China will make more effort to support enterprises in the development of new technologies in a bid to enhance the country's overall innovation capability, according to Xu Guanhua, China's minister of Science and Technology.

Xu said at the China Development Forum 2006 on Monday that enterprises should be the driving force in the nation's innovation system.

He said that Chinese enterprises are poor innovators due to insufficient investment in R&D. About 25 percent of Chinese enterprises have their own R&D institutes and their R&D expenditures only account for 0.78 percent of the sales revenues.

Statistics show in developed countries, 80 percent of multinationals have established R&D institutes and they spend at least five percent of their sales revenue on R&D. At present, multinational enterprises have built up 750 R&D institutes in China.

China's technological and scientific capacity has not kept pace with the country's sustained rapid economic development and China still buys or borrows key technologies from other countries.

Insiders say the lack of an environment conducive to innovation is an embarrassment for China.

Xu said the government should work out preferential policies in order to encourage innovation, noting that China will pave the way for small and medium-sized enterprises to attain more funds for their technology innovation, considering their important roles in China's economy.

Multinational R&D centers in China are also part of China's innovation system, which will contribute to the development of technology innovation, Xu added.

(Xinhua News Agency March 21, 2006)