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Tracking Clean

Energy Innovation

Focus on China

The IEA examines the

full spectrum

of energy issues

including oil, gas and

coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies that

will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries, 8

association countries

and beyond.

Please note that this

publication is subject to

specific restrictions that limit

its use and distribution. The

terms and conditions are

available online at

www.iea.org/t&c/

This publication and any

map included herein are

without prejudice to the

status of or sovereignty over

any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA. All rights

reserved.

International Energy Agency

Website: www.iea.org

IEA member

countries:

Australia

Austria

Belgium Canada

Czech Republic

Denmark Estonia

Finland

France Germany

Greece Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands New

Zealand Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Turkey

United Kingdom

United States

The European

Commission also

participates in the

work of the IEA

IEA association

countries:

Brazil

China

India

Indonesia

Morocco

Singapore

South Africa

Thailand

INTERNATIONAL ENERGY

AGENCY

Tracking Clean Energy Innovation Abstract

Focus on China

PAGE | 3

Abstract

In the last 20 years, the People’s Republic of China (hereafter, “China”) has

strengthened its position on the global stage as an energy innovator, as illustrated

by the stories of solar power and, more recently, electric mobility. This is the result

of several decades of increasing policy focus on technology innovation, which

underpin China’s ambitions to become a producer of knowledge and foster

innovation-driven socio-economic development. Looking forward, clean energy

innovation will play a crucial role to achieve China’s objectives of carbon peaking

by 2030 and neutrality by 2060, and ranks among core government priorities for

the 14th Five-Year Plan period (2021-2025).

This report builds on the IEA Energy Sector Roadmap to Carbon Neutrality in

China chapter on “Innovation for carbon neutrality”, and provides complementary

and new analysis and information. It maps the institutional and policy landscape

of clean energy innovation in China and shows trends for selected metrics to track

and explain progress of technology development.

