China eyes innovation to spur growth

Li Keren holding his plane model Mr Keren says he is very protective about the design of his plane

Related Stories

At 57 years old, Li Keren is at an age when most people start thinking about retirement.

But instead Mr Li has turned his hobby into a business and became an entrepreneur designing model aircraft.

You can sense his boyish enthusiasm as he runs through the final checks of a model plane on the outskirts of Beijing.

"I think the biggest difference that I have with others my age is that I still have a dream," he said. "I wake up every day feeling energetic and more driven."

Operating the control panel in his hands, he wriggles all of the plane's flaps and gives the propeller a quick whirl.

And then it is off - but not for long. The plane races about 40m down the road before sharply turning right and ends nose down in the soil of a field.

First rule of being an entrepreneur: learn from your mistakes. Mr Li chases after the plane, looking a bit perturbed.

The orange propeller is broken before the aircraft has even got airborne. But Mr Li quickly changes the propeller and soon the aircraft is looping around us in the sky above.

Start Quote

Li Keren

When it comes to copying, the Chinese are the best in the world”

End Quote Li Keren Entrepreneur

Mr Li employs eight people in his home city of Chongqing. He tells me he has sold dozens of the planes for about $300 (£183) each.

But what makes Mr Li proudest are his innovations in the plane's design. He has built remote-controlled doors on the bottom of the aircraft that mean you can drop firecrackers when it is in flight.

It is all a bit of fun, he insists. But Mr Li is serious about protecting his designs.

"When it comes to copying, the Chinese are the best in the world," he said.

"I fear that if I don't have a patent for my design that it would simply get stolen. For that reason, I don't even give people a drawing of my plan when asked."

Government support

While copyright abuses and intellectual property theft remain rampant here, China is desperate to bottle the can-do, creative spirit embodied by Mr Li.

The government is pouring billions of dollars into the creative industries to support a new breed of entrepreneur in the hope of creating higher-end products that will generate higher-paying jobs.

While the government still wants to see "made in China", it wants to see created, designed and innovated in China as well.

Mr Yang's animation studio Mr Yang's animation firm has benefitted from government measures aimed at spurring innovation

As part of this national blueprint, the authorities built a $690m animation facility in the port city of Tianjin - close to the capital, Beijing.

The vast, sprawling complex - it looks like a university campus - opened in 2011 and is home to hundreds of animation, film and computer game companies.

The companies pay below the market rates for their offices. They also have access to top of the range facilities such as 3-D studios.

One of the animation companies is run by Yang Zhengxiang. The 39-year-old produces cartoons and animated films in the style of traditional Chinese paintings.

He says that with government support he has managed to expand his business from 10 staff to almost 70.

"Without government support we'd still be eating, living, and working in a single apartment," he tells me.

"I wouldn't be able to pay insurance for my staff and I would have trouble holding onto them. Parents used to come to our studio and drag their kids away. That doesn't happen anymore."

Growing need

After years of blistering expansion China has seen its growth rate slow in recent years.

One of the reasons has been an economic slowdown in China's key export markets such as the US and eurozone, which has hurt demand for its goods.

That has prompted Chinese policymakers to take measures to sustain a healthy rate of growth going forward.

A worker at a factory in China China is looking to move beyond manufacturing low-cost goods

At the same time, China is also trying to move away from the label of being a manufacturer of just low-cost goods.

Policymakers are keen for Chinese businesses to make goods that would not just help boost demand for its exports, but also create higher paying jobs.

The hope is that higher wages would eventually see people spending more money and spur domestic consumption and future growth.

And Beijing is betting big on innovation - seen as one of the key factors towards achieving that aim.

But in a country geared towards conformity rather than creativity it will take more than just money to bolster this industry.

More on This Story

Related Stories

More Business stories

RSS

Business Live

  1.  
    11:49: Household incomes Douglas Fraser Business and economy editor, Scotland
    IFS graph on living standards

    retweets: "The rapid fall and slow rise of living standards: new IFS projections and analysis."

     
  2.  
    11:32: Areva cost savings
    Areva building

    The French state-controlled nuclear group Areva has a new strategy. It will focus on its nuclear business, which will boost its partnership with utility EDF. It's made losses in the past four years. Now it plans to have made cost savings of 1bn euros (£727m, $1.12bn) by 2017.

     
  3.  
    11:21: Greggs results
    Greggs share price graph

    Greggs shares have gained well after its results - up 3.4%. Earlier it said it made gains from property disposal of £1.5m (2013: £1.3m). Its pre-tax profit was up 41.1% to £58.3m (2013: £41.3m).

