Innovation Capability of Chinese State Owned Enterprises (SOEs) and Future UK Business Engagement.

The purpose of this project is to develop a pioneering collaboration and significant relations with the Ministry responsible for China’s State-Owned-Enterprise (SOE) sector: State-owned Assets and Supervision Administration Commission of the State Council (SASAC).

SASAC accounts for around half of all SOE assets across China, a sector which, according to SASAC makes up one-third of China’s GDP.  One of SASAC’s many roles include rationalising and reforming the SOE sector.  It decides which sectors remain under state control and which should be transformed into ‘competitive’ (quasi private) industries.  Some SOEs are emerging as market leaders, many are now publicly listed, 14 are in the Fortune 500.  Through new SOE levies, SASAC is investing in the innovation capabilities of selected central SOEs, consolidating their sectors and building them into global leaders.

The project will develop indicators to assess the innovation capacity of SOEs in three pilot sectors (electronics, pharmaceuticals, automotive), as well as identify opportunities for business to business collaboration in these sectors.

To be completed in March 2010, the project involves a range of activities to maximise the future opportunity for R&D from China to the UK.

The main outputs will be:

• Metrics to evaluate indigenous innovation capability in China’s SOE sector (company and sector level, using a concept of innovation that covers the full value chain).
• Pilot implementation and analysis led by Zhejiang University and Cambridge University.
• The development of network partnerships between UK-Chinese firms based on value chain complementarities emerging from the analysis and dissemination plans provided by Cambridge University.

For further information including access to the reports on this project upon publishing, please contact Laurence Jia at laurence.jia@fco.gov.uk