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TrackingCleanEnergyInnovationFocusonChinaTheIEAexaminesthefullspectrumofenergyissuesincludingoil,gasandcoalsupplyanddemand,renewableenergytechnologies,electricitymarkets,energyefficiency,accesstoenergy,demandsidemanagementandmuchmore.Throughitswork,theIEAadvocatespoliciesthatwillenhancethereliability,affordabilityandsustainabilityofenergyinits31membercountries,8associationcountriesandbeyond.Pleasenotethatthispublicationissubjecttospecificrestrictionsthatlimititsuseanddistribution.Thetermsandconditionsareavailableonlineatwww.iea.org/t&c/Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Source:IEA.Allrightsreserved.InternationalEnergyAgencyWebsite:www.iea.orgIEAmembercountries:AustraliaAustriaBelgiumCanadaCzechRepublicDenmarkEstoniaFinlandFranceGermanyGreeceHungaryIrelandItalyJapanKoreaLithuaniaLuxembourgMexicoNetherlandsNewZealandNorwayPolandPortugalSlovakRepublicSpainSwedenSwitzerlandTurkeyUnitedKingdomUnitedStatesTheEuropeanCommissionalsoparticipatesintheworkoftheIEAIEAassociationcountries:BrazilChinaIndiaIndonesiaMoroccoSingaporeSouthAfricaThailandINTERNATIONALENERGYAGENCYIEA.Allrightsreserved.TrackingCleanEnergyInnovationAbstractFocusonChinaPAGE3AbstractInthelast20years,thePeople’sRepublicofChina(hereafter,“China”)hasstrengtheneditspositionontheglobalstageasanenergyinnovator,asillustratedbythestoriesofsolarpowerand,morerecently,electricmobility.Thisistheresultofseveraldecadesofincreasingpolicyfocusontechnologyinnovation,whichunderpinChina’sambitionstobecomeaproducerofknowledgeandfosterinnovation-drivensocio-economicdevelopment.Lookingforward,cleanenergyinnovationwillplayacrucialroletoachieveChina’sobjectivesofcarbonpeakingby2030andneutralityby2060,andranksamongcoregovernmentprioritiesforthe14thFive-YearPlanperiod(2021-2025).ThisreportbuildsontheIEAEnergySectorRoadmaptoCarbonNeutralityinChinachapteron“Innovationforcarbonneutrality”,andprovidescomplementaryandnewanalysisandinformation.ItmapstheinstitutionalandpolicylandscapeofcleanenergyinnovationinChinaandshowstrendsforselectedmetricstotrackandexplainprogressoftechnologydevelopment.IEA.Allrightsreserved.TrackingCleanEnergyInnovationAcknowledgementsFocusonChinaPAGE4AcknowledgementsThisreportwaspreparedbytheEnergyTechnologyPolicyDivision(ETP)withintheDirectorateforSustainability,TechnologyandOutlooks(STO)oftheInternationalEnergyAgency(IEA),undertheleadershipofTimurGül.ThestudywasmanagedbySimonBennettoftheEnergySupplyandInvestmentDivisionwithinSTO,aspartoftheIEACleanEnergyTransitionsinEmergingEconomiesprogramme.Theanalysiswascarriedoutandtheproductionco-ordinatedbyJean-BaptisteLeMarois(ETP).TheteamisthankfultotheIEA’spartnersinChina–particularlytheNationalEnergyAdministration,theMinistryofScienceandTechnologyandtheAdministrativeCentreforChina’sAgenda21–fortheirsupport,inputsandsecondmentstotheIEA.ColleaguesattheIEAprovidedinputsthroughouttheresearchandreviews,includingthosein:theEnergyDataCentre(SuzyLeprince);theEnergyEfficiencyDivision(JihyunLee);theEnvironmentandClimateChangeUnit(CyrilCassica);theEnergyTechnologyPolicyDivision(AraceliFernandezPales,PeterLevi,AmaliaPizzaro);theGlobalEnergyRelationsDivision(XuChengwu,RebeccaMcKimm,AlanSearl);andtheStrategicInitiativesOffice(Dr.AnFengquan,SimoneLandolina,JieXiaomeng,ShaoYinghong).WearegratefultoLouisBlanluetandZhuLinxiao,whocarriedoutresearchandprovidedsignificantcontributions.ThanksalsotoRekaKoczka(ETP)foradministrativesupport,aswellastoAstridDumond,AllisonLeacu,TalineShahinianandThereseWalshfromtheCommunicationsandDigitalOffice.ErinCrumeditedthemanuscript.ThepreparationofthisreportwasmadepossiblethroughtheCleanEnergyTransitionsinEmergingEconomiesprogramme,whichreceivedfundingfromtheEuropeanCommission’sHorizon2020researchandinnovationprogrammeundergrantagreementno.952363.IEA.Allrightsreserved.TrackingCleanEnergyInnovationTableofcontentsFocusonChinaPAGE5Tableofcontents1.Introduction..........................................................................................................................6Innovationforcleanenergytransitions......................................................................................6MappingChina’sinnovationlandscape.....................................................................................62.PatentsandsolarPV:CasesillustratingimprovementsinChina’senergyinnovation.............................................................................................8Increasingenergypatentingactivity...........................................................................................9China’stransformationfromasolarPVtechnologyimportertoinnovator...............................123.China’sinstitutionallandscapeforenergyinnovation.................................................18Whoarethekeyactorsshapinginnovation?...........................................................................19HowdoesChinasetinnovationpriorities?...............................................................................26Howareinnovationprioritiesimplemented?............................................................................334.Resourcesforenergyinnovation....................................................................................46Publicfundingforenergyinnovation........................................................................................47Energyinnovationinthebusinesssector................................................................................49Venturecapitalactivityincleanenergy....................................................................................52Talentsandhumancapital.......................................................................................................605.Knowledgemanagementandnetworks..........................................................................63Chineseresearchinstitutesanduniversitiesontheglobalstage............................................64CollaborativelearningthroughjointventuresandR&Dcentresabroad..................................66Reformstointellectualpropertyregimes.................................................................................68Domesticandinternationalcollaborationthroughknowledgenetworks..................................726.Market-pullforcesforinnovation....................................................................................80China’skeymarket-pullstrengthsfortechnologyinnovation...................................................81ThenotableroleofindustrialpolicyinChina...........................................................................82Innovationoutsidethetraditionalsystem:Thecaseofsolarwaterheatersinthe1990s.......857.WherenextforenergyinnovationinChina?.................................................................878.Annex..................................................................................................................................90Abbreviationsandacronyms....................................................................................................90Unitsofmeasurement..............................................................................................................91IEA.Allrightsreserved.TrackingCleanEnergyInnovationIntroductionFocusonChinaPAGE6IntroductionInnovationforcleanenergytransitionsAchievingglobalenergyandclimatepolicygoalswillrequiremore,betterandcheaperlow-carbonenergytechnologies.Mostenergytechnologiesarenotontracktoprovidethecleanenergytransitionstargetedbygovernments,accordingtoIEAannualmonitoring.Manytechnologiesrequiredtoloweremissionstoso-called“netzero”levelsarenotreadyformarkets,notablyinsectorshardtodecarbonisesuchasheavyindustryandlong-distancetransportation,forwhichlarge-scalelow-carbonsolutionsarenotwidelyavailable.Governmentsarecentraltothesuccessofcleanenergyinnovation,andglobalpolicysupportneedsstrengthening.InthePeople’sRepublicofChina(hereafter,“China”),supportforinnovationhassignificantlyincreasedinthelasttwodecades,asthecountrybecametheworld’smanufacturingpowerhouseforseveralkeyenergytechnologyareas,suchassolarphotovoltaics(PV),windturbinesandbatteriesforelectricvehicles(EVs).Lookingforward,China’sfocusontechnologyinnovationanddevelopmentisexpectedtostrengthen,notablytodeliveronlong-termcarbonneutralityobjectivesandpositionthecountryinglobalvaluechainsforcleanenergytechnologies.Thishasimportantimplicationsforglobalpolicydiscussions,asChina’sabilitytoinnovateeffectivelywillhaveimplicationsforglobalenergytransitions.MappingChina’sinnovationlandscapeThisreportservesasanextensiontothechapteron“Innovationforcarbonneutrality”intheIEAEnergySectorRoadmaptoCarbonNeutralityinChinaandprovidescomplementaryanalysisandinformation.ItseekstomapthelandscapeofcleanenergyinnovationinChina,inasimilarwaytothetechnologyinnovationsectionsofenergycountryreviewsforIEAmembercountries.Itaimstoidentifykeydevelopmentsinrecentyears,notablysincetheIEAlastpublishedonthetopicin2015,andtoshowtrendsforselectedmetricsthatmaybeusedtotrackprogressofinnovation.ThisreportispartofbroaderIEAworktosupportChina’svisionofacarbon-neutralfuture,andaspirestosummariseinsightsfromChina’senergyinnovationstoryinrecentyearsandkeyannouncementstodateforthecomingperiodtoillustratethefoundationuponwhichthe14thFive-YearPlan(FYP)(2021-2025)mightbuild.Thisreporttakesasystemicapproachtoinnovation,basedonafour-pillarframeworkusedtodescribesuccessfulinnovationsystems:1)resourcepush;2)knowledgemanagement;3)marketpull;and4)socio-politicalsupport.Thisapproachacknowledgesthattheinnovationjourneyiscomplexanduncertain,IEA.Allrightsreserved.TrackingCleanEnergyInnovationIntroductionFocusonChinaPAGE7involvesawiderangeofactors,andcanbeinfluencedbyexternalfactorssuchaspastpolicychoices,historyandculture,andmacroeconomics.ThereportfocusesonselectedcorecomponentsandfeaturesofChina’senergyinnovationsystem,anddrawsonasmallnumberofkeyinnovationmetrics.Theauthorsnotethatfurtherworkwouldberequiredtoprovideamorecompletepictureandcollectdataforadditionalindicatorstotrackprogress.Specifically,thisreportincludes:Snapshotsofrecenttrendsinenergypatenting,illustratingimprovementsinoutputsofChina’sinnovationsystem,andinsolarPV,atechnologyareainwhichChina’scontributionstocostreductionshavechangedthewaytheworldthinksaboutenergyinnovation.Amappingoftheinstitutionalframeworkforenergyinnovation,includingkeyactors,priorities,policiesandprogrammes,withafocusonFYPdecision-makingandenergy-specificplans.ThelatestIEAestimatesrelatingtoinputsforinnovation(e.g.spendinginresearchanddevelopment[R&D],venturecapitalinvestmentsinenergystart-ups).Anoverviewofthecountry’sapproachtoknowledgemanagementandnetworks,includinginternationalcollaboration.Insightsontheroleofmarket-orientedpoliciesinpullinginnovation.Whatdowemeanbyenergyinnovation?Thisreportisconcernedwithhowenergytechnologiesareinvented,turnedintoproductsandmodifiedthroughouttheirlives.Technologyinnovationisdefinedas“theprocessofgeneratingideasfornewproductsorproductionprocessesandguidingtheirdevelopmentallthewayfromthelabtotheirmainstreamdiffusionintothemarket”.Equipmentandprocessesthatchangehoworhowmuchenergyisconsumedareincluded,rangingfromenergysupply,transformationanddistribution,digitalisation,toend-usesectorsincludinginbuildings,industryandtransport.Therearefourmainstagesoftechnologydevelopment:prototype,demonstration,earlyadoptionandmaturity.Technologiesarenotuniforminsize,timetomarket,consumervalueortypeofowner.Eachstageandtechnologytyperequiretailoredpolicysupportasaresult.TheETPCleanEnergyTechnologyGuidetracksprogressofover400energytechnologies(e.g.stageofdevelopment,ongoingactivities).IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE8PatentsandsolarPV:CasesillustratingimprovementsinChina’senergyinnovationIntroductionThissectionintroducestwosnapshotsofrecenttrendsinoutputsofChina’senergyinnovationasbackgroundstoriesforthefollowingsections,whichwillexaminetheinnovationsystemitself.First,thissectionexaminestrendsinlow-carbonenergypatentingactivityasaproxyfornewknowledgecreatedbyChineseinventorsinfieldsrelevanttoenergy.Second,itsummarisestheuniquecasestudyofsolarPVdevelopmentinChina,whichhaschangedthewaytheworldthinksaboutenergyinnovation,withafocusoncomponentperformanceimprovementsbroughtaboutbyChineseinstitutionsandcompanies.Whilemanymoremetricsandcasescouldbeexploredtotrackprogress,thesetwosnapshotswellillustrateimprovementsinChina’scleanenergyinnovation.KeytakeawaysChinahasbecomeakeyplayerinenergypatentinginashortperiod,especiallyinafewstrategicareaswhereChineseinventorsaccountforanincreasingshareofglobalactivity,includingsolarPV,EVtechnologiesandlighting.About80%ofChinesepatentsinclimate-changemitigationtechnologiesrelatingtoenergyarealsoprotectedabroadtoday,suggestingthatqualityhasimproved.China’ssolarPVinnovationstorysuggestsaprogressiveshiftfromsheertechnologymanufacturingtoinnovation.Injusttwodecades,ChinahasbuiltasolarPVindustryleadingglobalmanufacturingandnowbreakingefficiencyrecordsinsomeinstances.IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE9IncreasingenergypatentingactivityPatentinghasbeendoublingeveryfiveyearssince2000Beforethe1990s,Chineseinventorsmostlyprotectednewknowledgewith“utilitymodels”ofpatenting,whichareeasierandcheapertofile,andhavelowernoveltyrequirementsthanpatentsofinventionbutshorterprotectionperiods.Oneofthereasonsforusingutilitymodelsisthatthesecanbeusedtoprotectminorimprovementsofexistingproductsthatdonotfulfilpatentabilityrequirement.Sincethe1990s,inventorshavebeenincreasinglyfilingpatentsofinvention,includingunderinternationalintellectualproperty(IP)regimes.In2020,1.5millionapplicationsforpatentsofinventionwerefiled,whichisapproachingthenumberofutilitymodelapplications,still2.9millioninthatyear.ForeignactorssuchasmultinationalshavealsoincreasinglyprotectedIPinChina.Thenumberofpatentgrantsinenergy-relevantindustrysegmentsinChinaincreasednearly40-foldbetween2000and2020.Theshareofresidentsamongthesefilingsincreasedfromabout45%to80%,whichranksabovetheworldaverageof60%forthesetechnologyareas.PatentgrantsinChinainselectedtechnologyareasandshareofthesefiledbyresidentinventors(2000-2020)IEA.Allrightsreserved.Source:IEAanalysisbasedonWIPOdata(Patentgrantsbytechnology,Residentandnon-residentcountbyfilingoffice).0%30%60%90%05010015020002005201020152020Patentcounts(thousands)SemiconductorsTransportThermalprocessesEnginesandturbinesEnvironmentaltechnologyChemicalengineeringMetallurgyBasicmaterialschemistryBiotechnologyElectricalmachinerySharefiledbyresidents(right)IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE10Low-carbonenergypatentinghasboomed,ledbybatteries,electricvehiclesandsolarInthelast20years,Chinahasbecomeakeyplayergloballyinenergypatentingnearlyfromscratch,assuggestedbytrendsininternationalpatenting,especiallyinafewstrategictechnologyareas.Trendsinabroadselectionoflow-carbonenergytechnologies–climate-changemitigationtechnologiesrelatingtotheenergysector–showthatthenumberofinternationalpatentsgrantedtoChineseinventorsin1990wasclosetozero.Between1990and2000,thisnumberincreasedquickly,butoverallactivityremainedlowrelativetointernationalpeers.Between2000and2012,patentingactivityincreasedmorequicklyatacumulativeannualgrowthrateofabout35%,primarilyledbybatteries,solarPVandEVtechnologies.Afteraslightdecreasebetween2012and2014,activityskyrocketedagainfrom2015onwardsandreachedlevelstwiceashighas2012alreadyin2017.In2018-2019,Chineseinventorsfiledaboutsixtimesthenumberofinternationalpatentstheyhadfiledin2008-2009forbatteriesandsolarPV,andeighttimesforEVtechnologies.Chineseinternationalenergypatentingwasalmostnon-existentbeforethe2000sandroserapidly.Between2007and2010,theshareofChineseinventionsthatwerealsoprotectedinternationallyincreasedfrom10%to75%.Theinternationalisationofpatentssuggestsanincreaseinquality,giventheconstraintsandexpensesassociatedwithfilingforprotectioninseveralnationalorregionalpatentoffices.China’srateofinternationalpatentinghasnowsurpassedthatoftheUnitedStatesandEurope,andtiesupwithJapan.Theincreaseintheshareofinternationalpatentscoincidedwithadropinoverallactivitybetween2008and2010.Whilethetotalnumberofpatentsdecreased,thenumberofpatentsthatwerefiledinternationallycontinuedtoincreasesteadilyovertheperiod,reflectingadecreaseinlower-qualitypatentingactivity.In2019,Chineseinventorsrepresentedasignificantshareoftheworld’spatentinginlighting(25%),heatingandcooling(21%),renewables(19%),andEVtechnologies(11%).Onaverage,China’sshareofglobalpatentingactivityremainslowerforclimatechangemitigationthanforalltechnologies,suggestingthereremainsroomforChineseinventorstoincreasetheirglobalpresence.Itshouldbenotedthatadropinpatentingactivityforclimate-changemitigationtechnologieswasalsoobservedgloballyoverthe2010-2015periodandisnotspecifictoChina.Meanwhile,globalactivityinlow-carbonenergytechnologypatentinghasbeensteadilygrowingsincethe2000s,withasmalldipbetween2014and2018.IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE11Internationalpatentsinselectedlow-carbonenergytechnologyareasfiledbyChineseinventors,andshareofthesepatentsthatareinternational(1990-2019)IEA.Allrightsreserved.Notes:Patentcountsinclimate-changemitigationtechnologiesrelatingtoenergy,filedinatleasttwogeographicaloffices.HVAC=heating,ventilationandairconditioning.“Otherrenewables”includestheintegrationofrenewablesinbuildings,geothermal,hydro,marine,solarthermalandhybridthermal-PVenergysources.“Heavyindustry”includestheproductionand/orprocessingofchemicals,cement,limeandmetals.“Otherlow-carbon”includestechnologiesrelatingtoairandmaritimetransport,captureordisposalofcarbondioxide,nuclearpowergenerationandsmartpowergrids.TheshareofpatentsfiledinternationallyreferstotheratioofpatentsfiledbyChineseinventorsinatleasttwopatentofficesrelativetoallpatentsfiled.Source:IEAanalysisbasedonOECDdataoninnovationinenvironment-relatedtechnologies.China’sshareofglobalpatentinginselectedlow-carbonenergytechnologyareasandforalltechnologies(1990-2019)IEA.Allrightsreserved.Notes:Patentcountsinclimate-changemitigationtechnologiesrelatingtoenergy,filedinatleasttwogeographicaloffices.Three-yearmovingaveragesareused.Source:IEAanalysisbasedonOECDdataoninnovationinenvironment-relatedtechnologies.0%25%50%75%100%01000200030004000199019952000200520102015InternationalpatentcountsOtherlow-carbonOtherrenewablesHeavyindustryBiofuelsandfuelsfromwasteWindHydrogenandfuelcellsHVACLightingEVandchargingSolarPVBatteriesSharefiledinternationally(right)0%10%20%30%199019952000200520102015ShareofglobalpatentingLightingSolarPVHVACSmartgridsBatteriesEVandchargingWindNuclearHydrogenandfuelcellsAlltechnologiesIEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE12Overthe1990-2019period,renewablesaccountedfor29%ofallpatentingactivityinthesampleathand,including17%forsolarPVand4%forwind.Chineseinventorsweremostactiveinbatterytechnologies,whichaccountedforover27%ofactivity.EVsandchargingaccountedfor13%,lighting8%,hydrogenandfuelcells5%,heatingandcooling5%,andbiofuels3%.Technologiesrelatingtoheavyindustryaccountedforabout7%,primarilyforchemicalsandmetalprocessingandproduction,whereastherewaslimitedactivityincementandlime.Overthe2017-2019period,thelastthreeyearsforwhichdataareavailable,battery,EVandsolarPVtechnologiesaggregatedtothetwo-thirdsofpatentingactivityinthesampleathand.Someareashaveseenrelativelylessactivepatentingactivityingeneral,suchasairandmaritimetransport;carboncapture,utilisationandstorage(CCUS);nuclear;andsmartpowergrids.Inthecaseofnuclear,itisacknowledgedthatindustrialconfidentialitygenerallyleadstounderreportingofnewknowledgecreatedthroughR&D,whichlimitstheuseofpatentsasagoodproxyforinnovationactivity.Infact,China’sfirsthome-grownthird-generationnuclearpowerplant–HualongOne–startedoperationsin2021,andthegovernmentplanstoexpandnuclearcapacitybasedondomesticconcepts–includingHualongTwoandsmallmodularreactors–lookingforward,whichillustratestangibletechnologicalprogressnotcapturedbypatentingtrends.China’stransformationfromasolarPVtechnologyimportertoinnovatorFromsolarPVmanufacturertoinnovatorItiscommonknowledgetodaythatChinaisaglobalmanufacturingpowerhouseforsolarPVtechnologies.Inrecentyears,ithasalsobecomeamajorsourceofPVcell-ormodule-levelinnovations,andaccountsforanincreasinglyimportantshareofglobalpatenting.ThistransitionfromhavingalmostnotechnologicalcompetencesinPVtobeingafrontierinnovatordidnothappenovernight,althoughitwasquickbyhistoricalstandards.ThestoryofsolarPVinnovationinChinastartsinthe1950swiththefirstpubliclyfundedR&Dinthefield,whichprimarilyfocusedonspaceapplications.Inthe1980s,despiteR&Dprojectsfocusingoncrystallinesiliconcells,overallmanufacturingcapacity,performanceandqualityremainedlow.Innovationeffortsreallytookoffintheearly2000s.In2002,PVcellsco-developedbyaChineseresearcheratanAustralianuniversitybeganproductioninafactoryownedbytheresearcher’scompany,Suntech,inChina.Acombinationoflowmanufacturingcosts,ambitiousscaleandcheapcapital–SuntechwasbackedbyamunicipalgovernmentinJiangsuprovince–gavethefactoryanedgeinexportmarketsjustaspublicsupportforPVdeploymentwasstartingtoexpandinEurope.IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE13Overthefollowingdecade,corporatepartnershipsandjointventureshelpedachieveeconomiesofscaleandcost-basedcompetitionforexportmarkets.OtherChinesefirmsbuiltonthismodelofattractingworld-leadingcompaniestomanufactureinChina,gainingaccesstotechnologyandglobalvaluechains.In2008,ShandongSolarTechnologylicensedtechnologyfromJohannaSolarTechnology,aGermancompany.In2012,TianjinZhonghuanSemiconductorformedajointventurewithSunpower,aUScompanythatwentontoformotherjointventureswithDongfangElectricCompanyandtwootherChinesecompanies.TradebalanceinsolarPVandLEDs,powergenerationfromsolarPVandpatentingtrendsinsolarPVandlightingtechnologies(2000-2020)IEA.Allrightsreserved.Note:LEDs=light-emittingdiodes.Source:IEAanalysisbasedonUnitedNationsComtradedataonglobaltrade(HarmonizedSystemcode854140,three-yearmovingaverages),IEAdataandstatisticsforsolarPVelectricitygeneration,andOECDdataoninnovationinenvironment-relatedtechnologies(patentcountsinclimate-changemitigationtechnologiesrelatingtosolarPVandlighting,domesticandinternationalfilings,three-yearmovingaverages).SomeChinesecompaniesalsoacquiredforeigncompetitorsandabsorbedtheirR&Dactivitiesandtransferredtechnologyandknowledge.Forexample,HanergyGroupacquiredAltaDevices,aUScompany,in2013.GiventhecommandingpositionofChinesemanufacturinginglobalmarkets,raisingcapitalforsuchpurchaseswasnotdifficult.SeveralChinesecompaniesestablishedpartnershipswithuniversitiesoverseas,suchasTrinaSolar’stie-upwiththeAustralianNationalUniversityin2011,andputinplacespecialprogrammestohireskilledlabourandexecutiveswithforeignexperience,especiallyChinesenationalsworkingabroad.Corporatepartnershipsandjointventuresbroughtaboutmanufacturingandengineeringimprovementsthroughlearning-by-doingandeconomiesofscale,pavingthewayformorenoveltechnologyinnovationlateron.Ascompetitionwithmanufacturersintherestoftheworlddiminishedoverthe2010s,itintensifiedwithinChinawiththeintroductionofpoliciestosupportdomesticdeploymentinthe12thFYP(2011-2015).Domesticmarketsupportwas-505101520200020102020Tradebalance(USDbillion)Photosensitivesemiconductors(solarPV,LEDs)SolarPVLighting0200400600800200020102020Patentcounts050100150200250300200020102020Powergeneration(TWh)IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE14implementedtoboostindustryandtakeadvantageofcheappanels,inacontextofthinmarginsformanufacturersandboom-and-bustpolicysupportabroadthattriggeredexcesscapacity.Typicalpolicysupportincludeddeploymenttargets,financialincentives,subsidiesandloans(e.g.RooftopSubsidyProgramme;GoldenSunprogramme;solarapplicationsinagriculture),feed-intariffs,creatinglocalchampions,andpromotionofforeigndirectinvestmentsinmanufacturing.Competitionformarketshare,oftenbetweencompaniesbackedbydifferentmunicipalities,helpedtodriveimpressivemanufacturinginnovations.Withoutinnovationsinsiliconprocessingandcellassembly,thelargecostreductionsachievedforsolarPVwouldnothavebeenpossibledespiteeconomiesofscale.ProgressinthisareahasbeenattributedtothefactthatChinesesolarcompaniesareorganisedinindustrialclusterswithexchangeofknowledgeandexpertise.InthelastFYPs,market-pullfactorshavebeenstrategicallycomplementedbyresource-pushsupport,whichhascontributedtostrengtheningsolarPVR&D.Forexample,R&DinvestmentsalongthesolarPVmanufacturingvaluechainincreased(e.g.indifferentcomponents,resourcesandmaterials,manufacturingequipment,recycling).Thegovernmentalsoprovidedresearchinfrastructureandestablishedkeylaboratories,setincentivestocreatecorporateR&Dlabs,launcheddemonstrationzonesforemergingconceptssuchasdistributedsolarPV,andpromotedtheexchangeofskilledlabour.Sincearound2010,ChinesecompaniesandlaboratorieshavebecomemoreactiveindevelopingnewconceptsandimprovingperformanceofsolarPVtechnologiesatthecomponentlevel.ThesedevelopmentssuggestthatChineseinnovatorsareplayingamoreimportantroleinglobaleffortsbeyondthatofsheermanufacturing.ThegapbetweentheperformanceofChinesefirmsandoverseascompetitorshasshrunkrapidly.However,manycutting-edgemoduleswithhighefficienciesdevelopedrecentlystillcomefromcountrieswithlongersolarR&Dhistory(e.g.Australia,Germany,JapanandtheUnitedStates).ChinesepolicymakershaveindicatedanambitiontoremaintheleadingmanufacturerofsolarPVandtheleadingdeveloperofnewPVtechnologiesinthe14thFYP(2021-2025)periodandbeyond.Chinesegovernmentlaboratoriesanduniversitieshavealreadyshiftedtheirfocustonext-generationPVdesigns,withcorporatelabsincreasinglymovinginthesamedirection.IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE15SelectionofsolarPVtechnologiesdevelopedinChinaoracquiredbyChinesegroupsfromforeignR&DcentresandcompaniesInstitutionCellandmodulefamily,typeandefficiencyAdvancedSolarPowerHangzhouInc.Foundedin2008inHangzhouChalcogenidecadmium-telluridemodules•2010:12.5%(eight-cellminimodule),aboveANTECSolar’s10.6%recordfrom1995forminimodules(Germany)andBPSolarex’s10.9%recordfrom2000forlargermodules(UnitedKingdom)•Currentglobalrecord:19%byFirstSolar(UnitedStates)since2019forlargermodulesAltaDevicesFoundedin2007inCaliforniaAcquiredin2013byHanergyGroup(Beijing)R&DoperationscontinuedintheUnitedStatesuntil2019Gallium-arsenidesingle-junctionthinfilmcrystalcells•2010:27.6%,aboveRadboudUniversity’s26.1%recordfrom2008(Netherlands)•2011:28.1%,then28.3%•2012:28.8%•2018:28.9%,then29.1%,currentglobalrecordTwo-junctionnon-concentratorcells•2013:30.8%(gallium-arsenide),aboveJapanEnergy’s30.3%recordfrom1996•2016:31.6%(gallium-indium-phosphide/gallium-arsenide),abovetheNationalRenewableEnergyLaboratory’s31.1%recordfrom2013(NREL,UnitedStates)•Currentglobalrecord:32.9%byNRELsince2020Gallium-arsenideIII-Vsingle-junctionmodules•2011:21.1%,then23.5%,aboveECNPetten’s7.1%recordfrom2008forasub-module(Netherlands)•2012:24.1%•2016:24.8%•2017:25.1%,currentglobalrecordChina’sAcademyofSciencesandChineseuniversitiesEmergingPVorganiccells•2018:12.3%(thinfilm)bytheStateKeyLaboratoryofPolymerPhysicsandChemistryoftheChineseAcademyofScience•2018:15.6%(thinfilm)bythecollaborationbetweenSouthChinaUniversityandCentralSouthUniversity•2019:17.35%(thinfilm)byShanghaiJiaoTongUniversity,incollaborationwithUniversityofMassachusetts(UnitedStates)•2020:18.2%(cell),incollaborationwithBeihanUniversity(China),thecurrentglobalrecordEmergingPVorganictandemcells•2019:13.2%byShanghaiJiaoTongUniversity•2020:13.5%bytheInstituteofChemistryatChina’sAcademyofSciences,thecurrentglobalrecordEmergingPVperovskitemodules•2016:12.1%(first-everten-cellminimodule),incollaborationwiththeNationalInstituteforMaterialsScience(Japan)•Currentglobalrecord:17.9%byPanasonic(Japan)since2020JinkoSolarFoundedin2006inShanghaiMulticrystallinesiliconcells•2020:24.4%,currentglobalrecordSinglecrystalsiliconcells•2021:25.4%(n-type),currentglobalrecordIEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE16InstitutionCellandmodulefamily,typeandefficiencyLONGiFoundedin2000inXi’an(Shaanxi)Singlecrystalsiliconcells•2019:24.06%(p-type)•2021:25.09%,then25.21%(n-type),25.19%(p-type)•2021:25.26%,25.82%andthen26.3%(heterojunction),currentglobalrecordMiaSoléHi-TechCorpFoundedin2004inCaliforniaAcquiredin2012byHanergyGroup(Beijing)Copper-indium-gallium-selenidecells•2019:20.56%(flexible)•2021:26.5%(perovskitetandem),incollaborationwiththeEuropeanSollianceSolarResearchChalcogenidecopper-indium-gallium-selenidemodules•2010:13.8%,then15.7%,aboveShowaShell’s13.5%recordfrom2002(Japan)•2019:17.4%(thinfilm),second-highestglobally•2019:17.44%,then18.64%(flexiblemodule)•Currentglobalrecord:19.2%bySolarFrontier(Japan)since2017,and19.6%forsub-modulesbyAvancis(Germany)since2021MicroquantaSemiconductorFoundedin2015inHangzhouEmergingPVperovskitemodules•2017:16.0%(six-cell),aboveShanghaiJiaoTongUniversity’s12.1%recordfrom2016(China)•2018:17.25%(seven-cell),breakingitsownrecord•Currentglobalrecord:17.9%byPanasonic(Japan)since2020SolarmerEnergyInc.Foundedin2006inCaliforniaSolarmerMaterialsInc.Foundedin2009inBeijingEmergingPVorganiccells•2009:6.8%,7.6%andthen7.9%,aboveKonarka’s6.4%recordfrom2008(UnitedStates)•2010:8.1%,breakingitsownrecord(beatenbyKonarkaat8.3%)•Currentglobalrecord:18.2%byShanghaiJiaotongUniversity(China)since2020EmergingPVorganicmodules•2009:3.5%(sub-module),abovePlextronics’2.1%recordfrom2009(UnitedStates)•Currentglobalrecord:11.7%byZAEBayern(Germany)in2019TrinaSolarFoundedin1997inChangzhouSinglecrystalsiliconcell(non-centrator)•2019:23.2%(n-typesinglecrystal),belowtheInstituteforSolarEnergyResearchHamelin’srecordfrom2018at26.1%(Germany),thecurrentglobalrecordMulticrystallinesiliconcells•2014:20.8%(p-type),aboveFraunhoferInstituteforSolarEnergySystems’20.3%recordfrom2004(Germany)•2015:21.25%,breakingitsownrecord•2020:23.2%(n-type),aboveCanadianSolar’s22.8%recordfrom2019(Canada)•Currentglobalrecord:24.4%byJinkoSolar(China)since2020Multicrystallinesilicon120-celllargemodules•2015:19.2%,aboveHanwhaQ-Cells’18.5%recordfrom2012(Germany-Korea)•2016:19.9%,aboveHanwhaQ-Cells’19.5%from2015•Currentglobalrecord:20.4%byHanwhaQ-Cellssince2019,firstnewhighsinceTrinaSolar’sperformancein2016Primarysources:ChampionPhotovoltaicModuleEfficiencyChartandBestResearch-CellEfficiencyChart.Secondarysources:Solliance,MiaSoléhit26.5%efficiencyontandemCIGS/perovskitesolarcell;Longiachieves25.21%efficiencyforTOPConsolarcell;Longiimprovesefficiencyofitsheterojunctioncellfrom25.82to26.30%injustoneweek;JinkoSolarsetsnewrecordforn-typesolarcellefficiency;Longiclaims25.19%efficiencyforp-typeTOPConsolarcell;Miasoléhits20.56%efficiencywithflexibleCIGStechnology;MiaSolébreaksitsownrecordforflexibleCIGS;SolarmerbreaksorganicsolarPVcellconversionefficiencyrecord.IEA.Allrightsreserved.TrackingCleanEnergyInnovationPatentsandsolarPV:CasesillustratingimprovementsFocusonChinainChina’senergyinnovationPAGE17LearningsfromChina’ssolarPVinnovationstoryThedevelopmentofChina’ssolarPVindustryisauniquecasestudyandmaynotbeeasilyreplicated,butitprovidesvaluableinnovationpolicylearnings.TheimpactthatChinahashadoncostreductionsandnowperformanceimprovementsinsolarPVhaschangedglobalconversationsaroundenergyinnovation,andlaidthefoundationforwhatishappeninginbatteriesandEVs.Insummary,thetransitionfromatechnologyimportertoaninnovatorwastheresultofauniqueapproachtojointventuresandcorporatepartnerships,alargedomesticmarket,market-pullpolicies,resource-pushsupport,andstronginter-companytechnology-basedcompetition.China’ssolarstoryillustratestheneedtoconsiderinnovationfromasystemicperspective.Market-creationinterventionsalonewerenotenoughtostimulateinnovation.Overall,Chinaaspiredtocoverallfourpillarsofsuccessfulinnovationsystems,althoughthiswasnotthecasefromthebeginningbutratherprogressiveandparticularlyinthe13thFYP:sustainedflowsofresourcesforsolarenergyinnovationactivities,includingincreasingfundingforR&DanddevelopinghumancapitalproactiveknowledgemanagementschemesincludingtoshareinformationandacquireIPfromabroad,andtobuilddomesticnetworksalongsolarsupplychainsstrongindustrialandmarket-pullpoliciestobuildintegratedlocalchampions,createdomesticmarketsandboostexportseffortstopromotesocio-politicalsupportforsolarPVtechnologies,suchasthroughensuringbuy-infromindustry,subnationalgovernmentsandcitizenswithproducerandconsumerincentives.Thenextsectionsofthisreportexplorefurthersomeofthesecorecomponents,startingwithChina’sinstitutionallandscape,whichhasenabledtheprogressivestrengtheningofinnovationandchangedovertimethankstopolicylearningsincludingfromthecaseofsolarPV.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE18China’sinstitutionallandscapeforenergyinnovationIntroductionThissectionmapsChina’slandscapeforenergyinnovation,includingkeystakeholdersinvolvedfromprioritysettingtoimplementationofR&Danddemonstrationactivities.Itpresentsthecountry’skeydecision-makingprocesses,notablythroughFYPsandassociatedactionplansandguidelines,andtrackstheirfocusontechnologyinnovationinthelastdecades.Itincludespreliminaryinsightsfromthe14thFYP(2021-2025)withafocusonenergypriorities,basedonrecentannouncementsandexpectationsrelatingtocarbonneutralitytargets.KeytakeawaysTheFYPssetthedirectionforChina’senergyinnovationactivities.Inthelastdecade,theyhaveincreasinglyfocusedontechnologyinnovation,includingintheenergysector.GeneralguidelinessetbycentralgovernmentagenciesaretranslatedintoactionplansandR&Dprogrammes–manyunderthesupervisionoftheMinistryofScienceandTechnology.Expectationsforenergyinnovationfromthe14thFYP(2021-2025)pointtoprioritytechnologyareasincludingnewenergyvehiclesandassociatedcomponentsincludingbatteries,hydrogen,bioenergy,energystorageandCCUS.ThelandscapeofenergyinnovationinChinaiscomplex,withmanyactorsandinstitutionsinvolvedinprioritysetting,decision-makingandR&Dexecution,includingatthesubnationallevelandinstate-ownedenterprises.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE19Whoarethekeyactorsshapinginnovation?TheecosystemofstakeholdersshapingChina’senergyinnovationundertheleadershipoftheStateCounciliscomplex.Sinceitsdissolutionin1993,thereisnounifiedMinistryofEnergyinChina.Energymanagementisdecentralisedandreliesoninter-ministerialcollaborationandnegotiation.In2008,ChinaestablishedtheNationalEnergyAdministration(NEA)asaco-ordinatorofenergypolicymaking,andin2010,theNationalEnergyCommission(NEC)asanumbrellamechanismforhigh-levelenergydecision-making.TheNECgathersrepresentativesfromallrelevantministriesandpublicbodies,suchastheNEAandtheNationalDevelopmentandReformCommission(NDRC),thecountry’stopeconomicplannerandpolicymaker.SeveralgovernmentbodiesandagencieshaveanofficialroleinChina’senergyinnovationdecision-makingprocess.Intermsofprioritysetting,theMinistryofScienceandTechnology(MOST)playsanimportantroleandcollaborateswiththeNECanditsmembers(seetablebelow),basedonhigh-levelpolicyguidelinessetbytheStateCouncil.In2018,acabinetreshufflecreatednewbodies,suchastheMinistryofEcologicalEnvironment(MEE),andadjustedtheresponsibilitiesofothers.Forexample,MOSTincorporatedtheAdministrationofForeignExpertsAffairsandstartedoverseeingtheNationalNaturalScienceFoundationofChina,whichwaspreviouslyindependent.Intermsoffundingforenergyinnovation,MOSToverseesthecountry’smajorR&Dprojects,andseveralotherministries,publicbodiesandstate-ownedenterprises(SOEs)aremobilisedaswell(e.g.MinistryofEducationwithuniversitiesandaffiliatedresearchinstitutes).Subnationalgovernmentsandprovincesarealsosolicited,particularlyforlocalpolicysupportandimplementation.Afterhigh-levelprioritiesareset,abroadrangeofresearchinstitutions,universitiesandSOEsacrossthecountryisinvolvedinimplementationthroughdedicatedR&Danddemonstrationprogrammes.ThemembersoftheNECareinchargeofco-ordinating,auditingandevaluatingtheseactivitiesinordertofeedbackintosubsequentFYPpriorities.Overall,energyinnovationresponsibilitiesaresharedamongabroadrangeofactorsreportingtotheStateCouncil(e.g.high-levelstrategy;R&Dprojectdesign,funding,managementandevaluation;supportfordiffusionofnewtechnologies).Effectivecollaborationamongtheseactorsiskeytoensureenergypolicyandinnovationpolicysupporteachother.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE20AnincreasingroleforChina’sSOEsinenergyinnovationfollowingcarbonneutralitypledgesandthe14thFYPChina’scarbonneutralitypledgemandatesSOEstobeattheforefrontofthecountry’slow-carbontransition.Bymid-2021,about30SOEshadinitiateddiscussionsovercarbonneutralityplansandstrategies,includingSinochem,ChinaNationalOffshoreOilCorporation(CNOOC)andBaowuSteel.Althoughfewhaveannouncedspecifictimelinestodate,mosthaveannouncedchangestotheirstrategytodeploynewtechnologiesanddevotemoreresourcestoR&Dactivities.Furthermore,theState-ownedAssetsSupervisionandAdministrationCommission(SASAC),theSOEregulator,issueddraftrulestosuperviseandadministerSOEenergyconservationandenvironmentalprotectionpractices.Specifically,itinstructedSOEstobuildtargetedactionplans,increaserelevantbudgets,andcarryoutR&Dinandacceleratedeploymentoflow-carbontechnologies.Itisexpectedthatunderthe14thFYP(2021-2025),asinpreviouscycles,SOEswillbetaskedwithspecificprojectssuchasdevelopingkeytechnologiesthatarestillatthepre-commercialstageinChina,suchasinCCUS.InJuly2021,SinopecclaimedtostarttheconstructionofChina’sfirstmegatonneCCUSprojecttocaptureCO2attheQiluPetrochemicalplants,andtransportandstoreitinover70wellsintheShenglioilfields.ThisprojectisoneofseveralCCUSprojectsplannedbyChineseSOEsinthe14thFYPperiod.InNovember2021,SinopecalsoannouncedthelaunchoftheXinjiangKucheGreenHydrogenDemonstrationProject,withtotalinvestmentofCNY3billion(Yuanrenminbi,aboutUSD450million,marketexchangeratebasis).Theprojectinvolvesbuilding300MWofsolarPVpoweringelectrolyserstoproduceanannual20000tonnesofhydrogenstartingmid-2023.ThesupplywillfuelTaheRefinerytoreplaceitsexistingfossilfuel-producedhydrogen,reducingCO2emissionsbyabout500ktannually.InDecember2021,SinopecandChinaNationalPetroleumCorporation(CNPC)alsosignedanagreementfordeeperco-operationinnewenergyfields.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE21PublicinstitutionallandscapeofenergyinnovationinChinaInstitutionPrioritysettingandstrategicplanningFundingresearchandoverseeingprogrammeexecutionResearchexecutionorcontributiontomarket-pullleversNationalEnergyCommission(NEC)•TheNECisChina’sinter-ministerialmechanismforhigh-levelenergydecision-makingwithintheStateCouncil.Itformulatesnationalenergydevelopmentstrategiesbygatheringallkeyactors.•TheNECischairedbytheprimeminister,witharesponsibilitytodraftthenationalenergydevelopmentstrategy,reviewmajorissuesinenergysecurityandenergydevelopment,andco-ordinatetasksofdomesticenergydevelopmentandinternationalcollaboration.•Asof2020,NECincluded23members,includingtheNDRC,NEA,MOST,MinistryofFinance(MoF),MinistryofIndustryandInformationTechnology(MIIT),MEE,andMinistryofForeignAffairs.NationalDevelopmentandReformCommission(NDRC)•NDRCisChina’stopeconomicplannerandpolicymaker.ItplaysakeyroleindraftingtheFYPsandrelatedpolicies,whicharethebasisforthecountry’senergyinnovationstrategy.•NDRCformulateshigh-levelpoliciesandsupportmechanismsfornationalresearchinfrastructure,aswellasforthedemonstrationandcommercialisationoftechnologiesinstrategicsectors.•NDRCmanagesfourNationalComprehensiveScientificResearchCenters,eachcarryingoutscientificresearchorprovidingtestandanalysisservicestoresearchers,inBeijing(e.g.cleanenergymaterialsforenergystorage,solarandlighting),Shanghai(e.g.thermalturbines),Hefei(e.g.renewables,smartgrids,coal,nuclearfusion)andShenzhen.•NDRCmanagestheState-accreditedEnterpriseTechnologyCentresprogramme,whichcertifiesR&DcentresofmajorSOEsandprivateenterprisesandenablesthemtoreceivelocalgovernmentsupport.•NDRCoverseestheZhangjiakouRenewableEnergyPilotZone.TheprogrammefeaturesR&Danddemonstrationinenergytechnologyareasincludingwindpower,transmissionandhydrogen.•NDRC’sDepartmentofResourcesConservationandEnvironmentalProtectionoverseesthedevelopmentofgreentechnologiesandacirculareconomy,andco-leadstheInter-agencyMechanismonGreenTechnologyDevelopmentwithMOST.•NDRC’sEnergyResearchInstituteprimarilyconductspolicyresearch,andtheNationalEnergyConservationCentremanagesenergystandardsandlabelsforvariousproducts.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE22InstitutionPrioritysettingandstrategicplanningFundingresearchandoverseeingprogrammeexecutionResearchexecutionorcontributiontomarket-pullleversNationalEnergyAdministration(NEA)•NEAisChina’smainenergypolicymaker.ItworkswithNDRCtotranslatetheFYPintoenergy-specificplansandpolicies.ItrunstheofficeoftheNECandplaysacrucialroleininter-ministerialcollaborationintheenergysector.•NEAoverseesnuclearpowertechnologydevelopment,developsrelatedsupportpoliciesandstandards,andco-ordinatesdeploymentofnucleartechnologiesundertheleadershipoftheStateCouncil.•NEAoverseestheNationalEnergyR&DInnovationPlatform,whichencompassescentresandlaboratoriesaffiliatedwithuniversities,institutesorSOEsthatcarryoutinnovationinabroadrangeofenergytechnologyareas(e.g.renewables,nuclear,transmissionandsmartgrids,storage,hydrogen,transport,fossilfuels).WhileNEAdoesnotdirectlyprovidefunding,itcancertifyinstitutionstofacilitateaccesstofundingfromotherstatesources,andtakespartinmonitoringandevaluation.•NEAsupportsdemonstrationprojectsinenergystorage(e.g.providespreferentialaccesstothegrid)withtheviewtosettechnologicalstandardsinthefuture.•NEAsetsstandardsinallenergytechnologyareas(e.g.fossilfuels,renewables,nuclearpower,powergridandstorage)throughdedicatedcommitteesgatheringgovernment,industryandsectoralexperts.ChineseAcademyofSciences,ChineseAcademyofEngineering(CAS,CAE)•CASandCAEareChina’stopscienceandengineeringacademiesattheministeriallevelandreportingdirectlytotheStateCouncil.•CAEperformsanadvisoryroleforpolicymakersontechnologydevelopment.Itsmemberscountexpertsfromvarioussectorsincludingtransport,chemicals,theenvironmentandenergy.ItproducessectoraltechnologyreportsandroadmapsforpublicR&Dactivities.•CASisChina’smostprominentnaturalscienceresearchinstitution.Itdirectsover100instituteswithanannualbudgetofCNY90billion(USD13.7billion).