     
  4.  
    Via Twitter Robert Peston Economics editor

    tweets: "A win is a win, but @George_Osborne will note ECJ ruled on ECB's lack of authority not on merit of discrimination against non-euro members"

     
  5.  
    10:55: Scottish Power
    Pylons

    Scottish Power has been banned from "proactive sales" for 12 days by Ofgem for failing to meet customer service targets. The energy supplier said it was committed to treating customers fairly.

     
  6.  
    10:43: Indian economy World Service
    Arya

    A trip not to Bollywood but Tollywood for Business Matters presenter Fergus Nicoll in the latest instalment of the programme's trip to Chennai in southern India. Fergus asks how far economic development is provoking social change and interviews Tamil language film star Arya (pictured left). Listen here.

     
  7.  
    10:29: Tesco board
    Tesco

    More boardroom moves at Tesco. Gareth Bullock is stepping down from the main board tomorrow after almost five years, but will remain a director of Tesco Bank. He follows Jacqueline Tammenoms and Liv Garfield, who said last week they would leave. Byron Grote - a director of Unilever, Anglo American, Standard Chartered and Akzo Nobel - will join from 1 May.

     
  8.  
    Via Twitter

    Simon Nixon, chief European commentator for the Wall Street Journal, tweets:

    Huge upward surprise in eurozone retail sales, up 1.1% on month compared to consensus forecast of 0.2%. More evidence recovery strengthening. @Simon_Nixon

    Shopping
     
  9.  
    10:13: Household incomes BBC Radio 4

    Shadow chief secretary to the Treasury, Chris Leslie, accepts that incomes have improved for some, but not most people: "The Chancellor has got a plan which is very much focussed on that trickle-down philosophy lavishing tax cuts on those at the top - and the people at the top are doing very well. It's the question about 90% of the rest of the country - what is happening to them? And for them life is getting much harder."

     
  10.  
    09:57: Market update

    Here are the market numbers. London's FTSE 100 is down 0.12% at 6,880.78. Frankfurt's Dax is down 0.41% at 11,234.49 and Paris's Cac 40 is up 0.05% at 4,871.87. The pound is down 0.13% against the dollar at $1.5344 and is up 0.28% at 1.3783. Ho hum.

     
  11.  
    09:48: Eurozone economy

    More good news. The January services PMI for the 19-country eurozone, which is up one point to 53.7 - but a touch under the flash reading of 53.9. "The outlook has brightened for all countries," says Chris Williamson, chief economist at Markit.

     
  12.  
    Via Twitter James Landale Deputy political editor

    Big question: is UK win at ECJ against eurozone land grab a one off or proof that UK can win EU reform battles? @BBCJLandale

     
  13.  
    09:26: Euro ruling
    Euro notes

    Good news for the City after the General Court of the European Union ruled that the European Central Bank was wrong to insist that euro clearing houses be based in the eurozone. Britain had challenged the policy, saying it went against the bloc's single market.

     
  14.  
    09:16: Economy CBI Radio 5 live

    John Cridland the CBI chief got in a couple of requests for George Osborne via Wake Up to Money: "Lower taxes on business because if you give business money they can create more jobs. But we need to invest in childcare support for low paid families. The cost of childcare is holding them back from taking jobs."

     
  15.  
    09:02: Household incomes BBC Radio 4

    Chancellor George Osborne, has been talking to the BBC: "The picture you hear, particularly from my political opponents, of the British economy, is not one reflected in this independent report. Indeed quite the opposite - what they show is that Britain is growing, that incomes are rising, that the richest have made the biggest contribution, that inequality has fallen."

     
  16.  
    08:48: Standard Chartered
    Standard Chartered

    No great surprise, perhaps, that outgoing Standard Chartered chief executive Peter Sands - and three other directors - have decided not to take a bonus for last year considering that the bank's pre-tax profits fell by a quarter to $5.1bn (£3.3bn). With a touch of understatement, chairman Sir John Peace says: "2014 was a challenging year and our performance was disappointing."

     
  17.  
    08:35: Household incomes

    More on that research suggesting living standards in the UK have now returned to levels last seen before the financial crash. The IFS says incomes are now rising at more than 1% a year. Its director, Paul Johnson, says there is not much to trumpet about: "It's astonishing actually that seven years later incomes are still no higher than they were pre-recession and indeed for working-age households they're still a bit below where they were pre-recession."

     
  18.  
    08:23: BlackBerry BBC World News

    Technology correspondent Rory Cellan-Jones has been speaking to John Chen, the boss of BlackBerry, on World Business Report. Rory asks him if he can imagine company no longer making handsets: "It's a little bit of speculation at the moment. I would say this: for our shareholders, nothing is sacred." Perhaps sales volumes speak louder than words.

