Facing a growing ban on core technology transfer to China, State Councillor Chen Zhili urged Chinese scientists and enterprises on Friday to become more innovative in building up the nation's research strength.

She said the country will invest more capital to make breakthroughs in key technologies and offer preferential taxation and financial solutions to help enterprises become involved in the endeavor.

"Many lessons have taught us that some countries don't lift barriers when we need technologies to improve people's lives and build up national defence," Chen told Friday's science and technology meeting, which was attended by nationwide science officials via a video-conference system.

Chen said the priority of the government's work in science and technology this year is to create an environment that is conducive to innovation, encouraging the nation to develop more home-grown patents.

Currently, nearly half of all the technologies applied in China originate overseas, a situation that has led to legal disputes between Chinese enterprises and overseas patent-holders.

Such disputes are likely to become increasingly common if the country remains heavily dependent on foreign technology. "It's not easy to obtain patent transfers in high-tech fields from developed countries because restrictions are still being enforced," said Chen.

She said the negative trend has even slowed the pace of China's economic restructuring.

She urged enterprises to play a bigger role in changing the trend and turn research towards innovation as China's market-oriented reform has already created an environment for them.

"International experiences indicated that enterprises, especially those of medium and small size, should perform an idea role in the endeavor," said Chen.

Statistics indicate that enterprises in developed economies earmark at least 5 per cent of their annual revenues to research and development. But in China, the rate is no more than 1 per cent.

China used 184 billion yuan (US$22 billion) - 1.35 per cent of its gross domestic product (GDP) - in 2004 to aid scientific research and development. The rate was 1 per cent in 2003, according to figures released at the meeting by Xu Guanhua, minister of science and technology.

He also said the ability to innovate is a key factor for any country looking to compete in the global economy.

He stressed the importance of expanding international exchanges and co-operation to achieve innovation.

Since the 1980s when it embarked on reform, China has invested huge capital in following up science and technology development and research in developed countries.

The "following strategy" has realized many achievements and breakthroughs, which have made great contributions to China's social and economic development.

But problems have occurred as a result of China's lack of original inventions and findings, which are critical in the country's modernization drive.

The central government's efforts to set up a national mechanism for technological innovation began in 1999.

"We need more efforts to further prompt the national strategy," said Xu.

(China Daily April 2, 2005)