•Severalaffiliatedinstitutescoverenergy:theGuangzhouInstituteofEnergyConversion(e.g.bioenergy,solar,marineenergy,fossilfuels);theInstituteofPhysics–KeyLaboratoryforRenewableEnergy(e.g.storage,solar);theBeijingInstituteofNanoenergyandNanosystems(e.g.nanopowerandhigh-voltagesystems);andtheInstituteofEngineeringandThermalPhysics(e.g.windandthermalturbines,distributedenergy,renewables,storage).IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE23InstitutionPrioritysettingandstrategicplanningFundingresearchandoverseeingprogrammeexecutionResearchexecutionorcontributiontomarket-pullleversMinistryofScienceandTechnology(MOST)•MOSTisthetopplannerandpolicymakerforscienceandtechnology(S&T).ItformulatesthenationalS&Tstrategiesandplans,includingtheS&TFYPandtheMid-andLong-termS&TDevelopmentPlanevery15years,thenextonecoveringthe2021-2035period.•MOSTleadstheNationalS&TMajorProjects(e.g.innuclear,semiconductors,drillingequipment)andtheNationalKeyR&DProjects(e.g.incoal,renewables,hydrogen,nuclear,low-carbontransport,materials,smartgrids).•MOSTmanagestheNationalNaturalScienceFoundationofChina,amajorfundingsourceofChina’sscientificresearchwithanannualbudgetofoverCNY30billion(USD4.5billion).In2019,thefundprovidedgrantstoover18000researchprojects,includinginenergytechnologyareassuchassolarpowerandhydrogenelectrolysis.•MOSTrunstheNationalGuidingFundfortheConversionofScientificandTechnologicalAchievements,whichmobilisespublicandprivatefundingforR&D,demonstrationandcommercialisationofemergingtechnologies.By2019,ithadnotablysetup20venturecapitalfundswithotherco-investors,severalofwhichlistlow-carbonenergyandtransporttechnologiesintheirinvestmentpriorities.•MOSToverseesresourceallocationforR&D,demonstrationandS&Tprizes.ItsupervisesprojectevaluationandthecertificationofNationalScientificLaboratories.MinistryofFinance(MoF)•MoFoverseesannualbudgetsforS&TandsetsmanagementrulesforpublicS&Tspendings.•MoFprovidesgeneraltaxcreditsforR&DexpensestoencourageR&Dactivities,andspecificsubsidiestohigh-techsectors.•MoFworkswithrelevantagenciestosetsubsidypoliciesindemonstrationanddeploymentofnewenergytechnologies,includingrenewablesandlow-carbontransport.Itoverseesthelatestresearchandpilotprogrammesforfuelcellvehicles.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE24InstitutionPrioritysettingandstrategicplanningFundingresearchandoverseeingprogrammeexecutionResearchexecutionorcontributiontomarket-pullleversMinistryofIndustryandInformationTechnology(MIIT)•MIITistheplannerandregulatorofChina'swide-rangingindustryandinformationtechnologysectors.Itsportfolioincludesautomobiles,civilaircraft,shipbuildingandtraditionalindustries.•MIIT’sStateAdministrationofScience,TechnologyandIndustryforNationalDefenceoverseesmilitaryanddual-usetechnologiessuchascivilnucleartechnology.•In2021,itpublishedthe14thFYPIndustrialGreenDevelopmentPlan,coveringmostindustrialsectors.•MIITdirectlymanagesandprovidesfundingforseventop-qualityengineeringuniversities.•MIITdesignsstandardsandindustrialpolicyforenergy-savingtechnologiesandgreenmanufacturing,andisresponsibleforthepromotionanddeploymentofgreentechnologyintraditionalindustriessuchassteelmaking.•Intheautomobilesector,MIITformulatesdevelopmentplansandtechnicalstandardsforlow-carbonvehicles,andmanageslicencesformanufacturersandnewmodels.People’sBankofChina–andotherfinancialregulators•China’sfinancialregulatorscansetspecificpoliciesorregulationsthatsupportR&Dactivities,suchasbankfinancingforinnovativefirmsandstart-ups.•TheChinaBankingandInsuranceRegulatoryCommissionsharestheresponsibilityofmanagingandregulatingventurecapital(VC)fundswithNDRC.•BanksmaydirectlysupportmajorpublicR&Dprogrammes,suchasthroughthepartnershipbetweenMOSTandtheIndustrialandCommercialBankofChinatoimprovethecountry’stechnologicalself-reliance.MinistryofEcologyandEnvironment(MEE)•MEEoverseesenvironmentaltechnology,includingitsstandardanddemonstrationprojects.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE25InstitutionPrioritysettingandstrategicplanningFundingresearchandoverseeingprogrammeexecutionResearchexecutionorcontributiontomarket-pullleversMinistryofHousingandUrban-RuralDevelopment(MOHURD)•MOHURDtakestheleadforsectoralFYPsrelatingtobuildingsenergyefficiency.Itdesignsstandards,labelsandpoliciesforgreenbuildings,materialsandotherrelatedtechnologies,andcollaborationswithNDRCandotherministriesfordemonstrationanddeploymentprojectsaswellascertification.•Throughmarket-orientedprogrammestostimulatedeployment(e.g.theRooftopSubsidyProgrammeforsolarPV),MOHURDcontributestoChina’smarketcreationpoliciesforenergytechnologiesandcanbeanenablerforemergingtechnologies.MinistryofEducation–andaffiliatedpublicuniversities(MoE)•MoEmanages75publicuniversitiesincludingTsinghua,PekingandShanghaiJiaotongUniversity.WhileuniversitiesaregivensomeautonomyinsettingR&Dbudgets,MoE’sDepartmentofS&Tauditsinnovationfundingstreamsandco-ordinatesresearchactivities.•In2019,thepublicuniversitiesthatMoEoverseesspentoverCNY50billion(overUSD7.25billion)ofR&Dfunding,accountingformorethanhalfofthetotalR&Dbudgetsofthenearly2000universitiesacrossthecountry.Sources:IEAanalysisbasedonexchangeswithMOST.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE26HowdoesChinasetinnovationpriorities?High-levelstrategyanddecision-makingisthroughFYPsChina’soverarchingprioritiesareformulatedandupdatedovertimeinthesuccessiveFYPs.TheStateCouncilsetsanoverarchingvisionforthecountry’seconomicandsocialdevelopmentinageneralFYPcoveringallsectorsoftheeconomy.Afterwards,severalministriescollaborate–supportedbybodiessuchastheNECtoco-ordinate–toformulatesector-specificFYPs,setcommonpriorities,alignobjectives,andavoidduplicationoromission.Thethreecorehigh-levelstepsrelevanttoenergyinnovationdecision-makingarelistedbelow.High-levelstrategyanddecision-makingprocessrelevanttoenergyinnovationStepDescription1.Visionforthecountry•TheStateCouncilfirstdevelopstheFYPforNationalEconomicandSocialDevelopment,anoverarchingplanincludinghigh-levelprioritiesforthecountryacrossallsectorsoftheeconomy.InMarch2021,forexample,itissuedthe14thFYP(orFourteenthFive-YearPlanfortheNationalEconomicandSocialDevelopmentandOutlineoftheLong-termGoalsfor2035).•ThegeneralFYPmayincludespecificpointsrelatedtotheenergysectorandtechnologyinnovationwhentheseareconsideredstrategicdriversforeconomicandsocialdevelopment.EnergytechnologyinnovationhasbeenincreasinglypresentinthisoverarchingFYPinthelasttwodecades.2.High-levelstrategyforenergy•TheNDRCandNEAdevelopaFYPforEnergyDevelopment,theblueprinttodelivertheenergyobjectivesofthegeneralFYP.ThisFYPcoversthewholeenergysystemandisbasedonguidingdocumentssuchastheEnergyDevelopmentintheNewErawhitepaper(December2020).•Theenergy-specificFYPincludesguidelinesrelatedtoenergytechnologyinnovationanddevelopmentofpriorityemergingtechnologies.Keyperformanceindicatorsarealsoincludedtotrackprogresswiththerunningyearselectedasabaselineandfive-yeartargets(e.g.energyproductionorconsumption,energysecurity,energyefficiency,environmentalprotection).3.High-levelstrategyforscienceandtechnology•InparalleltotheFYPforEnergyDevelopment,MOSTdevelopsaFYPonScience,TechnologyandInnovationtodelivertheobjectivesofthegeneralFYPandoftheseveralsectoralFYPsincludingtheFYPforEnergyDevelopment.•ThisFYPincludes(butisnotlimitedto)aspectsrelatedtotheenergysector,suchasprioritiesandobjectivesfornewenergytechnologies,materialsandvehicles.Inthecaseofthe14thFYP,itwillbecomplementedbyaCarbonPeakandCarbonNeutralTechnologicalInnovationActionPlan.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE27ToformulateFYPs,ChinesedecisionmakerscapitaliseonlearningsfrompreviousFYPsandcollectinformationfromarangeofexperts,officials,academicsandsubnationallevelsofgovernment.AbouthalfwaythroughtheFYP,amid-termevaluationhelpsupdateprioritiesandpreparethefollowingplans.Forexample,theelaborationofthe14thFYP(2021-2025)startedin2019witharesearchprophaseaimingtotakestockofachievementsofthe13thFYP,identifymajoroutstandingissuesandpossiblefutureprioritiesforChina,andformulateguidingrecommendations.Sincemid-2020,thecorethemesofthe14thFYPhavebeenfurtherfleshedout,debatedandrefinedthroughseveralroundsofconsultation,beforebeingapprovedbytheNationalPeople’sCongressinMarch2021.Thegovernmentaimstopublishsectoralplansin2021-2022,aswellasgoal-specificorthematicstrategiessuchastheCarbonPeakActionPlanby2030.Generalguidelinesandexpectationsforinnovationinthe14thFYP(2021-2025)arealreadyinplaceInnovationisexpectedtobecoretoChina’seconomicandsocialdevelopmentstrategyunderthe14thFYPasfirstintroducedbyPremierLiKeqiang,andisfeaturedinthefirstchapterofitsguidingpolicydocument(March2021).InMay2021,PresidentXiJinpingsharedavisionforChinatobecome“thetopinnovation-orientedcountryby2035”and“theworld’smajorsciencecentreandahighlandofinnovation”,withtheviewtoachieveahighleveloftechnologicalself-relianceanddriveinnovation-ledgrowth.Beyondeconomicdevelopment,innovationshouldhelptackleenvironmentalchallengesandbuildan“ecologicalcivilisation”.InFebruary2021,MinisterWangZhigang(MOST)saidinnovationwouldsupport“achievingthegoalofcarbonpeakandcarbonneutrality”,environmentalprotectionandthe“responsetoclimatechange”.InAugust,NEADirectorZhangJianhuacalledforastrengtheningoflow-carbontechnologyinnovation.InOctober,theStateCouncilissuedtheCarbonPeakActionPlanby2030andaccompanyingworkingguidancetoachievecarbonneutrality.Accelerating“greenandlow-carbontechnologicalinnovation”ranksamongtheplan’s“Top10CarbonPeakingActions”.TheCAS,CAE,andAssociationforScienceandTechnologyhaveallstressedtheimportanceofS&TinnovationtoachieveclimateambitionsandarejoiningforcestostrengthenChina’stechnologyleadership.In2019,MOSTandtheNDRChadpublishedguidelinestobuilda“market-orientedgreentechnologyinnovationsystem”,notablytostrengthenenterpriseinnovationandestablishan“inter-ministerialcoordinationmechanismforgreentechnologyinnovation”.Thesewillcontinuetoinformpolicyinthenextperiod.Toaccelerateinnovation,Chinesedecisionmakershaveidentifiedareasforpossibleimprovementinthecomingyears,including:Improvingoriginalandbreakthroughinnovationcapability.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE28Allocatingbudgetsandresourcestostrategicandemergingareas.Furtherinvolvingenterprisesintechnologyinnovationandmajornationalprojects.ImprovingtheeffectivenessofR&Dinstitutionsandinput-to-outputefficiency.ModernisingS&Tgovernancestructures.Modernisingcentralfundsmanagement,notablyfollowingwarningsbyCASoffundinggaps,andreviewingtheabilitytoraiseexternalfunds.Strengtheningevaluationmechanisms.TheserecentpolicyannouncementsareinlinewiththelastfewFYPs,whichalsodefinedscienceandtechnologyasdriversofChina’smodernisationtowardsahigh-techinnovationeconomy,andwithreferencetodeployingnewenergytechnologies.Morethaninpreviouscycles,however,the14thFYPputsemphasisonChina’stechnologicalself-reliance,notablytomitigateexposureofChinesefirmstoforeignequipment.Proposalsintheinnovationsectionsofthe14thFYPorincomplementaryannouncementsinclude:IncreasingallpublicR&Dspendingbyover7%everyyearoverthe2021-2025period,whichisintheballparkofaverageGDPgrowthratesinrecentyearsandslightlyabovetheindicative6%GDPgrowthtargetfor2021.ThiswouldbringChina’spublicR&DspendingtoaboutUSD580billionin2025,surpassingbudgetsintheUnitedStates(2018)andEurope(2019).Basicresearchhasalsoreceivedparticularemphasis,withatargettoreachover8%oftotalR&D.In2021,theMinistryofFinancecancelledimporttaxesuntil2025onS&TequipmentpurchasedforR&DorteachingandthatcannotbeproducedinChina,inanefforttofreeupbudgetsforresearchandacademicinstitutes.Concentratingresourcesonstrategicandemergingenergyareas,strengtheningR&Danddemonstrationindisruptivetechnologydevelopment,withlong-termbudgets–includingCCUS,hydrogen,industrialdecarbonisation,digitalandsmartenergy,andadvancedbiofuelsfortransport.Grantingmoreautonomytoresearchinstitutionsandpersonnel,andpromotingopencompetitionmechanismsbybroadeningaccesstopubliclyfundedR&Dprogrammes,includingforyoungerandmorediversescientists,suchasthroughthenew“bountysystem”and“disruptivetechnologyinnovationcompetitions”.Settingupnational,regionalandinternationalinnovationcentres,andplatformsforthejointparticipationofresearchinstitutes,enterprisesanduniversities.InApril2021,forexample,theprovinceofSichuanannouncedestablishingthecountry’sfirstcarbon-neutralinnovationcentre,focusingoncarbonemissionsreductionandzero-emissionandcarbon-negativetechnologies.Thecentreisexpectedtocarryoutbasicandappliedresearchprojects,developanindustrialtechnologydevelopmentplatformandexport-orientedindustrialparks,implementtechnologyupgradingprogrammesfortraditionalindustriesintheprovince,andprovidesupporttoinnovationnetworksandinformationsharingandlibraryresources.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE29Otherexamplesincludeastrategicco-operationpartnershipbetweenMOST’sAdministrativeCentreforChina’sAgenda21(ACCA21)andTsinghuaUniversity’sSchoolofEnvironmenttostrengthenresearchincarbonneutrality,climatechangeandothersustainabledevelopmentareas.EncouragingenterprisestoincreaseR&Dspendingandstrengthenlinkagesbetweeninnovationandindustrialchainstocaptureashareofgrowingcleanenergysupplychains.Thegovernmentmaycontinueusingtaxincentivesorothernon-traditionalfiscalpolicytoolssuchas“innovationpoints”systemsthatrewardinnovativefirmslocatedinofficialNationalHigh-TechZoneswithfinancing.Thegovernmentalsoplanstodevolveleadershiptoenterprisesofover55%ofmajorS&TprojectsandnationalkeyR&Dprogrammessupportinggreentechnologies.Proceedingwithmajorinstitutionalreformstocutredtape,streamlineadministrativeprocesses,andimproveevaluationmechanismsfortask-andresults-orientedS&Tprojects.EnhancingprotectionunderIPregimes(seenextsections).PromotinginternationalcollaborationwithChina-initiatedS&Tplansandprojects,andestablishingaChina-basedinternationalS&Torganisation.AcceleratingthedevelopmentofChina’sinnovationculture.Theenergytechnologyareasoffocusinthe14thFYParebroadinscope,butsignalsomenewdirectionsInnovationhasbecomemorecentraltoChineseenergypolicydiscussionsfollowingtheclimatepledgesofpeakingcarbonemissionsby2030andachievingcarbonneutralityby2060.FromChina’sperspective,thecleanenergytransitionpresentsopportunitiestoseekgloballeadership,learningfromtheexperienceswithsolarPVand,morerecently,EVs.Theobjectiveslaidoutinthe14thFYPandaccompanyingdocumentsdeterminewhichenergytechnologieswillreceivemostfocusoverthefive-yearperiodandwhichR&Dprogrammesanddemonstrationprojectscouldstart.Anumberofofficialpolicydocuments–alreadypublishedorannounced–provideindicationsofChina’sprioritiesforenergytechnologydevelopmentandinnovation.Theseplansinclude,inthechronologicalorderofpublication:NEA’snoticeonAdministrativeMeasuresfortheNationalEnergyR&DandInnovationPlatform(September2020),whicharebroadinscopeandincludedetailsrelatingtoR&Doperations,monitoringandevaluation.TheStateCouncil’sEnergyDevelopmentintheNewErawhitepaper(December2020),whichfleshesouthigh-levelguidelinesforenergyunderthe14thFYP,takesstockofrecentprogressandlistsreformstostrengthenthe“drivingforceoftechnologyinnovation”.Threeoverarchingpolicygoalsaresetfortheenergysector:1)addressgrowingenergysecurityconcerns;2)developemergingstrategicindustries;and3)meetthecarbonneutralitypledge.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE30MOST’supcomingCarbonPeakandCarbonNeutralTechnologicalInnovationActionPlan,inthemakingsince2020andbasedonregularexpertmeetingsandseminars.AtechnologyroadmapandalistofR&Dprojectsfor“keycarbonneutraltechnologies”areexpectedtoaccompanytheplan.TheNDRC’sGreenTechnologyPromotionCatalogue(January2021),whichlistsprioritiesforcleanertechnologydevelopmentacrosstheeconomy.Theseinclude:-63areasfor“energysavingandenvironmentalprotection”and26for“cleanerproduction”(e.g.transportandnewenergyvehicles;buildings;powerandgrids;CCUS;steel,cementandchemicals;rareearthmining).-15areasfor“cleanenergy”(e.g.renewablessuchasoffshorewindandadvancedsolardesigns;energystorage;fossilfuels).-8areasfor“greenupgradeofinfrastructure”(e.g.gridsandstorage;rail).TheNDRC’sPollutionControl,EnergySaving,andDecarbonisationSpecialFundsBudgetManagementGuidelines(May2021)setoutconditionsforcentralfundingoftechnologydevelopmentandinfrastructure.Eligibleareasinenergysavingandcarbonreductionincludepower,steel,buildingmaterials,chemicals,energyefficiencyintransportationandbuildings,andbatteryrecycling,aswellasfossilfuelsincludingcoal.Thedocumentalsospecifiessupportforpromotionanddemonstrationof“low-carbon,zero-carbonandcarbon-negativetechnologies”.TheStateCouncil’sCarbonPeakActionPlanby2030(October2021),alreadymentionedabove,alsolistspriorityareasforenergytechnologyandinnovation.MIITpublishedthe14thFYPonGreenIndustryDevelopment(November2021),coveringmostindustrialsectorsfromheavyindustrytotransportation,andenergytechnologiesfromhydrogentoCCUSandrareearthminerals.Whilethereisnoindicationofrankingandalthoughspecificprojectsareyettobefleshedoutformostofthem,thelistofpriorityareasforthe14thFYPincludes:Newenergyvehicles,withanemphasisonelectricmobilityandassociatedcomponentssuchasnext-generationbatteries,aswellashydrogenandfuelcells.TheMinistryofTransport’s14thFYPforComprehensiveTransportationServices,14thFYPforaModernIntegratedTransportSystemand14thFYPforGreenTransportationalsomentionpossibleinnovationfocusonfreight(road,shipping).Hydrogenproduction,notablythroughlow-carbonelectrolysis,transport,storage,distributionanduse,withlarge-scaleapplicationsincludinginindustry,transportationandconstruction.Bioenergytechnologies,suchasadvancedbiofuelsforuseinaviation,shippingandtrucks;bio-basedhydrogenproduction(e.g.biomassgasification);bio-basedmaterialsandchemicalsproductionandrefinery;bio-basedCCUS;andco-powergenerationinlargefossilfuelplants.Energystorageandpowerbatteries,includingatgridscaleandmoltensaltstorageforheatingandpowergeneration.InApril2021,NDRCandNEAalsoIEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE31issuedforconsultationplanson“AcceleratingtheDevelopmentofNewEnergyStorage”,whichwouldincludesupportfornewtechnologydevelopment.CCUStechnologies,suchasforcoal-basedhydrogenproductionandapplicationsinheavyindustry,withinaNationalCCUSInnovationCentrebenefitingfrommoresupportandfundingthanCCUSunderthe13thFYP,andnewmajordemonstrationprojects.InApril2021,theNationalNaturalScienceFoundationalsoidentifiedover20“majorbasicscienceissues”infieldsrelatingtoCCUS.Technologiestodecarboniseheavyindustry,includingironandsteel(e.g.non-blastfurnaceironmakingtechnologydemonstrations,all-scrapelectricfurnaceprocessing)andbuildingmaterialsandcement(e.g.R&Dfornewcementitiousmaterials,low-carbonconcrete,wood,bambooandotherlow-carbonbuildingmaterials),inadditiontohydrogen,CCUSandlow-gradewasteheatapplications.Renewables,suchashigh-efficiencysolarPVand“PV+”models,offshorewind,ocean,waveandtidalenergy,andgeothermal.Nuclearpowerincludingfusion.Basicmaterialsincludingcarbonfibreandaerogel.Digitaltechnologyapplicationsinenergy,suchasforsmartgrids,gridstabilityandflexibilityinanticipationofhighersharesofrenewables,andintelligentbuildings.KeyenergyinnovationprioritiesoutlinedinChina’srecentfive-yearplans11thFYP(2006-2010)12thFYP(2011-2015)13thFYP(2016-2020)14thFYP(2021-2025)GeneralinnovationapproachRampuptechnologymanufacturingtoboostexportsPrimedomesticmarketsandmanufacturinginnovationsSeeknovelinnovationsinprioritytechnologyareasKeepedgeinmanufacturingandprimebreakthroughinnovationsKeyfocusareasforenergyinnovationNuclear,coal,automobilesandnewmaterialsSolar,wind,EVsandchargingNext-generationrenewables,energystorage,newenergyvehiclesandbatteries,smartpowergrids,andbuildingsenergyefficiencyNext-generationbatteriesandnewenergyvehicles,hydrogenandfuelcells,advancedbiofuels,CCUS,industry,andsmartdigitalsystemsNotes:Keyfocusareascorrespondtothosetechnologiesforwhichinnovationismentionedinhigh-levelpolicydocumentsandguidelines.Asprioritiestypicallyrolloverinfive-yearplans,thetablefocusesonadditionsrelativetopreviousFYPs.Source:AdaptedfromAnEnergySectorRoadmaptoCarbonNeutralityinChinabasedonofficialdocuments.Notably,innovationforthedecarbonisationofheavyindustryispresentinthe14thFYPmorethaninpreviouscycles.Forexample,thereareplanstodevelopa“comprehensivereformpilotzonefortheenergyrevolution”inShanxiprovincetostrengtheninnovationingreeningheavyindustries,inaregiontraditionallyreliantIEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE32oncoalwithadynamiccoal-basedinnovationecosystem.Intheironandsteelsector,threeofthetopfivecompaniesinthecountryincludingBaowuhaveputforwardplanstoachievecarbonpeakingbefore2025andneutralityby2050aheadofnationalschedules,strengthenR&D,setupinnovationcentresinexistingfacilitiessuchasinXinjiang,and“createagloballow-carbonmetallurgicalinnovationalliance”tofostercollaboration.ThespecialcentralfundsputinplaceinMay2021bytheNDRCalsosupportenergysavinganddecarbonisationthroughtechnologyupgrading,developmentanddemonstrationinindustrialsectorsincludingsteel,non-ferrousmetals,buildingmaterials,petrochemicalsandchemicals,textile,paper,andmachinery,amongothers.Giventheimportanceofcriticalmineralsincleanenergytransitions,itisnotablethattheserankamongcentralnationalprioritiesinthe14thFYP.Chinaalreadyhasastrongpresenceacrosstheboard,suchasforcobalt,lithium,nickelandrareearthelements.Criticalmineralsandnewrareearthmaterialsarementionedthroughouthigh-levelpolicydocuments–suchasMIIT’s14thFYPforRawMaterialIndustryDevelopment–andarethefocusofnewR&DprojectsproposedbyMOSTin2021.Inthisarea,globalco-operationandmoreinnovationwillbeneededtoensurerecycling,supplychainresilienceandsustainability.FossilfuelsareexpectedtoremainanimportantaspectofChina’senergysecurityinthe14thFYP,withalikelycontinuationofinnovationactivitiesforacleanerandmoreefficientuseoftheseresources.Examplesincludecoaluse,coal-derivedchemicals,coal-biomassmixedpowergeneration,oilandgasexplorationandproductionincludingofunconventionalresources(e.g.shalegas,coalbedmethaneandtightoil),deep-seatechnologies,andlargeliquefiednaturalgasshipsandengines.Formanyoftheseenergytechnologyareas,aswellasfornuclear,improvingtechnologicalself-relianceandreducingexposuretotradefluctuationsarealsodriversforstrengtheninginnovationanddomesticcapacity.