     
  19.  
    Via Twitter Adam Parsons Business Correspondent

    So what does @jimmy_wales consider "an abomination"? And what does @CBItweets want from the Chancellor? Click here to listen to today's Wake Up to Money. @AdamParsons1

     
  20.  
    08:07: Eurostar sale BBC Radio 4
    Eurostar

    Sim Harris, managing editor of Rail News, tells Today that Britain's 40% stake in Eurostar went for a higher than expected £757m because there was a lack of high quality assets available to investors. He adds: "Whether it's the right thing to do is a question for George Osborne."

     
  21.  
    07:55: Legal and General results

    The insurer Legal & General said operating profits rose 10% last year to a lower than expected £1.28bn. Company pension deals helped sales of annuities to jump 28% to £44bn.

     
  22.  
    07:44: Greggs results

    Greggs has been freshening up its stores over the past year. It refitted 213 shops, opened 50 new outlets and closed 71 to bring the total to 1,650 shops as of 3 January.

     
  23.  
    Via Twitter Kamal Ahmed BBC Business editor

    Forget the IFS, the Pasty Index is in - Greggs sales up 4.5%, always a good barometer of consumer confidence. @bbckamal

     
  24.  
    Via Twitter Robert Peston Economics editor

    tweets: "Living standards back to where they were in 2007-8, but mainly for those over 60. & are rising strongly now, says IFS "

     
  25.  
    07:17: ITV results
    ITV

    ITV plans to return £250m to shareholders with a special dividend of 6.25p a share after a bumper 2014, with adjusted pre-tax profits up 23% to £712m and 39% higher at £605m on the pure pre-tax measure. Revenue rose 7% to a shade under £3bn. "ITV is now a high-growth business," says chief executive Adam Crozier.

     
  26.  
    07:06: Eurostar sale BBC Radio 4
    Eurostar

    Gemma Godfrey, head of investment strategy at Brooks Macdonald Asset Management, tells Today that the £757m the Government got for the Eurostar stake was higher than expected, but questions what the proceeds be used to fund. She believes the cash should be used to fund the next generation of infrastructure that will in turn create profits for the public purse.

     
  27.  
    07:00: Greggs results
    Greggs shop

    Greggs results hit the desk. Total sales rose 5.5% to £804m, while like-for-like sales up 4.5% - much better than the 0.8% fall in 2013.

     
  28.  
    06:49: ITV results BBC Radio 4
    Downton cast

    ITV reports annual results very soon. Toby Syfret of Enders Analysis has told Today that while channel brands have become less important than they were in the past, the decline is gradual. Programming - such as Downton Abbey - remains the crucial factor. "Good content is going to be the core of whoever is successful in the future," he says.

     
  29.  
    Via Twitter Sally Bundock Presenter, World Business Report

    tweets: "Morning. #Ukraine hikes interest rates to 30%. Plus GDP slows in #Australia and an i/v with the boss of #Blackberry. See you soon." That's on World Business Report.

     
  30.  
    06:26: Household incomes

    Big discussion about the Institute for Fiscal Studies (IFS) report on household incomes. Whether the average household income is back to levels they were at before the financial downturn struck. One measure, for the over 60s, it is. But for most of the rest of us, it hasn't got there yet. Our story here.

     
  31.  
    06:15: India rates

    India has cut its main lending rate by a quarter of a point to 7.5% in a bid to boost economic growth. It is the second time this year that the Reserve Bank of India has cut rates as inflation is running at 5.1% - well under the 8% target - on the back of cheaper oil.

     
  32.  
    06:12: Sandwiches Radio 5 live
    UK map of bread names

    Greggs figures are out in an hour or so. The market is looking for 4% growth, earnings are expected to be up 9%. The UK is estimated to spend £9bn a year on sandwiches. Wake Up to Money has been discussing what these are variously called around the country. There's a map illustrating this.

     
  33.  
    06:07: Eurostar sale

    The stake is being bought by a Canadian pension fund and a UK asset manager will buy shares for £585m and Eurostar will also hand over £170m to redeem shares which guarantee a dividend. The stake was officially valued last year at £325m.

     
  34.  
    06:02: Eurostar sale Radio 5 live

    The sale by the Government of its shares in Eurostar for £750m is under discussion on Wake Up to Money. Gemma Godfrey head of investment strategy at wealth manager Brooks MacDonald tells the programme: "After the debacle we saw when they were selling Royal Mail they had to get it right and the value has come in above expectations."

     
  35.  
    06:00: Rebecca Marston Business reporter, BBC News

    Good morning. Strap in and sit back. Today's Business Live page will have all the news, all day. Greggs and ITV results are expected to be early highlights.

     

Features

From BBC Capital

Programmes

  • Kinetic sculpture violinClick Watch

    The "kinetic sculpture" that can replicate digital files and play them on a violin

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.