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China's Ministry of Science and Technology announced in Beijing Friday that it will invest seeds funds in a bid to inspire more innovative enterprises and sharpen their competitiveness in global markets.

In a new initiative incubating innovative technologies, the ministry plans to use its seeds funds to attract more investment from enterprises in research and development. While calling it an ambitious plan, Deputy Ministry of Science and Technology Li Xueyong did not provide the precise scale of the state's seeds funds.

He promised that the state will use taxation and financing leverage as well as technological transfer policies to encourage such innovation activities.

"Capacity building for innovative competitiveness will be symbolized in intellectual properties and market response to their products," Li said. The ministry will also help forge lax industry alliances combining universities, research institutes and enterprises.

In the coming five years, Li said, the ministry will encourage more enterprises to apply for state hi-tech projects. The state and regional scientific research and technological development should be more devised for addressing urgent needs of key state enterprises.

The initiative does not rule out further borrowing of technologies from overseas. However, Li said, China could not in the long run rely on developed countries for edging innovations.

China is in urgent need to speed up innovative capabilities of enterprises against the backdrop of more interwoven global economic networking, in which profits distribution is largely decided by positions in the technological know-how hierarchy.

Statistics showed that about 90 percent of invention patents are held by multinationals headquartered in developed countries. The multinationals occupy a monopoly over markets of hi-tech products and remain at the top of the hierarchy.

Latest domestic statistics indicated that only one quarter of China's 28,000 large and medium-sized enterprises have their own research and development organs. Their research and development expenditure accounted for only 0.56 percent of their revenues. Of all invention patent applications in China, enterprises from developed nations held over a half.

Some 70 percent of patent applications for computing technologies are from foreign firms, 87percent for biotechnologies, 92 percent for information-related technologies and 90 percent for semi-conductors.

Concrete steps of the initiative will include incentives for hi-tech commercialization, encouragement for more research and development centers in enterprises and establishment of uniform technical and service platform for hi-tech startups.

(Xinhua News Agency December 24, 2005)