Issue Date: March 14, 2011
China Outlines Path Forward
Business leaders in China are reacting favorably to a new five-year plan for that nation’s economy, which was outlined at the National People’s Congress in Beijing that ended on March 14. Details of the plan will be announced in coming weeks, but for now a series of reports and speeches at the Congress indicate that it will set improved health care, higher agricultural productivity, and lower pollution as national priorities.
“In its next five-year plan, China places high importance on sustainability—sustaining the environment and sustaining economic growth in areas such as modernizing the agricultural sector and upgrading industrial operations,” says Tony H. S. Su, DuPont’s president for the China region. “Some of our growth focus [in China] will be on new material applications for photovoltaic solutions, biobased materials, and automotive materials.” DuPont will further invest in R&D in China, he adds.
Pharmaceutical companies will benefit from intensified support of drug discovery and development, says Greg B. Scott, CEO of ChinaBio, a Shanghai-based life sciences consulting firm. “Very generally, the five-year plan identifies life sciences and biotechnology as one of seven key industries, so we’re expecting funding to grow significantly.”
In particular, a government program that funds drug R&D will have more money to hand out, Scott says. However, he adds, the government will institute price controls on novel drugs sold by multinational companies. With a few exceptions, such firms have been free to charge whatever the market will bear, he says.
Although China’s economy has evolved from the strict command-and-control approach under which the five-year plans were first implemented, the plans remain important because they set guidelines for government officials who approve industrial projects, manage infrastructure development, and allocate grants to industry.
In terms of environmental protection, Beijing has set a target to reduce China’s carbon emissions per unit of gross domestic product by 17%. It’s the first time that China has committed to any sort of carbon limit. Officials had earlier argued that limits would hinder economic development.
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