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September 05, 2008

China's Small/Medium Businesses, Biotech Companies and Physics

China's Small and Medium Size Enterprises Are to Employment and Economy

Chinese enterprises, especially small and medium ones, are facing a harder time because of the combined effects of the global slowdown, tight domestic credit, rising costs and an appreciating yuan.

About 67,000 small and medium-sized enterprises (SMEs) went bankrupt throughout China in the first half of the year, according to National Development and Reform Commission (NDRC), the country's top economic planner.

SMEs employed 75 percent of the country's workforce and created 85 percent of new jobs each year, contributing substantially to the country's economic well-being.

That's why decision makers are coming to the rescue with a host of measures, including encouraging commercial banks to make loans to SMEs by raising their credit quota.

The Beijing authorities have signaled on several occasions that they will give greater weight to keeping stable economic growth, while staying vigilant against inflation.

China's exports are actually performing better than previously thought, increasing by 21.9 percent in the first half of 2008.

Retail sales were solid with a real growth rate of 15.4 percent in July after adjusting for inflation, the strongest increase in the past 10 years, according to a HSBC report.

Investment, another major driver of economic growth, also fared well. In the first six months, fixed assets investment grew 26.3 percent from a year earlier, compared with 25.9 percent in the same period last year.

China has plenty of investment prospects as it prepares to host the World Expo in Shanghai as well as the Asian Games in Guangzhou in 2010, among many other international events.


China's Biotech Industry Built by Sea Turtles
In a reverse migration, U.S.-trained scientists are setting up biotech startups, contract-research companies, and university labs on the mainland. [report from Businessweek Magazine]

Today, 2,500 life sciences faculty at U.S. research universities are native Chinese, as are an estimated 10% to 20% of scientists in the labs of U.S. drug and biotech companies. "Ray Wu opened the door for countless Chinese students," said Pfizer's (PFE) Steve Yang.

Now this wave of imported brainpower is building bridges between the pharmaceutical industries of China and the U.S. The catalysts are returnees, known as "sea turtles," creatures celebrated in Chinese lore for their brave oceanic migrations

Princeton's Shi warns that shamefully few Chinese scientists rise to the top of major U.S. companies or research programs, compared, say, with Indians or Europeans. "Unless the U.S. solves this glass ceiling problem, you will see a serious brain drain," he predicts.

So far, China's talent gain has not been America's loss. Sea turtle ventures in China still work mainly for U.S. drugmakers. And with 9,000 Chinese students a year earning U.S. biology master's and doctoral degrees, more talent is arriving in the U.S. than is leaving. Chinese companies still don't have a critical mass of veteran scientists who can turn discoveries into products, says John V. Oyler, a former McKinsey consultant who heads Beijing-based contract research company BioDuro. "In five years, as much drug research will be done in Shanghai and Beijing as in Boston and San Francisco," he predicts. "But China's pharmaceutical industry will only be able to succeed by collaborating with the U.S."


Although in ten years this could change with China's pharma business gaining more independence over time.


China Strong in Physics
China is becoming a physics powerhouse.

Published journal articles in nanoscience with at least one co-author based in China, have seen a 10-fold increase since the beginning of the millennium, rising to more than 10,500 in 2007. If China's output continues to increase at its current pace, the country will be publishing more articles in physics - and indeed all of science - than the US by 2012.

Quantity alone however is not enough. The number of times a journal paper is cited by other academics in their own journal papers is often used as a guide to journal papers' quality. Unfortunately for China, they are currently a long way from the national citation top spot, ranked in 65th for physics, just ahead of Kuwait, with an average of 4.12 citations for each of the papers published. As China has only just started to publish large volumes of work, it is not a fair reflection.


China Leadership Targets Science and Technology
Gaining leadership in science and technology is a top priority for China

China is targeting the production of one million "new energy vehicles" in 2010. New energy vehicles are electric or hybrid vehicles.

FURTHER READING
China's technological development is getting stronger and by some measures is passing the United States.
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