public finance into the new high-tech industry, move more aggressively in education and training, establish industrial standards and encourage high-tech companies to make use of foreign investment.

Military defense companies have been encouraged to expand collaboration with civil companies while monopolistic industries will be broken down.

China's high-tech industry generated more than 944 billion yuan in industrial output and 270 billion yuan in exports last year, up 20 percent and 25 percent respectively.

(Xinhua News Agency July 7, 2007)