An Empirical Study of China’s High-Tech Industry Innovation Capability in Transition

Since the reform and opening up, the growth mode of China’s economy has essentially featured a heavy reliance on investment and exports and intense input of low-cost resources and factors. Such a mode was reasonable to some extent when China lagged behind in economic development and its economic aggregate accounted for a relatively small proportion of the world economy. With China’s continuous economic growth, however, the costs of this growth mode have become increasingly large, including resource depletion, environmental damage, a gradually widening wealth gap, significantly increased social conflicts and more frequent international trade friction. The international financial crisis and the severe recession that it triggered spelt an end to the rapid economic growth experienced since the 1980s, and especially since the turn of the new century, which caused a profound adjustment of the global economy. Consequently the external environment for China’s development has changed deeply and extensively. Urgent demands are thus generated for China to transform its economy as soon as possible from the traditional economic growth mode based on resources, capital and labour to the new mode based primarily on innovation.