BEIJING: Even as China, regarded as the manufacturing factory of the world, continues to register the highest growth rate globally year after year, the authorities have realised that the pace cannot be sustained for long without innovation. The country must harness its innovative capacity and find new, more efficient and equitable ways to deal with the strains of huge growth.

In a special address at the inaugural of the World Economic Forum's China Business Summit 2006 here on Sunday, Chinese Vice-Premier Zeng Peiyan, said: "In the new development stage, we cannot continue with the traditional development approach and growth pattern... Innovation is the soul of a nation's advancement and the everlasting driving power of national prosperity."

Pollution problems

The problems that China is faced with now are well-known and documented. In particular, breakneck investment has led to widespread industrial overcapacity. The stupendous growth, in turn, has polluted the nation's air and water while sparking an unprecedented migration of people from the poor rural west to the fast-growing and increasingly affluent cities. The fear is that even if the economy continues to grow at the current pace, the risks of even these healthy trends would eventually prove overwhelming.

Energy consumption

In such a scenario, how is the Chinese Government to achieve its ambitious goals of doubling the size of the economy — as in the year 2000 — by 2010 and reduce the per capita GDP (gross domestic product) energy consumption by about 20 per cent? The key, according to Vice-Chairman of the National Development and Reforms Commission of China Zhang Xiaoqiang, is to find smarter and more efficient ways to deliver growth. "We have to switch from our previous industrial development mode, from consuming large amounts of natural resources to a development mode based on science and technology as well as innovation," he said.

Sustaining growth

At various sessions of the Summit, the 26th in the series, this time under the theme `Sustainable growth through innovation: China's creative imperative,' participants as well as Chinese Government functionaries suggested ways and means of sustaining the growth momentum by reshaping the country's current policies and agendas. For instance, Governor of the China Development Bank and Co-Chair of the Summit Chen Yuan, felt that the country's challenge was how to stop having to import technologies and instead develop them at home. "A significant chunk of the profit has been ceded because we cannot buy core technologies right now...We hope to absorb technologies from abroad and adapt them into our own," he said.

Educational system

In his address, Baba N. Kalyani, Chairman and Managing Director, Bharat Forge and Co-Chair of the Summit, said much would depend on improving the educational system. Many executives, he said, complained that Chinese university graduates, although numerous, were not equipped with skills useful in the workplace. Noting that India was also facing similar problems, he said that never had the world seen the simultaneous take-off of two countries such as China and India.

`More people must benefit'

In another session, Minister for Science and Technology Kapil Sibal said both China and India should devise a model that reached the rural areas and benefited the common man. The economy, he said, could not flourish till the benefits were reaped by a larger section of society.

"China needs to liberalise the economy further, realising that more the number of the players in a market, the more one can contribute to their economy as well as the global economy," he said.

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