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE33Howareinnovationprioritiesimplemented?FYPsaretranslatedintoguidelinesandthenactionplansChina’soverarchingFYPprovideshigh-leveldirectionsbutpartialunderstandingofspecificactivities(seetable).Prioritiesarefurtherdetailedinadditionalpolicydocuments,strategiesandplanssuchastheCarbonPeakActionPlanby2030,andlatertranslatedintoconcreteR&Dactivities.Forthe14thFYPperiod(2021-2025),mostR&Dprojectsareyettobelaunched.In2016,NDRCandNEAdraftedtheEnergyTechnologyRevolutionandInnovationActionPlan(2016-2030),layingoutastrategyto“buildacompleteenergytechnologyinnovationsystem”.In15broadenergytechnologyareas–threeeachforfossilfuelsandrenewables,twofornuclear,andoneforeachCCUS,hydrogen,gasturbines,energystorage,powergrids,digitalandenergyefficiency–thedocumentlaysoutaroadmapwithkeygoalsfor2020and2030,avisionfor2050,andmoredetailedlistsofprioritytechnologies.Forexample,theplansetsfourdirectionsfornuclear:1)exploration,developmentanduseofnuclearresources;2)advancednuclearfuelcomponents;3)newgenerationsofreactors;and4)fusionpower.Fornewdesigns,theplanincludesafocusonsmallmodularreactorswithgoalstolaunchdemonstrationprojectsby2020andreachlarger-scaleproductionby2030,andtoexploreoffshorenuclearpowerplatforms.Forfusionpower,theplansetsatargetto“mastertheexperiment,operationandcontroltechnologyofplasmacombustioninthefusionreactorcore”by2030andthevisionto“buildamillionKW-levelfusionprototypepowerstation”by2050.Buildingonthisactionplanandthe13thFYPforEnergyDevelopment,theNEAdevelopedthe13thFYPonEnergyTechnologyInnovation(2016-2020).ThisFYPmapped21focusareascoveringfivebroadfields:1)efficientuseoffossilenergy;2)newenergypowersystems;3)advancednuclear;4)strategicenergytechnologies;and5)energymaterials.ItproposedspecifictasksforeachareainR&D,demonstrationandindustryapplications(seetable).Althoughthebreakdownisnotexactlysimilar,thefocusareasbroadlymatchthatoftheEnergyTechnologyRevolutionandInnovationActionPlan(2016-2030),withagreaterlevelofdetailsforthe2016-2020period,withanumberofprojectsrunningupto2025.Specialplansandothersectoraldocumentsmayfurtherspecifythesetasks.OtherstrategicdocumentsfleshingoutChina’svisionregardingtechnologyinnovationincludeMadeinChina2025plansfrom2015,whichfocusonenhancinginnovationcapabilityinthemanufacturingindustry,anditslonger-termcomplement,ChinaStandards2035.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE34Selectionoflow-carbonenergytechnologyprioritiesfromNEA’s13thFYPonEnergyTechnologyInnovationFocusareaR&DDemonstrationIndustryuseEfficientuseofrenewableenergy•New,high-efficiencyandlow-costsolarPV•Large-scalehydroincomplexconditions•Comprehensivemanagementofcascadehydropowerstations•Environmentalprotectionandsoilandwaterconservationinhydropowerprojects•Largeoffshorewindof8-10MW•Large-scalesolarthermalpower•Useofbiomassandefficientco-generation•Large-scalepumpedstoragepowerstations•Marineenergyuse•Dryheatrockuse•Carbonfibrecompositewindturbinebladeandanti-icingtechnology•Largeandintelligentoffshorewindof5-6MW•High-efficiency,low-costcrystallinesiliconbatteryindustrialisationIntegrationofhighsharesofrenewablesonthegrid•Keytechnicalequipmentofdirectcurrent(DC)grid•Developmentof±500kVDCtransmissioncable•Newultra-highvoltagealternatingcurrent(AC)transmission•Powerdispatchingcontrolsystemwithcloudtechnology•Smartgridinformationcollectionandcommunication•Intelligentcontrol,dispatchandenergyefficiencyevaluationofwindfarms•FlexibleDCtransmission•Faultcurrentlimitationofhigh-voltageandlarge-capacityACgrids•Gridsecurityandstabilityprotectionsystem•Large-scaleultra-high-voltageDCtransmissionanddispatchoperation•Multileveldispatchcontrolsystemforsmartgrids•Real-timesimulationtechnologyforACandDCgridsEnergystorage•Newhigh-efficiencybatterystorage•Large,distributedpowergridintegrationandcontrol•Interconnectionsystemoperationandtransaction•Large-capacityandlong-lifelithium-titanatebatterystorage•Large-capacitysodium-sulphurbatterystorageatMWlevel•10MW/100MWhadvancedcompressedairenergystorage•AC/DCdistributionnetworktoadapttovariouspowersourcesandconsumeractivity•Industrialisationofvanadiumflowbatterystoragetechnology•Multi-energydistributedgenerationandmicrogrid•InteractiveintelligentpowerconsumptionanddemandresponseHydrogenandfuelcells•Hydrogenfuelcellcatalystmaterials•Hydrogenstorageandtransportation•Renewableenergy-producedhydrogen•FuelcelldistributedpowergenerationIEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE35FocusareaR&DDemonstrationIndustryuseCleanenergymaterials•Solarcellswithperovskitematerials•Polymerfilmmaterialsforhighenergydensitybatteries•Electrodematerialsproductionwithmicro-nanomanufacturing•Newenergystoragematerials•PolymermaterialsforPVmodules•Silverelectrodepasteforcrystallinesiliconsolarcells•CompoundsemiconductormaterialSuperconductingpowertransmission•SuperconductingDCtransmission•2.5MW/5MJhigh-temperaturesuperconductingenergystoragedeviceAdvancednuclearpowertechnologies•Ultra-hightemperaturegas-cooledreactor•Fastneutronreactoroperationandcontrol•Lead-basedalloycoolingreactor•5-10MWclassmanufacturingmodulestackbasedonhighlysafefuel•Thorium-basedmoltensaltreactor•Newgenerationofadvancednuclearfuel•Radioactivewasteminimisation•Controllablefusionfrontiertechnology•CFR600fastreactor•Modularsmallreactor•Keytechnologiesforextendinglifeinnuclearpowerplants•Smartdesignandconstructiontechnologyfornuclearpowerengineering•Offshorenuclearpowerplatform•Third-generationlarge-scaleadvancedpressurisedwaterreactor•600MWhigh-temperaturegas-cooledreactornuclearpowerplant•Advancednuclearfuelsassembly•Advancednuclearpowermonitoringandtestingequipment•DigitalinstrumentationcontrolplatformtechnologyCo-generationreferstothecombinedproductionofheatandpower.Source:13thFive-YearPlanonEnergyTechnologyInnovation.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE36OverviewofChina’sFYPsandfocusonenergyinnovationincyclesprecedingthe14thFYPPolicyFramingforinnovationandtargetsFocusonenergyprioritiesPolicyapproachtoimplementation13thFYP2016-2020Link•The13thFYP(2016-2020)furtherstrengthenedChina’sfocusontechnologyinnovation,“theprimarydrivingforcefordevelopment”,whichrankedfirstintheFYP’sdevelopmentphilosophyandpolicyguidingprinciples.•Thiswasinlinewiththeissuancein2016oftheNationalInnovation-DrivenDevelopmentStrategy.•Keyobjectivesincludedreaching12patentsper10000peoplein2020(upfrom6.3in2015)andacontributionofscientificandtechnologicaladvancestoeconomicgrowthof60%(upfrom55%).LatestestimatessuggestChinareached15.8patentsper10000inhabitantsin2020,surpassingitstarget.•The13thFYPwasrootedintheconceptof“fourrevolutions”,amongthemtheenergyrevolutionaimingto“buildamodernenergysystemthatisclean,low-carbon,safe,andefficient,andwillsafeguardthecountry’senergysecurity”.Assuch,energywasmadecoretoChina’sscienceandtechnologydevelopmentambitions.•Twoenergytechnologyareaswerelistedamongtheplan’ssixstrategicemergingindustries:energystorageanddistributedenergy(e.g.next-generationrenewables,hydrogenpowerandfuelcells,smartgrids,newenergystorage)andnewenergyvehicles(e.g.EVs,batteries,charging).WhileR&Dforelectricmobilityhadalreadybeenmentionedinthe12thFYP,additionalfocuswasputondevelopingbatterytechnology.•Innovationinlong-distancetransporttechnologieswasalsomentioned(e.g.cruiseshipsandhigh-techvessels,aircraftengines),althoughnotspecificallygearedtowardslow-carbondevelopment,aswellasambitionstoexceedinternationalenergyefficiencystandardsinheavyindustry(e.g.ironandsteel,cement,chemicals).•TheFYPexplicitlyaimedfor“thedevelopmentofanationalinnovationsystem”andproposedsupportnotonlyforpubliclyledR&Dprogrammes,butalsoforbusinessinnovation,start-upsandinnovativesmallandmedium-sizedenterprises(SMEs),educationandacademia,researchinfrastructure,anddomesticandinternationalknowledgenetworks.•TheFYPalsoproposedtoleverageChina’slargedomesticmarkettosupportmajorinnovationprogrammes–thatis,toputinplacemarket-orientedmechanismssettingincentivesforinnovatorsandpromotingdomesticdiffusionofemergingtechnologies,therebypullingproductdevelopmentalongtheinnovationvaluechain.•AreformtotheS&Tmanagementsystemwasalsoproposed,inwhichthegovernmentwouldprovidegreaterautonomytoinnovationactorssuchasresearchinstitutesandenterprises,aswellasstrengthenIPrights.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE37PolicyFramingforinnovationandtargetsFocusonenergyprioritiesPolicyapproachtoimplementation13thFYPforEnergyDevelopment2016-2020LinkThe13thFYPforEnergyDevelopment,whichwasfinalisedinDecember2016,containedanumberofinnovationelements.ThesewereaimedatacceleratingChina’stransitionfromalargeenergyproducerandconsumertoastronginnovatorintechnologyandequipment.The13thFYPforEnergyDevelopmentputforwardinnovationtasksforabroadrangeofenergyfuelsandtechnologies,inbothlow-carbonandfossilfuel-relatedfieldswithoutclearindicationsforwhichshouldbeprioritisedovertheothers.Inaddition,itdidnotsetperformanceindicatorsfortheinnovationobjectives.•Theplanincludedspecialsectionslistinghigh-levelguidelinestostrengthenscientificandtechnologicalinnovationcapabilities,establishresearchcentresandlaboratories,promoteindigenoustechnologydevelopmentandentrepreneurship,stimulatetheinnovationpotentialofmajorenergycompaniesincludingSOEs,provideequipmentandinfrastructureforR&D,andcarryoutdemonstrationprojects,amongothers.•Theplan’sguidelinesaspiredtoaddresstechnologyinnovationinasystemicway,includingcomponentsrelevanttoresourcepush(e.g.funding,humancapital),knowledgemanagement(e.g.developingtalents)andmarketpull(e.g.market-creationsupportforemergingtechnologiesandindustries).IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE38PolicyFramingforinnovationandtargetsFocusonenergyprioritiesPolicyapproachtoimplementation13thFYPforScienceandTechnologyInnovation2016-2020Link•The13thFYPforScienceandTechnologyInnovationwasputforwardinmid-2016andaimsforChinatoentertheranksofinnovation-drivencountries,specifically,reach15thpositioninglobalrankingsforinnovationcapacity.•Theplantracksprogresswithover10metrics,including:thecontributionofS&Tprogresstoeconomicdevelopment;R&Dfundingintensity;R&Dpersonnel;operatingrevenueofhigh-techfirms;valueaddedinknowledge-intensiveserviceindustriesperGDPunits;R&D-to-revenueratiosinindustry;citationsofscientificpapers;andpatents.The13thFYPforS&TInnovationincludesprojectproposalsacrosstheeconomyincludinginfieldsrelevanttoenergy,suchas:oilandgas,coal,nuclear,smartpowergrids,materials,energy-efficientbuildings.•Similarlytoother13thFYPdocuments,the13thFYPforS&TInnovationtakesasystemicapproachtoinnovationandcoversresourcesformajorS&Tinnovationprojectsinstrategicindustries,talentmanagementandhumancapital,entrepreneurship,market-orientedR&D,andwaystopromoteanddevelopacultureofinnovationinChina.•Subnationalgovernmenthasaroletoplay,suchaswithmunicipalorprovincialinnovationcentres.•TheplanaimstosupporttheNationalInnovation-DrivenDevelopmentStrategy,MadeinChina2025,Internet+,andotherhigh-levelstrategies.12thFYP2011-2015LinkInthe12thFYP(2011-2015),“scientificprogressandinnovation”werecoreguidingprinciplesforChina’seconomictransformation,andkeyperformanceindicatorsincluded“patentsper10000people”,illustratingStateCouncilobjectivesto“speeduptheconstructionofaninnovationcountry”.Incontrasttothe11thFYP,severalkeylow-carbonenergytechnologiesbenefitedfromanexplicitfocusoninnovationinthe12thFYP,notablysolar,windandEVs.11thFYP2006-2010LinkThe11thFYP(2006-2010)generallymentionedinnovationandtalentdevelopmentasanenablerofgrowth,withgoalssuchasreachingR&Dexpendituresof2%ofGDPin2010,upfrom0.9%in2000and1.3%in2005.WhilesomeoftheFYP’sguidelinesaddressedseveralenergytechnologyareas(e.g.fossilfuelswithafocusoncoal,hydropower,solarandwindenergy),itmostlyfocusedondeployment,withsomeexceptionswhereinnovationactivitieswerementioned(e.g.nuclear,automobiles,coal,newmaterials).IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE39Whatarethecentralgovernment’scoreenergyR&Dprogrammes?BasedontheguidelinessetoutinthevariousFYPsandassociatedstrategydocuments,MOSTisresponsiblefordesigningandmanagingChina’scentralgovernmentresearchprogrammes.Since2015,therearefivemaintypesofnationalscienceandtechnologyprojects,andMOST’sNationalScienceandTechnologyManagementSystemsupportswithresourceallocationacrossthem.Theseinclude:NationalMajorScienceandTechnology(S&T)Projects,whichmatchthecountry’stopprioritiesandpoolextendedresourcesforalimitedduration(e.g.runningupto2030forsomeprojectslaunchedunderthe13thFYP).NationalKeyR&DProjects,broadinscopeandaddressingalleconomicareas.ProjectsundertheTechnologyInnovationGuidanceFund,whichusesmarketmechanismstosupportinnovation.ProjectsundertheNationalNaturalScienceFoundation,mostlybasicresearch.Talentdevelopmentprojects,supportinginnovatorsandhumancapital.China’sNationalMajorS&TInnovationProjectsandNationalKeyR&DProjectscentralisethecountry’sR&Dactivities.TheyincorporatepreviousprogrammessuchasMOST’s863Programme(orStateHigh-TechDevelopmentPlan)and973Programme(orNationalBasicResearchProgramme).TheMajorS&TInnovationProjectsrankamongtheworld’slargestfundingprogrammesforenergytechnologydemonstration,withselectedSOEscarryingresponsibilityforapriorityengineeringchallengeandsupportedwithmulti-annualfunding,suchasUSD1billionoverfiveyears.Localgovernmentsandenterprisesarealsoencouragedtotakepart.Amongthe16projectsannouncedfor2020-2030areturbines,coaluseandsmartgrids.TheKeyR&DProjectsaccountformuchoftheR&DfundingdisbursedbyMOST.AroundUSD200millionofthiswasallocatedannuallytoEVsandsmartgridsin2016and2017,oftenforbasicresearch,andaroundUSD65millionwasallocatedtorenewableenergyandhydrogenin2019.In2016-2017,cleanandenergy-savingcoalreceivedUSD70millionperyear.Throughoutthe13thFYPperiod(2016-2020),MOSTsupportedover3500R&DprojectswithaboutCNY76billion(aboutUSD11billion)infundingacrossalleconomicareas.Outofthe15NationalMajorS&TInnovationProjectsputforwardinthe13thFYPforScienceandTechnologyInnovation,atleastfourweredirectlyrelevanttoenergyandanotheronmaterialsindirectly;over20outofmorethan100proposedKeyR&DProjectswererelevanttoenergyfields.Together,theseresearchprojectsaspiretocoveralltechnologyareasmentionedintheFYPs.GiventheIEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE40high-leveldirectionssignalledin14thFYPdocuments,manyoftheR&Dprojectsrunninginthe13thFYPperiodareexpectedtocontinueinthenextcycle.Inthefirsthalfof2021,MOSTopened55R&DprojectareasforconsultationforNationalKeyR&DandKeySpecialProjects,amongthemhydrogen,energystorageandsmartgrids,newenergyvehicles,andrareearthmaterials.Itannouncedthat784R&Dprojectswouldbesupportedinthefirstyearofthe14thFYP(2021-2025)withaboutCNY20billion(aboutUSD3billion)infunding.Theministryissuedspecificguidelinesforfocusareasandeligibilityrequirements,suchasfor18R&Dprojectareasinhydrogentechnologies,18innewenergyvehicles,20inenergystorageandsmartgrids,and33inrareearthnewmaterialswithimplementationperiodsofthreetofiveyears.Ineacharea,severalprojectscanruninparallelandbenefitfromstatefunding.Severalplanshavefollowedandothersareyettobepublished.Eachincludesbudgets,proceduralguidelinesandrequirementsforapplicants,possiblefocusareas,assessmentindicatorsandreportingmethods.Someroadmapsmayalsobesupportedbyinternationalknowledgepartners,suchastheCCUSdemonstrationanddeploymentroadmapdevelopedin2015incollaborationwiththeAsianDevelopmentBank.Subnationallevelsofgovernmentarealsoinvolved.Forexample,MOSTissuedtheframeworkforHydrogentoTenThousandHomesprojectinShandongincollaborationwiththeShandongProvincialScienceandTechnologyDepartment,whichallocatesstatefundingofuptoCNY150million(uptoUSD20-25million)forprojectsintheregion.ShandongprovinceannouncedoverCNY30billion(aboutUSD4.5billion)ofhydrogenindustryinvestmentsthisyear,andtheprovincialcapitalJinanplanstosetupthreehydrogenR&Dplatformsby2022aspartofitsActionPlanfortheDevelopmentofJinanHydrogenEnergyIndustry(2020-2022).Similarly,GuangdongProvincepublishedtheActionPlanforAcceleratingtheConstructionofFuelCellVehicleDemonstrationCityClusters(2021-2025).TodesignR&Dprogrammes,MOSTgathersaninter-ministerialjointconference,whichpartlyoverlapswiththemembersoftheNECandincludesrelevantadministrations,anadvisoryboardcomprisingscienceandindustryexperts,andprofessionalgoverningagencies(PGAs),whicharemandatedwithoverseeingresearchactivitiesandevaluatingresults.TherearesevenPGAsintotal,includingfourunderMOST,suchasACCA21.Forthe14thFYPcycle,MOSTkick-startedhigh-leveldesignofnationalprogrammesinthebeginningof2020andcollectedinformationthroughconsultationsabout16000majorR&Dneedsfrom67departmentsand2400scientificresearchunits.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE41ProcessfrompolicymakingtoimplementationandevaluationofR&DactivitiesIEA.Allrightsreserved.ProgrammesusuallykickoffintheyearfollowingtheFYPandrunforaperiodoffiveyears.Inthe13thFYPforEnergyTechnologyInnovation,themajorityofproposedenergyR&Dprojectsranoverthe2016-2021period,withsomelargerprojectsnotablyfordemonstrationrunninguntil2025.AfewcurrentR&DprojectsunderthesupervisionofMOSTrunoverthe2017-2022and2018-2023periods.TheEnergyTechnologyRevolutionandInnovationActionPlan(2016-2030)aimstoprovidecontinuityforprogrammesthatspanacrossmultipleFYPs.Inpractice,eachprojectcomeswithdedicatedimplementationplansandperformanceobjectivesandtargetstodeliveronlonger-termtechnologyroadmaps.Additionalguidancedocumentsmaybepublishedeveryyeartorefinetargetsandupdateprioritiesbasedonprogress.Projectsarethenbrokendownintoresearchactivities,eachwithanarrowerfocusandspecificmilestones.PGAsscopetheprojectsandthenissuecallsforapplicationsforinterestedparties(e.g.researchinstitutes,universities,SOEs,privatebusinesses,China-basedaffiliatesofoverseasentities)toimplementandachievetheproposedtargets.PGAsselectwhichentitiesmayleadactivitiesonagivenproject,ultimatelyreportingtoMOST.Halfwaythroughtheperiod,forexampletwoyearsafterimplementationforaprojectspanningovertheFYP,amid-termassessmentofprogressmaybecarriedout.Uponexpirationoftheproject’speriod,PGAsevaluateoutputsandwhethertargetshavebeenachieved,feedingbackintosubsequentfundingdecisions.PolicymakingNationalEnergyCommissionNationalEnergyAdministrationMinistryofScienceandTechnologySubnationalgovernmentsR&DprogrammedesignMinistryofScienceandTechnologyInter-ministerialJointConferenceR&DbudgetsMinistryofFinanceNationalNaturalScienceFoundationofChinaOtherguidingfundsandregionalbudgetsR&DprojectssupervisionProfessionalgoverningagenciesExperts,overseers,auditorsR&DactivitiesUniversitiesResearchinstitutesState-ownedenterprisesPrivatecompaniesMonitoring,evaluationMinistryofScienceandTechnologyMinistryofFinanceIEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE42SelectionofR&DprojectsannouncedbyMOSTforthe14thFYPcycle(2021-2025)TechnologyareaPossibleprojectfocusareasHydrogenPlannedstatefundingfornationalprojects:CNY795million(USD125million)PlannedstatefundingforShandingprojects:CNY150million(USD25million)Nationalprojects:•Productionoflow-carbonhydrogenbyelectrolysiswithrenewables•Low-costmaterialsforprotonexchangemembranes,andhigh-efficiencyelectrolysers•MethanolproductionthroughelectrolytichydrogenandCO2•Ammoniaproductionthroughelectrolytichydrogenandnitrogen•Hydrogenstorage,transportationanddistributiontechnologies•Hydrogenhigh-efficiencypowersystemsandfuelcellsProjectsincollaborationwithShandongprovince:•Productionoflow-carbonhydrogenbyelectrolysiswithrenewables•Hydrogenpowersystemsandfuelcellsforvariousapplications(e.g.automobiles,ships,cargo,publictransportation,buildings)•Hydrogensupplypipelines•Refuellinginfrastructureforvehicles,onhighwaysandinports•HydrogenproductionanduseonsiteinindustrialparksNewenergyvehiclesPlannedstatefunding:CNY860million(USD135million)•Advancedbatterydesigns(e.g.all-solid-statemetallithium)•Solidoxidefuelcellsforvehicles•High-densityandlarge-capacitygasandhydrogenstorageandsupplysystemsforheavyvehicles•Pureelectricbusesandheavy-dutyvehicles•Newelectricdrivesystems•Hybridenginesandhigh-efficiencyelectromechanicalcoupling•Intelligentandautonomousdrivingtechnologies•VehiclenetworkintegrationandcharginginfrastructureRareearthmaterialsPlannedstatefunding:CNY347million(USD55million)•Rareearthpermanentmagnetmaterials,forapplicationssuchasinelectricmotorsfornewenergyvehicles•High-efficiencyrareearthopticalfunctionalmaterials,forapplicationssuchasinphotovoltaics•High-energydensityrareearthmaterials,forapplicationssuchasinhydrogenenergyandenergystorage•Superlatticerareearthhydrogenstorageelectrodematerials•Specialrareearthfunctionalallow,forapplicationssuchasinnuclearsafety,vehiclelightweightingandmotors•RareearthrecyclingEnergystorageandsmartgridsPlannedstatefunding:CNY667million(USD105million)•GWhlithium-ionbatteryenergystoragesystemforgridintegrationofhighsharesofintermittentrenewables•MWhsolid-statelithium-ionbatterydesigns•Metalsulphur-basedbatteries•Short-termhigh-frequencyenergystorage•GridtechnologiesincludingflexibleDCconverterplatformsforoffshorewind,largeAC/DChybridpowergrids,andlow-frequencypowertransmission•Multi-usersupply-demandinteractionandflexibility,virtualpowerplants,distributedenergyresourcesSources:Summaryof2021projectapplicationguidelines;Summaryoftherequirementsoftheformreviewofkeyspecialprojects;Noticeforthekeyspecialprojectsonhydrogen;Noticeforthe"HydrogentoTenThousandHomes"project;Noticeforthekeyspecialprojectsonnewenergyvehicles;Noticeforthekeyspecialprojectsonrareearthnewmaterials;Noticeforkeyspecialprojectsonenergystorageandsmartgrids.IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE43NationalMajorS&TInnovation2030Projectsrelevanttoenergyunderthe13thFYPforS&TInnovationdevelopedbyMOST(2016-2020)ProjectscopeFocusareas1.Largeoilandgasfieldsandcoalbedmethanedevelopment(MajorS&TProject)•Deep-seaoilandgasexplorationanddevelopmenttechnologiesandequipment•Shalegasequipment•Coalbedmethanetechnologies•Recoveryofcomplexoilandgasfields•Oilandgasindustrialequipment2.Largeadvancedpressurisedwaterreactorandhigh-temperaturegas-cooledreactornuclearpower(MajorS&TProject)•CAP1400pressurisedwaterreactorshieldedmainpumps,controlsystems,fuelcomponents•High-temperaturereactorsteamgenerators,fuelsystems,nuclear-gradegraphite•200MWhigh-temperaturegas-cooledreactordemonstration(2017)•CAP1400demonstrationproject(2020)3.Cleanandefficientuseofcoal(MajorEngineeringProject)•High-efficiencycoalproduction(e.g.below305gCO2/kWh)•Coalconversion•Coalpollutioncontrol(e.g.reduceemissionsofconventionalpollutantsby50%relativetocurrentlevels)•CCUS(e.g.demonstrationofpost-combustioncapturetoachieve1milliontonnes/year)•Moderncoalchemicalandpolygenerationtechnologies4.Smartgridtechnologyandequipment(MajorEngineeringProject)•Large-scalerenewableenergygrid-connectedcontrol(e.g.with250GWofwindpowerand150GWofsolar)•Flexibleinterconnectionoflargepowergrids•Demonstrationof+/-1100kVDCpowertransmission)•Multi-userinteractivepowersupplyanddemand•Smartgridequipmentandsystems5.Newmaterials(MajorEngineeringProject)•Carbonfibreandcompositematerials•High-temperatureandspecialalloysforhigh-endequipment•Advancedsemiconductormaterials•NewrareearthmaterialsNote:Projectsarerankedintheorderofappearanceinthe13thFYPforScienceandTechnologyInnovation(2016-2020).Source:13thFive-YearPlanforScienceandTechnologyInnovation(2016-2020).IEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE44SelectionofNationalKeyR&DProjectsrelevanttoenergyunderthe13thFYPforScienceandTechnologyInnovationdevelopedbyMOST(2016-2020)ProjectscopeFocusareas1.Safe,cleanandefficientcoaldevelopmentandutilisationandnewtypesofenergyconservationSeeprevioustable2.Renewableandhydrogenenergytechnology•Solar•Wind•Biomass•Geothermal•Oceanenergy•Hydrogen•Renewableenergycouplingandsystemsintegrationtechnology3.Nuclearsafetyandadvancednuclearenergytechnology•Advancednuclearfuel,spentfuelreprocessingandwastetreatment•Nuclearsafety,riskandsevereaccidentmanagement•Ultra-hightemperaturegas-cooledreactors•Advancedfastreactors•Supercriticalwater-cooledreactors•Newmodularsmallreactors4.SmartgridsSeeprevioustable5.Energy-efficientbuildings•Technicalstandardsforultra-low-energybuildings•Buildingenergyevaluationsystems•Energy-savingintegrationandhigh-efficiencycoolingtechnology•Active/passivemulti-energysystems•Newtypesofdaylightingandefficientlighting6.Newenergyvehicles•EVbatteryandbatterymanagementsystem•Motordriveandpowerelectronics•EVsmarttechnologies•Fuelcellpowersystems•Plug-in/extendedhybridsystem•Pureelectricpowersystem•Equipmentformanufacturingandproductionchains7.Railtransportation•High-speedtrainsandassociatedequipment•Inter-Europeanrailwayinterconnection•Energy-savingtechnology8.Marinetransportation•Cleanerandsmartshipbuildingandassociatedequipment•Shipoperationandmaintenancesmartsystems9.Airtransportation•Newenergycivilaircraftproductionandassociatedequipment•Airtrafficcontrolsystems10.Biomanufacturing•Manufacturingofmajorchemicalproducts•Newbioenergysources•BiotransformationoforganicwastegaseousCO2resources•NewsourcesofindustrialmaterialsandmanufacturingprocessesIEA.Allrightsreserved.TrackingCleanEnergyInnovationChina’sinstitutionallandscapeforenergyinnovationFocusonChinaPAGE45ProjectscopeFocusareas11.Preventionandcontrolofairpollution•Dynamicsofhazeandozoneformation,andmonitoring•Pollutioncontrolandrelationshipwithpublichealth•Technologiesfordesulphurisation,de-nitration,dustremoval,volatileorganiccompoundcontrol,dieselengineemissionspurification•Airpollutionandqualitymonitoringandcontrolsystems12.CleanerproductioninmanufacturingPollutionemissionsreductionfromindustrysources,withafocusonsteelandchemicalsproduction13.Coalresourcesdevelopment•Smartcoalresourceexploration•Largemineconstruction•Carbonemissionscontrolinminingareas•Cleanerprocessingandmorecomprehensiveutilisationofcoal14.Oilandgasresourcesdevelopment•Drilling,production,storageandtransportationequipment,tools,softwareandmaterials•Unconventionaloilandgasresources15.Urbandevelopment•Electricity-gas-thermalenergysystemsandnetworks•Smartcities16.Greenandprefabricatedbuildings•Near-zeroenergybuildingplanninganddesign•High-efficiencyheatingsolutions•Applicationofdigitaltechnologiesinbuildingdesign,constructionandoperationandmanagement•Prefabricatedbuildingsandconcreteandsteelstructures17.Deep-seaexplorationSeeprevioustable18.Large-scaleoffshoreengineeringequipment•Deepwatersemi-submersibledrillingplatformsandvessels•Floatingliquefiednaturalgasproduction,storage,offloadingandregasificationequipment19.Deepearthresourceexploration•Deep-earthmineralextractionequipment•Explorationforoilandgasresourcesatdepthsof8-10km•Explorationforminerals(includinguranium)atdepthsof1-3km20.PolarresourceexplorationOilandgasexplorationandnaturalgashydrateresourcedevelopmentinpolarregions21.Strategicbasicresearchandmajorforward-lookingscientificissues•Physicalandchemicalbasesfortheefficientandcleanutilisationandconversionofenergy•Earthsystemprocessesandresourcesandenvironmentalanddisastereffects•Newprinciplesandnewmethodsforthedesignandpreparationofnewmaterials•Syntheticbiology•Scientificresearchondeepseaanddeepground•DevelopmentofmagneticallyconstrainednuclearfusionenergyNote:Projectproposalsarerankedintheorderofappearanceinthe13thFYPforScienceandTechnologyInnovation(2016-2020),andfocusareasmayoverlapinsomeinstances.Source:13thFive-YearPlanforScienceandTechnologyInnovation(2016-2020).IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE46ResourcesforenergyinnovationIntroductionThissectionreviewstheresourcesavailableforenergyinnovationinChina.Specifically,ittracksaselectionofinnovationinputmetricssuchaspublicenergyR&Dspending,energyR&DspendingbyChinesegloballylistedcompanies,venturecapitalinvestmentsincleanenergystart-ups,andhumancapitaldevelopmentincludingR&Dpersonnel.KeytakeawaysChinahasbecometheworld’ssecondlargestpublicspenderinenergyR&D(aboutUSD8.4billionin2020)aftertheUnitedStates,surpassingotherestablishedtechnologyhubssuchasJapanandEurope.PerunitsofGDP,Chinarankedeighth.Whilebudgetsallocatedtolow-carbontechnologydevelopmenthavebeensteadilyincreasinginlinewithMissionInnovationpledges,andissecondonlytotheUnitedStatesintermsofcleanenergyR&Dspending,Chinaallocatesasubstantialpartofitsbudgettofossilfuelresearch.Inrecentyears,Chinahasbecomeacleanenergyventurecapitalpowerhouse,ledbyelectricmobilitystart-ups.Thesehavereapedthebenefitsofsupportfromgovernmentincludingpublicfunds,SOEsanduniversities.Chinaispromotingacultureofinnovationandseekingtodevelopaskilledworkforceabletoadvancethecountry’stechnologydevelopmentambitions.ThenumberofR&DpersonnelisgreaterinChinathaninanyothercountry–eventhoughitstilllagsbehindpercapita–andyouthisincreasinglyeducated.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE47PublicfundingforenergyinnovationPublicspendingforenergyR&DinChinasignificantlyincreasedunderthe13thFYP,fromaboutUSD7.3billion(CNY49.0billion)in2015toUSD8.4billion(CNY57.0billion)in2020,basedonIEAtracking.ThisincreasehasenabledChinatobecometheworld’ssecondlargestenergyR&DspenderinabsolutetermsaftertheUnitedStates,andeighthgloballyperunitsofGDP.Energyaccountedforabout5.5%ofChina’spublicexpendituresforR&D.In2015,ChinapledgedunderMissionInnovationtodoublecleanenergyR&Dspendingoverafive-yearperiodcoincidingwiththe13thFYP.ThispledgeincludedasubstantialamountofR&Dspendingdedicatedtoamoreefficientuseofcoal,includingCCUS.ThelatestdatasuggestthatChinanearlymetitstargetin2020.EstimatesbasedonreportingstoMissionInnovationsuggestChina’slow-carbonenergyR&DspendingsteadilyincreasedfromUSD2.6billion(CNY17.4billion)toUSD4.0billion(CNY27.3billion)overthe2015-2020period,whichcorrespondstoa60%increase,whileGDPgrewbyabout30%overthesameperiod.Asaresult,low-carbonbudgetsincreasedtheirsharewithinoverallenergyR&Dbudgetsfrom35%tonearly50%.Whiletotalspendingdecreasedin2019,theslowdownwasduetodropsinnon-low-carbonenergyR&Dspending–andreflectstheendoftheFYPperiod.IncreasingbudgetshaveenabledChinatoranksecondgloballyintermsofabsolutelow-carbonenergyR&Dspending,behindtheUnitedStates.Untiltoday,China’spublicenergyR&Dbudgetshavemostlybeenallocatedtothedevelopmentoffossilfuel-relatedenergytechnologies,suchasthecleanerandmoreefficientuseofcoal,andoilandgasresourceexplorationanddevelopment.Infact,Chinaisbyfartheworld’stopspenderonfossilenergyR&D.Trendsduringthe13thFYP–notablysinceMissionInnovationpledgesin2015–andexpectationsforthe14thFYPsuggestanincreasingfocusonlow-carbonenergytechnologies,butthiswarrantsfurtheranalysisoverthe2021-2025period.Limiteddatagranularitymakesin-depthanalysisandtrackingchallenging,particularlyatthetechnologylevel.Forexample,flagshipMOSTfunding(e.g.formerly973and863programmes)accountedforonlyaboutUSD800millionoverthe2006-2010period,leavingbudgetgapsthatcouldbeexplainedbydemonstrationprojects,spendingmadebySOEs,orotherprogrammesnotmanagedbyMOST.TherearealsouncertaintiesrelatedtoinvestmentsmadebySOEs,whichareestimatedtoaccountforabout80%ofpublicenergyR&Dinvestments,particularlyinthecoalindustryandpowerandheatsectors,inwhichmostmajorcompaniesarestate-owned.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE48PublicspendinginenergyR&DinChinafrom2015to2020IEA.Allrightsreserved.Note:Duetodataavailabilitylimitations,CCUSspendingiscountedunder“Fossil”.Source:IEAanalysisbasedonofficialdataandMissionInnovationreporting.TopspendersgloballyinenergyR&Din2020IEA.Allrightsreserved.Note:Duetodataavailabilitylimitations,CCUSspendingiscountedunder“Fossil”.Source:IEAanalysisbasedoncountrysubmissionstotheIEA,officialdataandMissionInnovationreporting.PublicspendinginenergyR&DperthousandunitsofGDPin2020IEA.Allrightsreserved.Source:IEAanalysisbasedoncountrysubmissionstotheIEA,officialdataandMissionInnovationreporting.0246810201520162017201820192020USD(2020)billionRenewables,efficiencyandcross-cuttinglow-carbontechnologiesNuclearFossil0246810NorwayKoreaCanadaUnitedKingdomGermanyEuropeanUnionFranceJapanChinaUnitedStatesUSD(2020)billionFossilNuclearRenewables,efficiencyandcross-cuttinglow-carbontechnologies0.00.51.01.5ItalyGermanyNetherlandsKoreaAustriaCzechRepublicUnitedStatesUnitedKingdomSwedenDenmarkChinaSwitzerlandJapanFinlandCanadaBelgiumFranceNorwayUSD(2020)perthousandGDPunitsIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE49EnergyinnovationinthebusinesssectorEnergyR&DspendingbyglobalChinesecompaniesIEAestimatesofR&DspendingbygloballylistedcompaniessuggestthatChinesecompanies–eitherstate-owned,privateorwithmixedownership–spendmoreonenergyR&Dthaninanyothercountry.In2020,ChinesefirmsspentnearlyUSD35billiononenergyR&D,a15%increaserelativeto2019,againstaboutUSD30billioninEurope,USD17.5billioninJapanandUSD15billiontheUnitedStatesinthesamesectors.Mostofthesebudgetsareallocatedtothedevelopmentofcleanerormoreefficientuseoffossilfueltechnologies.Oil,gasandcoalareestimatedtoaccountforabout30%oftotalinvestments,aheadofpowerandgrids(27%)andfaraheadofautomotive(16%),renewables(11%),batteries,hydrogenandenergystorage(5%),andnuclear(4%).Spendingonfossilfuelshasbeensteadilyincreasinginrecentyears.Spendingonrenewablesmorethandoubledoverthe2015-2020periodcoincidingwiththe13thFYP;tripledforbatteries,hydrogenandenergystorage;andquadrupledfornuclear.Inhard-to-decarbonisesectorssuchasheavyindustryandlong-distancetransportation,ChinesecompanieshavealsosteadilyincreasedtotalR&Dspending,althoughitisexpectedthatonlyafractionofthesebudgetswillbeallocatedtothedevelopmentofnewlow-carbonenergytechnologyapplications.IronandsteelattractedoverUSD12billioninR&Dinvestmentsin2020,aboutUSD11billioninchemicals,andnearlyUSD1billionincement.CompaniesdevelopingdrivetrainsandothertechnologiesfortrucksandcommercialvehiclesspentaboutUSD2billion,andUSD1.9billionwentforshipbuilding,USD1.7billionforaviation(upfromvirtuallynospendingin2015)andUSD1.4billionforrail.Expectationsforthe14thFYPsuggestthatChineseenterprisesmayaccelerateenergyinnovationactivitiesrelevanttocementandsteelproduction,suchasthroughtheprivate-ledlaunchofdemonstrationprojectsforCCUSapplications.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE50EstimatedenergyR&DspendingbygloballylistedcompaniesheadquarteredinChina,bytechnologyarea,2015-2020IEA.Allrightsreserved.Notes:Fuelcellsandhydrogenareincludedin“Energystorageandbatteries”andaccountforonlyafractionofthecategory.“Energyefficiency”includesappliances,lightingandheatingandcoolingtechnologies,butexcludeselectricalcomponents.CorporateenergyR&DspendingincludesreportedR&Dexpenditurebycompaniesinsectorsthataredependentonenergytechnologies,includingenergyefficiencytechnologieswherepossible.Automotiveincludestechnologiesforfueleconomy,alternativefuelsandalternativedrivetrainsincludingtrucks.ToallocateR&Dspendingforcompaniesactiveinmultiplesectors,sharesofrevenuepersectorareusedintheabsenceofotherinformation.ClassificationsarebasedontheBloombergIndustryClassificationSystem.AllpubliclyreportedR&Dspendingisincluded,hencecompaniesthatdonotdiscloseR&Dspendingareunderrepresented.Dependingonthecompany,publiclyreportedcorporateR&Dspendingcanincludecapitalisedandnon-capitalisedcosts,frombasicresearchtoproductdevelopment.SourceIEAcalculationsbasedonBloombergdata.EstimatedR&DspendingbygloballylistedcompaniesheadquarteredinChinawithactivityinheavyindustryandlong-distancetransporationIEA.Allrightsreserved.Notes:“Otherindustry”includesindustrialfurnacesandovens,metalworkingmachinery,flowcontrolequipment,industrialtrucks,plasticsandrubber,recyclingandwoodworking.SourceIEAcalculationsbasedonBloombergdata.05101520253035201520162017201820192020USD(2019)billionNuclearpowerEnergystorageandbatteriesEnergyefficiencyRenewablesAutomotiveElectricitygeneration,supplyandnetworksThermalpowerandcombustionequipmentCoalOilandgas051015202530201520162017201820192020USD(2019)billionIronandsteelChemicalsPulpandpaperCementOtherindustryShippingAviationRail0123456201520162017201820192020IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE51TheroleofChineseenterprisesininnovationEstimatesofR&DbudgetsallocatedbyChinesecompaniesareinpartblurredbytheoverlapbetweenbusinessandpublicsectorsinChinagiventheprominentroleofSOEs,especiallyintheenergysector.Historically,therehavebeencloselinksbetweenSOEsandfundingforR&DavailablebyMOST,suchasthroughtheNationalMajorS&TandKeyR&DProjects.ThishasgivenacentralroletoSOEsininnovationalongsideotherpubliclyledinstitutions,universitiesandresearchinstitutes,whileprivatecompaniestypicallyplayedasmallerroleuntilthe2010s.Thisisstillthecasetodayincertainfieldsofstrategicimportancesuchasnuclearpower,coalandotherfossilfuels.TheclosetiesbetweenSOEsandthegovernmentimplythatR&DinitiativesfinancedbySOEsoftenalignwellwithnationalpriorities.SOEsalsobenefitfromstrongerfinancialsupportandpoliticalconnectionsrelativetoprivatefirms(e.g.preferentialcostsofborrowing),especiallyfromstate-ownedbanks.Meanwhile,privatecompanieshavebeencentralactorsinsolarPV,EVandbatterytechnologydevelopment,illustratingapossiblestrengtheningoftheirroleinChineseinnovation.SuccessiveFYPsinthelastdecadeshaveprogressivelyencouragedcompanies,bothpublicandprivate,tostrengthentheirroleinenergytechnologyinnovation.In2006,theNationalMediumandLong-TermScienceandTechnologyDevelopmentPlan(2006-2020)alreadyencouragedenterprisestobecomethe“mainstayoftechnologicalinnovation”.The13thFYP(2016-2020)alsoaimedto“strengthenthepositionofenterprisesasprincipalentitiesforinnovation”,andplannedtosetupcorporatetechnologycentres,supportpublicstart-ups,andofferadvantageousR&Dtaxcreditsandpublicprocurementofinnovativeproducts.In2019,theNDRCpublishedpolicyguidelinesonBuildingaMarket-OrientedGreenTechnologicalInnovationSystem,whichunderscorethe“themainroleofenterprisesingreentechnologyresearchanddevelopment,transformationofresults,demonstrationapplicationsandindustrialisation”,andaimtobuild“agroupofleadingenterprisesingreentechnologyinnovation”.Thenoticealsoincludedspecifictargetsforthe2019-2022period,incollaborationwithMOST,suchas:Identifying1000greentechnologyinnovationenterprises.Establishing100greenenterprisetechnologycentres.Supporting10leadinggreentechnologyinnovationenterpriseswithanannualoutputofoverCNY50billion(aboutUSD8billion).Increasingsupportforcorporategreentechnologyinnovation,withtheviewtoreachashareofMajorNationalS&TProjectsandNationalKeyR&DProjectsledbyenterprisesofover55%.The14thFYPfeaturesadedicatedchapteron“Enhancingtheenterprise'stechnologicalinnovationcapability”.In2021,PresidentXiexplainedChina’sgoaltoenhanceinnovationatallstagesoftheindustrialchainandincreaseIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE52“technologicalself-reliance”byestablishingenterprisesas“themainstayofinnovation”.Specifically,thegovernmentseekstoencourageallenterprises–andcentralSOEsinparticular–toincreaseR&DspendingthroughextradeductionsforR&Dexpensesandtaxincentives,andtotaketheleadintheimplementationofMajorNationalS&TandNationalKeyR&DProjects.Thestrategyalsoinvolvessettingupcollaborativepartnershipswithotherenterprises,universitiesandresearchinstitutes;promotingregionalclusterswithmixedownershipwithlocalgovernment;facilitatingaccesstofinanceincludingthroughventurecapital;andprovidingspecialsupporttosmallandmediumenterprises.In2020,theChineseSecuritiesRegulatoryCommissionalsosetstricterrequirementsforR&Dspending–morethan5%ofoperatingincome–andownershipofpatentsofinventiontolistontheShanghaiStockExchange’sScience&TechnologyBoard.AsinmanyothercountriesandregionsincludingtheUnitedStates,Japan,SouthKoreaandEurope,alargeshareofChina’stotalR&Dspendingcomesfrombusinessactors.In2015,estimatessuggestedthatover60%ofChina’stotalenergybudgetsforR&Danddemonstrationcamefromprivateindustrysources,against35%fromSOEsandgovernmententities.AccordingtodatafromtheOrganisationforEconomicCo-operationandDevelopment(OECD),in2019over75%ofChineseR&Dbudgetscamefrombusinessenterprises,againstabout15%fromgovernmentbodiesand10%frominstitutionsofhighereducation.Incomparison,businessactorsaccountedforonly60%oftotalR&Dspendingin2000,against30%fromgovernment,illustratingtheirstrengtheningrole.WhilethebusinesssectoraccountsforalargeshareoftotalandenergyR&Dspending,enterprisesmostlyfocusonexperimentaldevelopment,productandmanufacturinginnovation,whereaspublicinstitutionsandhighereducationfocusonearlierstagessuchasbasicandappliedresearch.OECDdatashowthatin2019,over95%ofChineseenterprises’R&Dbudgetswereallocatedtoexperimentaldevelopment,muchmorethangovernmentbodies(50%)andinstitutionsofhighereducation(10%),whichspentgreatersharesonbasic(15%forgovernment,40%forhighereducation)andappliedresearch(30%government,50%highereducation).Thisdifferencesuggeststhatthepublicandprivatesectorsfundnon-substitutabletypesofR&D.Undertherightconditions,SOEsmaybewellplacedwithinChina’sinnovationsystemtobridgepotentialgapsbetweenlabandmarket.VenturecapitalactivityincleanenergyInrecentyears,ChinahasbecomeacleanenergyVCpowerhouse,ledbythetransportsector.VCinvestmentsareanimportantsourceoffundingforstart-upstodevelopnewenergyproductsandservicesandbringemergingtechnologyconceptstomarkets.TheyrepresentavaluablecomplementtopublicandprivateenergyR&Dbudgets.Trackingearly-stageinvestmentscanhelpidentifytrendsandinvestorappetiteforrelativelylessmaturetechnologies.