Chinese private firms lack innovation spirit

BEIJING - Privately-owned companies in China rely on copying their counterparts' technology with few bothering to improve and innovate, a report has concluded.

The Report on Chinese Non-governmental Enterprises' Competitiveness 2012 found that of those surveyed 36.4 percent of the country's private companies had not set up their own research and development center during the past three years.

The report, released Saturday by the Center for Private Economy Studies under the Chinese Academy of Social Sciences, surveyed 622 private firms in 19 provinces and municipalities. It included Zhejiang, an eastern region boasting many private companies.

"The overall independent innovation capabilities of Chinese privately-owned companies are relatively weak and they are in urgent need of transforming and upgrading their industrial development mode," the report concluded.

According to the report, only 35.2 percent of enterprises have shifted from labor-intensive products to those with high technical input in the past three years.

While urging private enterprises to break away from traditional development methods, the report proposed the country set up a public technology service network that will help companies to utilize latest technological breakthroughs.

In addition, the report recommended favorable taxation and financing systems that will ease private companies' financial burdens during the transformation.