Page 17 - REPORT ON THE WORK OF THE GOVERNMENT

To increase China’s strength in strategic science and technology, we launched a
number of major sci-tech innovation projects and stepped up efforts to secure

breakthroughs in core technologies in key fields.
We gave full play to the role of higher education institutions and research
institutes and supported the development of new types of R&D institutions.
Further strides were made in building international and regional centers for

scientific and technological innovation and comprehensive national science centers.
We provided support for basic research and applied basic research, with our
country’s spending on basic research doubling over the past five years.
The systems for research projects and funding management were reformed to

grant greater autonomy to research institutions and researchers and relieve
researchers of numerous administrative chores.
Intellectual property rights protection was bolstered to encourage innovation.
International science and technology exchanges and cooperation were promoted.
We leveraged market-based mechanisms to encourage enterprise innovations.

The additional tax deduction for R&D expenses was progressively increased,
particularly for manufacturing enterprises and small and medium sci-tech
enterprises, with coverage rising from 50 percent and 75 percent, respectively, to
100 percent for both. This policy was extended to cover all eligible sectors on a

temporary basis. All this provided policy support to enterprises for carrying out
basic research and purchasing equipment. In total, annual innovation tax breaks
and incentives exceeded one trillion yuan.
We also developed financial policy instruments to facilitate innovation and

guided the development of venture capital. Thanks to these efforts, R&D spending
by enterprises has maintained double-digit growth, and a large number of
innovative enterprises have emerged.
Industries were encouraged to develop toward the medium- and high-end.

Priority was given to manufacturing in the development of the real economy, and
the stable performance of the industrial sector was ensured. The share of
manufacturing in the economy was kept largely stable.
Laws, regulations, and standards on environmental protection, quality, and
safety were strictly implemented, and outdated production facilities were shut

down. We worked to shore up weak links in the industrial and supply chains of
key industries. A number of industrial foundation reengineering projects were
launched.

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