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE53Anincreasingroleforstart-upsinChinaBusinessinnovationandstart-upshavenotalwaysbeencoretoChina’sinnovationstrategytodeveloppre-commercialtechnologies.Sincethe13thFYP,however,moreemphasishasbeenputonsupportingentrepreneurs,incomplementtotraditionalpubliclyledR&Dprogrammes.Whilethe12thFYP(2011-2015)onlybrieflymentionedtheroleofstart-upsinChina’sinnovationecosystem,the13thFYP(2016-2020)dedicatedafullchapterto“Encouragepublicstartupsandinnovations”.The13thFYPforScienceandTechnologyInnovationsoughttodevelopVCinvestments,includinggovernment-backedVCsuchasthroughtheChinaState-OwnedCapitalVentureCapitalFund,whichtargetsinvestingoverCNY200billionovertime(overUSD30billion),andtheNationalEmergingIndustryVentureCapitalInvestmentGuidanceFund,whichtargetsCNY40billion(USD6billion).The13thFYPalsoaimedtoprovidepublicservicesforstart-upsinallcounties,improveemploymentconditionsforinnovatorsandestablishdemonstrationareasforstart-ups.ThiswasinlinewiththeNationalInnovation-DrivenDevelopmentStrategypublishedin2016,whichincludedsectionsonentrepreneurshiptopromote“incubation+venturecapital”modelsaswellasinnovationinmicroandsmallenterprises.China’s“guidancefunds”helpsupportstrategicindustriesandstart-upsIn2015,Chinaestablishednewspecialpublicfundstosupportnewcompaniesinstrategicemergingindustries,promotemassentrepreneurshipandaccelerateindustrialupgrading.Thegovernmentalsopublishedassociatedguidelinesonwaystosetupandoperatesuchafund.Whilethisannouncementcameaspartofawaveoflaunchesofnewfunds,theconceptofpublic“guidancefunds”wasnotnewandhadbeenpilotedsinceatleastthe2000s,suchasthroughtheZhongguancunVentureCapitalGuidanceFund.Inpractice,guidancefundsareassetmanagementcompaniesselectedafterpublicbiddingtooperateandmanagecentral,regionalandlocalgovernmentfunds,withtheviewtoinvestincompaniesandattractotherinvestors.Guidancefundsreporttothegovernment–alimitedpartneroftheinvestor–butkeepsomeindependenceinoperationaldecisions.TheymaybeoverseenbyministriesordirectlymanagedbypublicinstitutionsandSOEs.Theyareencouragedtocollaboratewithlocalactorsandindustryincludingthroughequityparticipations.Returnsaredistributedtoallpartnersorreinvestedinthefund.Asof2019,therewerenearly1700governmentguidancefunds,managingoverCNY4.1trillion(USD650billion)andaimingtoinvestoverCNY10.1trillion(USD1.6.trillion)overtime.AsmallnumberofthemaccountforalargeshareoftotalIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE54activity.In2019,therewere18guidancefundscreatedbetween2014and2018accountingforaboutCNY3.0trillion(USD470billion)infundingtargets–athirdofthegovernment’soveralltarget.SomeofthelargestfundsincludetheChinaState-ownedEnterpriseStructuralAdjustmentFund,whichtargetsoverCNY350billion(USD55billion)andhasinvestedinoilandgasandpowerprojects,andtheYangtzeRiverEconomicBeltEcologicalFund,whichtargetsoverCNY300billion(USD50billion)ofinvestmentsovertime.Somefundsfocusonspecificsegmentsoftheeconomy,suchastheState-ownedEnterpriseGuochuangInvestmentGuidanceFund,whichtargetsCNY150billion(USD25billion)ofinvestmentsprimarilyinaerospace,nuclearenergy,shipbuilding,high-speedrail,equipmentforpowerandgrids,cleanenergy,newenergyvehicles,andotherhigh-techfields.Althoughmanyoftheguidancefundsdonotinvestinstart-upsspecifically,anincreasingnumberhavebeenfocusingoninnovative,early-tomid-stagecompaniesinrecentyears.TheNationalEmergingIndustryVentureCapitalGuidanceFundwasestablishedin2015undertheNDRCwiththreefundsmanagedseparately,andtargetsaggregateinvestmentsofCNY40billion(USD6.5billion).MOST,theMinistryofFinanceandtheChineseAcademyofSciencesoverseetheNationalScienceandTechnologyAchievementTransferandTransformationFund,whichholdsover30VCsub-fundswithtargetinvestmentsofCNY25billion(USD4billion).TheState-ownedAssetsSupervisionandAdministrationCommissionmanagestheChinaState-OwnedCapitalVentureCapitalFund,whichtargetsCNY200billion(USD30billion).MIITmanagestheNationalSMEDevelopmentFund,whichtargetsCNY60billion(USD9.5billion)forseedandgrowthstagesofstart-upsandSMEs.Aheadofthe14thFYPperiodin2020,theMinistryofFinancereformedthemechanismtoaddressinefficienciesidentifiedinthe13thFYPperiod,suchasrisksofduplicationacrossdifferentfunds,idlefundsandfragmentationofresources.Thenewguidelinesnotablytightenconditionstoaccessgovernmentfundsincaseoflowperformanceandrequireclearerexpectationsintermsofexitstrategies(e.g.duration,terminationclauses).Theyalsoembedmorerigoroustrackingandreportingofperformancewithquantitativeindicators.China’sstart-upecosystemhasbeenburgeoningacrossallsectorsoftheeconomy,particularlysincearound2015.Pitchbookdatasuggestthatin2020,ChineseVC-backedcompaniesraisednearlyUSD60billionintotal,recoveringwellfrom2019andreachingthesecond-highestpointthisdecade.UrbantechhubssuchasBeijing,ShanghaiandHangzhouaccountformuchofthegrowthsince2015.Takentogether,thethreecitiesarehometo75%ofChineseunicorns,start-upswithavalueofoverUSD1billion.Consumergoods,manufacturing,andinformationandcommunicationtechnology(ICT)aresectorswithhighestactivityrecordedtodate.In2020,healthwasalsoontherise–theonlysectorwheregrowthwasrecordedfrom2019.However,IEAestimatesbasedonCrunchbaseIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE55datasuggestthatenergy(6%incumulativeinvestmentsover2019-2020)andtransport(2%)generallyattractlessearly-stagefunding.Officialdatashowthatenergyin2019attractedasmuchVCassemiconductorsormedicineandhealth.Sectoraldistributionofearly-stageventurecapitalinvestmentsinChinesestart-upsin2019and2020IEA.Allrightsreserved.Notes:Includesangel,pre-seed,seed,seriesAandBfinancingrounds.Investmentsin2019and2020arecumulative,byprimaryfieldofcompanyactivity.Source:IEAanalysisbasedonCrunchbasedata.LargedealsinEVstart-upsdominateChina’senergyVCInChina,overallcleanenergyVCactivity–focusingonearly-stagedealssuchasseed,seriesAandBfinancingrounds–remainedlowuntil2010-2011,wheninvestmentsincleantechnologystart-upsincreased.In2012andsubsequentyears,thebubbleburstinChinaasinotherareasoftheworld.However,cleanenergyVCinvestmentsrecoveredinChinafrom2015onwardsinanearlierwavethaninothercountriesorregions,ledbydomesticinvestorsandnotablywithaseriesofverybigearly-stagedealsofaboveUSD150millioninasinglefinancinground.While2019hadbeensetforapromisingtrendintermsofvolumeandsectoraldiversity,theCovid-19pandemicslowedprogressdown.In2020,investmentsfelldrasticallyandChinafaredworsethanotherregions.Thereappearstohavebeenaquickrecoveryin2021,particularlyintransportation,energystorageandbatteries,hydrogenandfuelcells,andrenewables.Between2015and2020,acumulativeUSD10billionwereinvested,aggregatingto33%ofglobalearly-stagefinancingroundsagainst40%inNorthAmericaand17%inEurope,andverybigdealsaccountedformostoftheseinvestments.Thetypicalearly-stagedealsizewitnessedinChinainrecentyearsmayindicateadifferentapproachtoseedandseriesA-Bfinancingrelativetoothercountries.BothpublicandprivateinvestorsinChinaappearpreparedtoinvestmorecapitalfaster–andtakeonmoreriskasaresult–foraquickanddirectscale-up,30%18%17%17%6%3%2%2%2%3%Consumergoods,mediaandentertainmentHealthandbiotechnologyManufacturingInformationandcommunicationstechnologyEnergyFinanceAgricultureandfoodTransportEducationOtherIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE56includingininstanceswheretherearealreadyexistingVC-backeddomesticcompetitors,suchasinelectricmobility.China’senergyVCecosystemhaschannelledmostfundingtocompaniesdevelopinglow-carbontransporttechnologiessuchasEVsandcharging.TheimportanceofEVtechnologiesrelativetootherareas(e.g.renewables,energyefficiency,storageandhydrogen)mayreflecttheconfidenceofinvestorsinthemarketprospectsforEVsinChinaandglobally,andintheabilityofChinesecompaniestoscaleupandpenetrateglobalmarketsfasterthanthecompetition.Between2016and2021,aseriesofVCmega-dealstookplaceinChina’selectricmobilitysector.Together,asmallgroupofnineEVtechnologystart-upsallfoundedsince2014successfullyraisedoverUSD15billionovertheperiod,fromearly-stageinvestmentsuptoinitialpublicoffering(IPO)andfollow-onfinancing.Years2016and2018wereparticularlyactive,andwhileappetiteforlargeearly-stageinvestmentsappearstohavedriedupby2020,growth-stagefinancingremainsstrong.Forexample,XpengMotorslistedonthestockexchangeintheUnitedStates,raisingUSD1.5billion;EnovateMotorsannouncedpre-IPOfinancingofoverUSD700million;andWMMotorraisedUSD1.5billioningrowthequityfollowedbyUSD2billionindebt.In2021,batteryinnovatorandmanufacturerSvolt,aspin-offofChineseautomobilemanufacturerGreatWallMotors,alsoraisedoverUSD3billion,illustratingtheprogressivedevelopmentofanEVandassociatedcomponentsecosysteminChina.CompaniestypicallyreportedusingthefirstroundsoffinancingfortechnologyR&Dandproductdevelopmentandtosetupfactoriesandmanufacturinglines,andsubsequentfundingforscale-up,marketexpansionandtosetupEVindustryinvestmentfundsinsomeinstances.ElectricmobilitynowaccountsforagreatershareofChina’sstart-upshavingreachedunicornstatus,whichreferstoavaluationoverUSD1billion.In2020,EVtechnologystart-upsaccountedfor6%ofthese,equaltotheshareofothertransportstart-ups.Thistrendisnotablefortheenergysector,whichtypicallygeneratesfewstart-upsreachingsuchvaluations,especiallyinonlyafewyears.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE57Early-stageventurecapitalinvestmentsinenergystart-upsinChina,bytechnologyarea(2010-2020)IEA.Allrightsreserved.Notes:Includesseed,seriesAandB.“Energystorage”mostlyincludesbatterymanufacturersforEVs.Source:IEAanalysisbasedonCleantechGroupi3database.VenturecapitalinvestmentsinselectedChineseelectricmobilitystart-ups(2010-2021)IEA.Allrightsreserved.Source:IEAanalysisbasedonCleantechGroupi3database.PublicsupportwasinstrumentalinbringingtheselectedEVcompaniestoindustrialscaleinjustafewyears.ThegovernmenttypicallyprovidedfinancialsupportthroughtheinvestmentbranchesoflargeSOEsintheautomotive,mining,powerequipmentorotherenergy-relevantindustries,aswellaspublicinvestmentfundsatnationalandsubnationallevels.Somestart-upsalsobenefitedfromuniversity-levelsupportandfunding,suchasthroughTsinghuaUniversityHoldings.Inmanycases,localgovernmentattheprovincialandcitylevelsplayedanactiveroleinbuildingR&Dinfrastructureandmanufacturingcapabilitytosupportindustrialdevelopment,inadditiontoprovidingdirectfinancialsupport.0100200300400500201020122014201620182020USD(2019)millionEnergyefficiencyRenewablesHydrogenandfuelcellsFossilfuelsOtherlow-carbonTransportandenergystorage010002000300040005000201020122014201620182020051015201620172018201920202021USD(2019)billionCHJAutomotiveBytonSingulatoYouxiaMotorsEnovateMotorsHozonAutomobileLeapMotorWMMotorXpengMotorsIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE58Officialdatashowthatin2019,SOEsaccountedforabout15%ofVCinvestments,aboutasmuchasgovernment-ledfunds.Meanwhile,privatecompaniesinindustrysegmentsrelevanttoEVs(e.g.ContemporaryAmperexTechnologyCo.Limited[CATL])andnon-traditionalenergyactors(e.g.Alibaba,Baidu,Foxconn,TencentTechnology)alsoprovidedfunding.China’sstart-upecosystemhassuccessfullybuiltseverallargeEVstart-upsfromthegroundupinamatterofyears.ThesesuccessstoriesopensignificantopportunitiestopositionthecountryinglobalsupplychainsforEVs,andcouldprovideatemplateforotherlow-carbonenergytechnologies.Thenumberofpublicactorsinvolvedillustratesthegovernment’spushtodeveloptheEVindustry.Relativetoothercountries,China’sgovernmentbodiesandSOEs(includingwithprovincialcompetition)aresignificantlymoreinvolvedincleanenergyVC.However,thereareconcernsthatthewideavailabilityofcheapfinance,especiallythroughstate-backedVCand“guidancefunds”,couldleadtoover-valuations,preventingsmallerprivateactorsfromtakingpartandincreasingrisksofbust.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE59Selectionofnotablepublicsectorsupporttoelectricmobilitystart-upsinChinaCompanySelectedpublicsupportandinvestments(incl.SOEs)Xiaopeng(Xpeng)MotorsGuangzhou,2014•Local:GuangzhouRuralCommercialBank•National:ChinaInternationalCapitalCorporation,AgriculturalBankofChina,BankofChina,ChinaConstructionBank,ChinaCITICBank•International:Mubadala(AbuDhabi),QatarInvestmentAuthorityLeapMotorHangzhou,2015•Local:ShanghaiElectricGroup(powerindustry),IndustrialSecuritiesCo.(Fujianprovince),HefeiCityBytonNanjing,2016•National:TsinghuaUniversityHoldings,FAWGroup(carcompany)WMMotorShanghai,2016•National:ChinaStructuralReformFund,StateDevelopmentandInvestmentCorporation,SAICMotorCorporation(carcompany),ChinaMinmetalsCorporation(miningcompany),TsinghuaHoldingsviaTsinghuaUnigroup,IndustrialandCommercialBankofChina,ChinaConstructionBank•Regional:YangtzeRiverIndustryFund(Hubei),GuangzhouFinanceHoldingsGroup•Local:ShanghaiPudongDevelopmentBankSingulatoShanghai,2016•Local:TonglingMunicipalCityInvestmentFund,SuzhougovernmentCHJAutomotiveBeijing,2015•National:ShougangGroupFund(steelcompany)YouxiaMotorsShanghai,2014•Local:QianhaiEquityExchange(supervisedbylocalgovernment)•Regional:HuzhouWuxingSouthTaihuLakeConstructionInvestment•National:ChinaEnvironmentalProtectionIndustryCorporationEnovateMotors(exDearCC)Shanghai,2015•Local:ShanghaiElectricGroup(powerindustry),andundisclosedlocalgovernmentindustryfunds•National:StateGrid(industry),andundisclosedstate-ownedbanksHezhongAutomobileTongxiang,2014•Local:BeijingSynohitec(hydrogencompany),ZhejiangYangtzeDeltaRegionInstituteofTsinghuaUniversity(Jiaxing)•National:UndisclosedgovernmentindustryfundSource:IEAanalysisbasedonCleantechGroupi3database.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE60TalentsandhumancapitalMetricsrelatingtoChina’seducationandtraining,andavailabilityofR&Dpersonnelhavesignificantlyimprovedinthelasttwodecades.Forexample,officialdatashowthatbetween2005and2019,theproportionof20-to34-year-oldChinesegraduatinginscientificandengineeringfieldsatcollegelevelorabovehasmorethandoubled,andthenumberoffull-timeR&Dpersonnelper10000inhabitantsmorethantripled.Althoughthisgoesbeyondthescopeofenergy,thenumberofR&DpersonnelinChinaisgreaterthaninanyothercountryandcontinuestoincrease.WhilethepercapitanumberofR&Dpersonnelremainsweakerthaninothermajorinnovatingcountries,thegapisnarrowing.In2019,over75%ofthecountry’stotalR&Dpersonnelwereemployedinenterprises,againstabout20%inresearchinstitutesandacademia.About45%ofR&Dpersonnelareresearchers,ofwhichnearly80%workonexperimentaldevelopment(generallyconcentratedinenterprises)against12%inappliedresearchand8%inbasicresearch(generallyinresearchinstitutesoracademia).In2021,PresidentXisharedChina’splanstobecomea“globaltalenthighland”asthecountrytodayfacesfierce“talentandeducationcompetition”.Expectationsforthe14thFYPincludestrongerpolicysupporttofosterhumancapitaldevelopment;developinnovativetalents;traingraduates,researchers,engineersandtechnicians;andreformexistingtalentevaluationmechanisms.Specificguidelinesareincludedinadedicatedchapterinthe14thFYPto“Stimulatetalent'sinnovationandvitality”.Theseareacontinuationofguidingprinciplesfromthepreviousperiod.In2019,theNDRCissuedpolicyguidelinesforBuildingaMarket-OrientedGreenTechnologicalInnovationSystem,incollaborationwithMOSTandtheMinistryofEducation.Theseaimedtodevelop“greentechnologyinnovationtalents”,andimprovedhiring,employmentandcareeropportunitiesforR&Dpersonnelandinnovators.Chinahasputinplaceavarietyoftalentmanagementplansatthenationallevel.Intheearly2000s,thegovernmentputforwardtheNationalTalentBuildingPlan(2002-2005),afirst-of-its-kindprogrammetofosterdomestictalentsandincreasefocusonhumanresources.In2010,afteryearsofexpertconsultations,itapprovedthemoreambitiousNationalMedium-andLong-TermTalentDevelopmentPlan(2010-2020).Theplanintendedtoattract,trainandretaintalentsinindustrysegmentsincludingequipmentmanufacturing,ICT,biotechnology,newmaterials,environmentalprotection,energyresourcesandtransportation.ItinvolvedrampingupdomestictrainingcapacityaswellasattractingChinesenationalstrainedabroadandforeignindividuals.Thesameyear,thegovernmentissuedawhitepaperonthecountry’shumanresourcessituation,whichnotedimprovementsinrecentyearsbutidentifiedaremaining“lackofhigh-levelinnovativetalents”domestically.Thenoticenotablyemphasisedtheimportanceofstrengtheningeducationsystemsaswellasencouraginginternationalexchangesandco-operation.IEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE61Aspartofitsoverarchingstrategy,Chinaputinplacespecificmechanismstoattractforeigntalents.TheThousandTalentsProgrammeinvolvedidentifyingandattractinggraduates,experts,professors,innovatorsandentrepreneursinhigh-techareasandotherhigh-profiletalentstocomeworkinChinathroughincentivesandfinancialsupport(e.g.easiervisaprocedures,medicalcare,socialinsurance,taxdeductions).Thegovernmentseteligibilityconditionstoensurethesewouldhelpachievenationalscienceandtechnologypriorities.Inits2019noticeoftheNationalHigh-EndForeignExpertRecruitmentPlan,MOSTidentified“industrialtechnologyinnovation”and“greendevelopment”askeyareas.Provincialandlocalgovernmentarealsoencouragedtotakepart.In2012,togetherwithmorethantenotherministries,MOSTlaunchedtheNationalSpecialSupportPlanforHigh-LevelTalents,alsoknownastheTenThousandTalentsPlan,whichaimstoselect10000talentsinthefieldsofnaturalsciences,engineering,technology,andphilosophyandsocialsciencesovertenyears,andtoprovidespecialsupportincludingfundingorincentives.Theplanfleshedoutthreelevelsoftalents,includingonefor2000youngertalentsagedbelow35,andanotherfor100talents“attheforefrontofworldscienceandtechnology”.Inpractice,variousagencies,ministries,universitiesandlocalgovernmentcontributetoimplementingthesehigh-levelplans.Forexample,theChineseAcademyofScienceshasputinplacevariousfellowshipinitiativesforinternationalscientificexchangesandresearchco-operation,suchasthePresident’sInternationalFellowshipInitiative,includingwithotheremergingmarketcountries.Researchteamsandapplicantscanfillinsubmissionsthatarereviewedbygovernmentofficials.TheMinistryofEducation,theMinistryofHumanResourcesandSocialSecurity,anduniversitiesimplementtheSupportProgrammeforInnovativePostdoctoralResearchers.Thetopfiveuniversitiesreceivingmostsupportoverthe13thFYPperiod(2016-2020)wereTsinghuaUniversity,PekingUniversity,ShanghaiJiaotongUniversity,UniversityofScienceandTechnologyofChina,andFudanUniversity.Atthesubnationallevel,regionsandcitiesimplementnationalplansbyguidingandsupportinglocalcandidates.Newprogrammestailoredtolocalneedsmayalsobeinplace.In2017,forexample,PresidentXisharedanewvisionforShanxiprovince,oneofChina’slargestcoalprovinces,tobecomeacoreactorofthecountry’senergyrevolutionandapilotzonefortheenergytransition.InNovember2019,theShanxiProvincialDepartmentofHumanResourcesandSocialSecurityissuedanUrgentlyNeededTalentsCatalogueintheEnergySectortohelpachievethisvision,openingover250positionsforhighlyinnovativetalentstotakeonresponsibilitiesintheprovince’senergyactivities.Theplanfocusedon16keytechnologyareasincluding:solarandwind,bioenergy,internetandsmartenergy,saferandmoreefficientcoalmining,coal-to-chemicalsproduction,high-endmanufacturingequipment,newenergyvehicles,andaluminiumprocessing.Amongtheopenpositions,35%wereearmarkedforcoal-relatedactivitiessuchasmining,chemicalsproductionandIEA.Allrightsreserved.TrackingCleanEnergyInnovationResourcesforenergyinnovationFocusonChinaPAGE62coal-firedpowergenerationupgrading.Therewerealsomentionsofinternationalco-operation,notablyundertheBeltandRoadInitiative.ShanghaihasputinplacetheShanghaiPujiangTalentPlanforinnovatorsundertheageof50andteamswillingtoworkinthecity,withincentivestorelocate.FinancialsupportmaygouptoCNY300000perindividualorCNY500000perteam.Theplanisdividedintofourcategories:R&D,enterpriseinnovationandentrepreneurship,socialsciences,and“specialurgentneeds”basedonlocalgovernmentpriorities.ThecityalsorunsbasicresearchprojectsunderitsScienceandTechnologyInnovationActionPlan,withsupportforacademics.WithinSOEs,talentsareidentifiedbyseniormanagementandgivenopportunitiestorotateamongmultipledepartments,getfamiliarwiththebroaderorganisationanditsvariousfunctions,andreceiveguidancefromleadership.SOEsalsoregularlyopencallstohiretalentsglobally.Forexample,in2020SinopecGrouplaunchedahigh-leveltalentrecruitmentprogrammefocusingonoilandgasandpetrochemicals.Individualswhorecommendedsuchtalentstothecompanywouldalsobefinanciallyrewarded.TalentstypicallybenefitfrominternalsupportintermsofcareerdevelopmentandfundingforR&Dactivitiesinstrategicfields.Incertainsectorsofstrategicinterest,Chinahasputinplacededicatedtalentdevelopmentplans.Inthenuclearsector,forexample,theNEA,theMinistryofEducationandTsinghuaUniversitylaunchedin2017theInternationalNuclearPowerTalentTrainingAgreement,withstate-ownedChinaNationalNuclearCorporation,StatePowerInvestmentCorporationandChinaGeneralNuclearPowerGroup.TheinitiativeaimstotraintalentstoprepareforChina’snuclearexpansionaspartofthe“goingout”strategyfocusingoncountriesundertheBeltandRoadInitiative.Thelauncheventwasattendedbyover100representatives,includingfromthefollowingcountries:Cambodia,theCzechRepublic,Egypt,Indonesia,Iran,Kazakhstan,Laos,Pakistan,Poland,SouthAfrica,Sudan,Tunisia,Turkey,UkraineandtheUnitedKingdom.Thefirstcohortoffellowsgraduatedin2019.In2018,Xi’anJiaotongUniversityandHongKongPolytechnicUniversityestablishedtheSilkRoadInstituteofEngineering–undertheframeworkoftheSilkRoadUniversityAlliance–tofosterregionalco-operationandcontributetotalentsdevelopment.In2019,theinstitutelaunchedtheBeltandRoadAdvancedProfessionalDevelopmentProgrammeinPowerandEnergy,incollaborationwithstate-ownedStateGridTechnologyInstituteandHongKongElectric.Thethree-yearprogrammefocusesonseniormanagers,executivesandresearchersandofferstwo-weektrainingswithexperttrainingandfieldtripsinvariousregions.Typicalfocusareasincludeultra-high-voltagetransmission,smartgridsandcityinfrastructure.Sofar,theprogrammehasgatheredparticipantsfromovertencountriesalongtheSilkRoadandbeyond,includingBrazil,Kazakhstan,Malaysia,Nepal,thePhilippines,RussianFederation,TanzaniaandThailand.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE63KnowledgemanagementandnetworksIntroductionThissectiontracksrecentinnovationoutputmetricsforChina’sresearchinstitutesanduniversities(e.g.academicpublications,patents),andprovidesinsightsrelatingtoChina’sstrategiestodevelopandacquireknowledge,andfostercollaborationamonginnovationactorsdomesticallyandinternationally.KeytakeawaysChina’sresearchinstitutesanduniversitiesrankamongthemostprolificgloballyinacademicpublishinginphysicalsciencesandengineeringaswellasfornewenergytechnologies.Thenumberofhighlycitedpublicationsisincreasing,suggestingqualityimprovementsandbroadervisibility.InadditiontoitslargedomesticR&Dprogrammes,China’sinnovationstrategyinvolvesacquiringandimportingknowledgesuchasthroughjointventureswithforeignmultinationalsandtheacquisitionoffirms,R&Dandtechnologycentres.Tostrengthenitsroleasaknowledgecreator,Chinahasalsoputemphasisonindigenoustechnologyinnovation,improvedIPregimesandsetincentivestofilepatents.However,thereremaindisputesaboutIPmalpracticewithtradingpartners,aswellasconcernsthat“strategicpatenting”drivenbyincentivesunderminetheaveragequalityofpatents.Inthelastdecades,China’snationalknowledgeecosystemhastransitionedfromastate-directedmodeltowardsmorecollaborativeinteractionsamongstate,academiaandindustry.However,science-industrylinksstilllagbehind.Engagementwiththeinternationalcommunityandmultilateralplatformsforenergyinnovation–suchastheIEATechnologyCollaborationProgrammesandMissionInnovation–hasincreasedinthelast30years,witheffortstoimprovetrustandmakepartnershipssustainable.However,high-levelengagementdoesnotimmediatelytranslateintoactivecollaboration.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE64ChineseresearchinstitutesanduniversitiesontheglobalstagePublicresearchinstitutionsanduniversitieshavehistoricallyplayedaprominentroleinknowledgecreationinChina,andalthoughtheroleofenterpriseshasstrengthenedinthelastdecade,thisisstillthecasetoday.ChineseinstitutionssuchastheChineseAcademyofSciencesandhigh-profileuniversitieshavealsosignificantlyincreasedtheirpresenceontheinternationalstage,suchasthroughscientificpublicationsandpatents.In2021,ChinatoppedNatureIndexrankings,whichcounthigh-qualityresearchoutputsin82naturalsciencesjournalsselectedonreputation.TheChineseAcademyofSciencesscoredmuchhigherthanothergovernmentinstitutions,withanumberofresearchoutputsaggregatingtomorethantheFrenchNationalCentreforScientificResearch,theNationalInstitutesofHealthandLawrenceBerkeleyNationalLaboratoryintheUnitedStates,andtheSpanishNationalResearchCouncilcombined.Inchemistry,sevenChineseinstitutionsfigureinthetopten;fourinearthandenvironmentalsciences;andtwoinphysicalsciences.DataalsoshowthatChineseinstitutionsdisplayfastestannualgrowthrates.In2019,threeofthetopfiveuniversitiesforpatentapplicationsunderthePatentCooperationTreaty–theinternationalprocessforfilingpatents–werebasedinChina(TsinghuaUniversity,ShenzhenUniversityandtheSouthChinaUniversityofTechnology),theothertwobeingintheUnitedStates(UniversityofCaliforniaandMassachusettsInstituteofTechnology).Inthetop50,20werelocatedintheUnitedStatesand14inChina.Whileenergy-specificdataarenotsystematicallyavailableandpublishedforacademicpublications,dataforphysicalsciencesandengineeringshowthatChineseuniversitieshavebeenpublishinginpeer-reviewedjournalsmorethananyothercountryinrecentyears.IEAanalysissuggeststhatoverthe2016-2019period,Chinaaccountedforathirdoftheworld’spublicationsinsuchfields,morethanEurope(24%),theUnitedStates(13%),JapanandKorea(each4%).In2021,theChineseAcademyofSciencespublishedananalysisofopportunitiesandchallengesfornewenergytechnologyresearch,incollaborationwithSpringerNature,basedonenergy-specificbibliometricanalysisandpatents.Thestudyprimarilyexaminessolar,wind,biomass,geothermal,nuclear,hydrogen,energystorageandenergyinternettechnologies.ItshowsthatChinaaccountedforover25%ofglobalpublicationsintheseareasoverthe2015-2019period,upto45%forenergystorage,30%forhydrogen,and25%forsolar.Intheselectedfields,thecompoundannualgrowthrateovertheperiodwas7.7%,upto13.1%forenergystorage,10.0%forgeothermaland9.5%forhydrogen–andtherearesignsthatgrowthratesareincreasing.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE65Shareofglobalpublishinginphysicalsciencesandengineeringinselectedcountriesorregionsoverthe2016-2019periodIEA.Allrightsreserved.Notes:Mostlycitedacademicpublicationsinphysicalsciencesandengineeringintheirrespectivefieldandyear.EuropeincludesEuropeanUnionmembercountriesaswellastheUnitedKingdom,NorwayandSwitzerland.Source:IEAanalysisbasedonLeidenRankingdata.IfChineseuniversitiesaretheworld’smostprolificinstitutionsforscientificpublications,manystilllagbehindintermsofcitations–oftenusedasaproxyforimpact.Overall,Chinaaccountsforasmallershareoftheworld’smostlycitedpublicationsinphysicalsciencesandengineering.Specifically,Chineseuniversitiespublished29%oftheworld’stop1%mostfrequentlycitedpublications(inagivenfieldandyear),whichislessthantheir33%shareofallpublications.Incontrast,Europe(26%)andtheUnitedStates(23%)accountedforagreatershareofmostlycitedpublicationsthanofallpublications,suggestinggreaterqualityorvisibility.TsinghuaUniversitytoppedglobalrankingsbypublishingmorepapersinphysicalsciencesandengineeringthanHarvardUniversity,StanfordUniversityandtheMassachusettsInstituteofTechnologycombinedoverthe2016-2019period.Yetonly1.7%ofthesepublicationsrankedamongtheworld’stop1%mostlycitedintheirfieldandyear,farbehindAmericanpeers(4.4%forHarvard,3.9%forStanfordand3.7%forMIT).Similarly,theenergy-specificanalysisbytheChineseAcademyofSciencesandSpringerNatureshowsthatChina’saveragecitationperpaperlagsbehindthatoftheUnitedStates,GermanyandJapan,andconcludesthatthe“overallimpactofresearchoutputneedstobefurtherimproved”.YetChinesepapersfarebetterthantheglobalaverageintermsofcitationsineachofthemainenergytechnologyareasexaminedinthestudy,ledbysolar,hydrogenandbioenergy.Incertainareas,theyevenaccountforanotableshareofthetop1%mostlycitedpublications,suchasforsolarfuel(4.5%),hydrogenproduction(3.1%),batterystorage(2.3%),solarPV(2.2%)andfuelcells(1.3%).ThestudyconcludesthatthesetechnologieshavepromisingprospectsinChina.0%10%20%30%ChinaEuropeUnitedStatesAustraliaCanadaKoreaJapanIndiaBrazilShareofworldTop1%mostlycitedTop10%mostlycitedAllpublicationsIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE66Qualityhasbeensteadilyimprovinginthelastdecade,suggestingthatChineseacademicsarehavinggreaterimpactandtheirworkisbenefitingfrommorevisibility.Overthe2006-2009period,Chinaaccountedforonly8%oftheworld’stop1%mostlycitedpublicationsofphysicalsciencesandengineeringintheirfieldandyear,andonly0.6%ofChinesepublicationsmadeittosuchstatus.Overthe2016-2019period,Chinaaccountedfor29%oftheworld’smostlycitedpublications,and1.0%ofChinesepublicationsmadeittosuchstatus.CollaborativelearningthroughjointventuresandR&DcentresabroadAspartofitssocio-economicdevelopmentpush,ChinahasbeenactivelypursuingstrategiestoacquireIPandconceptsfromabroadtoaccelerateequipmentupgradingandfosterdomestictechnologydevelopment.Theseincludesettingupcollaborativepartnershipswithinternationalpeers,embeddinginformationsharingandIPtransfersinindustryjointventuresagreements,andacquiringforeigncompaniesandR&Dcentres.Overtime,knowledgetransfersandcollaborativelearning-by-doingcanspilloverintoChina’sinnovationsystem,contributetoenhancingdomesticinnovation,andleadlocalinventorsandfirmstodevelophome-grownconceptsandtechnologies.Forexample,innuclearpower,ChinasuccessfullybuiltreactorsbasedontwoforeigndesignsimportedfromFranceandtheUnitedStatesundertechnologytransferagreementsbeforedevelopinganindigenousonefordomesticuseandexports.Afterimportinghigh-speedtrainmodels,Chinadevelopeditsown,anditisreadyforexports.Solar,windandhydropowerareexamplesofrenewableenergytechnologiesforwhichChinahasimprovedindigenousinnovationcapabilitiesinthelasttwodecades,whereasithistoricallyreliedonNorth-Southtechnologytransferandco-operationschemes.JointventuresbetweenaChineseandforeignactorareameanstotransferandco-developknowledgeandtechnology.Inpractice,foreignmultinationalsseekingtoenterChina’smarket,suchasforlocalexpansionorexport-orientedmanufacturing,aretoenterintopartnershipwithChinesefirmswiththeviewtohelpthesebuildcapacity,basedontheJointVentureLawpromulgatedin1979aspartofthecountry’smodernisationprogramme.TheNDRCnotablypublishesandupdatesaCatalogueofIndustriesforGuidingForeignInvestment,whichisaguidingdocumentlistingtheindustrysegmentsforwhichinvestmentisencouraged,orconverselyrestrictedorprohibited.Foreigninvestmentprojectsonthelistofencouragedindustriescanbenefitfrompreferentialtreatmentincludingland,taxationandotheradministrativeregulations.Somemeasuresmaybespecifictocertainregionsandprovinces.Restrictivemeasureshavesteadilydecreasedovertime–from180inthe2011editionto93in2015and63in2017–andin2020,thecatalogueincluded1235entriesacrossIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE67allsectorsoftheeconomy,against1108entriesin2019.Explorationanddevelopmentofoilandnaturalgaswaslimitedtoequityorco-operativejointventuresuntil2019,whenitwasopenedtowhollyforeign-ownedenterprises.Newenergyvehicles,hydrogenproduction,storageandtransportation,andcarboncapturewerealsoaddedthatyear.Whilemanyenergysegmentshaveprogressivelybecomepartofthelistofencouragedindustries,foreignactorsstillregularlysetupjointventurestoentertheChinesemarket,especiallyininstanceswheredomesticplayersbenefitfromnear-monopolypositions.In2013,forexample,SiemensformedajointventurewithShanghaiElectrictoproduceoffshorewindturbinesinJiangsuprovince,althoughtheindustrywasalreadyopentoinvestmentsbywhollyforeign-ownedenterprises.In2018,alicensingagreementenabledShanghaiElectrictomanufacture,sellandinstallSiemensGamesa’s8MWhigh-techturbines.In2020,VolkswagenincreaseditsstakesinajointventurewithcarandtruckmakerJianghuaiAutomobile(JAC)tocontrol75%oftheventure,whichwasestablishedin2017,followingtherelaxationofrulesrelatingtoforeigninvestmentsinChinesefirms.Volkswagen’sothernotableventuresarewithSAICMotor(inwhichitholds50%ofequity)andwithFAW(40%),whichdatebacktothe1980sandenabledVolkswagentobecomethemostsuccessfulforeigncarmakerinChina.In2021,VolkswagenannouncedintentionstoincreaseitsstakesinChineseventuresagain,notablytoreapgreaterprofitsaspartofitsEVdevelopmentstrategy.ThelargesizeofChina’sdomesticmarkethasallowedthecountrytosetincentivesformultinationalstomanufacturetechnologiesinChina(e.g.cheapmanufacturingcosts)andembedIPandtechnologytransferclauseswithinjointventureagreements–whichisnotusuallythepurposeofsuchpartnerships.Throughjointventures,significantknowledgetransfershaveoccurredovertime.Someofthecountry’sdomesticlabsandresearchfacilitieshaveinfactbeensetupbyforeignactors.GeneralMotors,forexample,startedformingjointventureswithChinesefirmsin1997,suchaswithautomotivemajorSAICMotortoday.In2009,GeneralMotorssetupaChinaScienceLabinShanghaitocarryoutlocalinnovationactivities.In2019,thelabreceiveditssecondR&D100Awardsinceitscreation,fornewcapacitor-assistedbatterytechnology.AspartofitsjointventurewithJAC,VolkswagenopenedanR&DcentreinHefeiin2020withaimstodeveloplocaltechnologyinnovationcapabilities.Inparallel,ChinesecompanieshavebeenactivelyinvestinginenergycompaniesandR&Dcentresabroad,suchasintheUnitedStatesandEurope.BuildingoracquiringinnovationcapabilitiesabroadenablesChinatogeneratenewknowledgebytappingintoabroaderpooloftalentsandinnovators,fosterpersonnelmobility,transferconceptsandtechnologiesbacktoChina,andexpandintooverseasmarkets.Forexample,windturbinemanufacturerEnvisionEnergylocateditsGlobalInnovationCentreinDenmarkin2010andfiledallinternationalpatentapplicationsbytheDanishentity.In2019,batterymanufacturerCATLinvestedaboutUSD2billioninitsGermany-basedR&Dandproductioncentre.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE68ReformstointellectualpropertyregimesAddressingconcernsof“strategicpatenting”AlongsideincreasingspendingonenergyR&D,buildingindustrychampions,andinvestinginuniversitiesandresearchinstitutes,ChinahasimplementedtargetedIPpoliciestopromotethecreationandprotectionofnewindigenousknowledge.StrongerIPregimesandruleoflaw,aswellasmoreaccessibleandeffectiveproceduresthroughIPoffices,havecontributedtosupportChineseinventorsandrewardtheireffortstoinnovate.Theincreaseinenergypatentingactivityofthelastdecades,andparticularlyoverthe2000-2010period,illustratesChina’spushtobuildstocksofIP.However,analystsobservethatChina’ssurgeinpatentingactivityresultsnotonlyfromimprovementsinindigenousR&Dactivities,butalsofromleversthatareunrelatedtoinnovation.Non-innovationmotivesforacquiringpatentsincludepreferentialtaxtreatmentsandothersocio-economicincentivesviaamendmentstothepatentlaw,aswellasrequirementstomeetFYPobjectivesrelatingtothenumberofpatentsper10000inhabitants.“Strategicpatenting”mighthaveplayedanimportantroleinChina’spatentingactivityanddecreasedtheaveragequalityofpatents.Firmsthatwerenotactivelypatentinginthepast,whichaccountedformostofthegrowthinthelastdecades,hadagreaterpropensitytopursuenon-innovation-relatedpatenting.WhilethequantityofpatentsfiledbyChineseinventorshassignificantlyincreased,includinginternationalapplicationsthataretypicallyofhigherquality,researchshowsthatChina’spatentsarelesslikelytobecited,whichisanotherproxyforquality,impactandvisibility.InCCUS,comparativeanalysisbetweenChinaandtheUnitedStatesshowedthatalthoughpatentcountsweresimilarin2015,significantdisparitiesintermsofqualityremained,andCCUStechnologiesweremorematureintheUnitedStatesthaninChina.The14thFYPbringsincreasedfocusonCCUSasChinesepolicymakersseektobridgea“largegapwiththeinternationalcommunity”intheareaandstrengthensupportforR&Danddemonstration.Inwindpower,whileChinahasbecomeakeyplayerinproducinganddeployingwindenergytechnologies,Chinesepatentsarelesslikelytobecitedthanthoseofforeigncounterparts.Inrecentyears,studieshavenotedthattheoverallimpactofChinesepatentsisbecomingstronger,albeitunevenlyacrossthecountry,notingregionaldisparitiesintermsofpatentquality.ProvincessuchasShanghai,Hebei,Beijing,SichuanandShanxileadthewayrelativetootherregions,basedonmetricscoveringtechnological,legalandcommercialaspectsofpatenting.DespiteveryhighnumbersofpatentapplicationsandgoalsintheNationalPatentDevelopmentStrategy(2011-2020)toincreasepatenttransactionamounts,ChinaIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE69generateslessrevenuefromIPrightsthanotherinnovatingcountries.ChinaspentoverUSD180billiontopurchaseforeignIPrightsbetween2008and2017acrosstheeconomy,whereasChineseIPonlygeneratedaboutUSD10billion,mostofwhichoccurredin2017alone.Meanwhile,theUnitedStatesgeneratednearlyUSD130billioninIPrevenuesin2017,andJapanUSD40billion.TheChinesegovernmenthasidentifiedsomeofthesechallengesaspartofitseffortstoimproveboththequantityandqualityofnewknowledge.Effortstoimprovethegovernanceofpatentofficesandstrengthentheircapacity,expandevaluationmechanisms,aswellastoadjustincentivestomitigatenon-innovationstrategicpatenting,maycontributetoenhancingtheoverallqualityofChinesepatentsandnewdomesticknowledgemoregenerally.The14thFYPbringsadditionalfocusonimprovingthequalityofChina’shome-grownIP,technologicalself-relianceandstrengtheningIPregimes.In2021,thegovernmentissuedtheGuidelinesforBuildingaPowerfulCountrywithIntellectualPropertyRights(2021-2035)andthe14thFYPfortheProtectionandUtilisationofIntellectualPropertyRights(2021-2025),whichraisetheambitionrelativetoexistingplanstoachievethevisionofamoreinnovativeChina.Thegovernmentalsoannouncedaphase-outofpatentapplicationsubsidiesby2025.AligningIPprotectionwithinternationalpracticeChinahasputforwardanumberofreformstoitsIPandpatentsregulationssince1984,whentheywerefirstintroducedshortlyafterjoiningtheWorldIntellectualPropertyOrganization(WIPO).In2001,afterChinajoinedtheWorldTradeOrganization,effortsweremadetoaligndomesticIPpracticeswithinternationalstandards.In2008,ChinafleshedoutanOutlineofNationalIntellectualPropertyStrategy,whichelevatedIPintothenationalstrategytosupportthecountry’sobjectivetobecomemoreinnovative.Thestrategysetthegoalofreachingacomparativelyhighlevelof“creation,utilisation,protectionandadministration”ofIPrightsby2020.ImplementationplanswereputforwardintheNationalPatentDevelopmentStrategy(2011-2020),withintermediarygoalsfor2015(e.g.volumesofpatentapplications,patenttransactionamounts,speedofadministration).AdditionalpolicyplansincludedtheActionPlanforFurtherImplementationoftheNationalIntellectualProperty(2014-2020)andtheIntellectualPropertyJudicialProtectionProgramme(2016-2020).TheseplanshaveenabledChinatomakeprogressinaligningdomesticIPsystemswithinternationalgoodpractice.Startinginthe1980s,multinationalshavetypicallyleveragedChina’spatentsystemtoacquireastrategiccompetitiveadvantageinlocalmarkets,astheywouldinanycountry.However,China’suseofjointventuresandconditionalmarketaccesshasledtosometensionswithtradingpartnersduetoallegationsofIPmalpracticeincludingtheftorforcedtechnologytransfer,resultingindisputessuchasundertheWorldTradeOrganizationbetween2018and2021.In2019,China’scentralgovernmentputIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE70forwardareformofthelawonforeigninvestmentstoimproveIPmanagementinjointventuresandmitigateforcedtechnologytransfers.Specifically,thenewlawprohibitstheftofIPortradesecretsfromforeignpartners,andpreventsgovernmentofficialsfromusingadministrativemeasurestoforcesuchtransfers.Nevertheless,inthe2021editionofitsannualreviewofIPprotectionaroundtheworld,theUnitedStatesTradeRepresentativekeptChinaonthe“PriorityWatchList”alongsideArgentina,Chile,India,Indonesia,RussianFederation,SaudiArabia,UkraineandVenezuela.WhilenotingimprovementsinrecentyearsfollowinggovernmenteffortstostrengthenIPprotection,EUstakeholdersin2021similarlyreportedthat:“forcedtechnologytransferpracticescontinuetobeasystemicprobleminChina”.In2020,PresidentXireiteratedcommitmenttostrengtheningIPregimestotransitionfrom“amajorIPimportertoamajorIPcreator”.HealsomentionedtheimportanceofinternationalIPcollaboration,suchasthroughtheWIPO,withtheEuropeanPatentOffice,Japan,KoreaandtheUnitedStates,aswellasBeltandRoadcountriesandAfricanpartners.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE71DevelopmentsinChina’sintellectualpropertyenvironmentsince1980MechanismDescriptionAmendmentstopatentlawsandintellectualpropertyregimes•1980-1984:In1980,ChinajoinedtheWIPO,recognisingthevalueofintellectualassets,andpromulgateditsfirstPatentLawin1984.•1992-1993:Chinabroadenedtherangeofpatentablesubjects,extendedtheprotectionperiodfrom15to20years(from5to10yearsforutilitymodels),strengthenednoveltyrequirements,limitedthegrantingofcompulsorylicences,andgrantedindividualstherighttoownpatents.•2001:AspartofitsapplicationtotheWorldTradeOrganization,ChinaalignedIPrightswithinternationalstandardsundertheAgreementonTrade-RelatedAspectsofIntellectualPropertyRights.ThereformalsoestablishedequaltreatmentofSOEsandprivatefirmsforobtainingpatentrights.•2009:Chinaintroducedthe“absolutenovelty”standardtoimprovepatentquality.Priortothispivotalreform,theChinesePatentOfficelimitednoveltysearchtodomesticpriorart,insteadofglobalpriorart.Enforcementwasalsostrengthened.•2014-2015:Chinaaddressedconcernsrelatedtopatentinfringement(e.g.difficultytocollectevidence,burdensomeandcostlyprocedures,lowlevelofenforcementandawardeddamage).ThreespecialisedcourtswerecreatedinBeijing,ShanghaiandGuangzhou.Between2012and2016,averageawardeddamagesubsequentlyincreasedfromaboutUSD11000toUSD65000.•2019:TheEuropeanPatentOfficeandChineseIPofficestrengthenedtheirstrategicpartnershipandlaunchedacollaborativepilotprojecttofacilitateprotectioninEuropeforChineseapplicants.ThiswouldprovideadditionaloptionsforChina’sinternationalpatentingstrategies.•2020-2021:NewamendmentstoChina’spatentslawareconfirmedin2020,tobeeffectivestarting1June2021.ThechangesaimtofurtherstrengthenlawenforcementofIPrights,increaseinfringementpenalties,streamlinedisputeproceduresandeasecostsoflitigation.Basedonthecircumstances,courtsmayseekcompensationsrangingfromaboutUSD4500toUSD750000–upfromUSD1500toUSD150000previously.Policyincentivesandnon-innovationrelatedmotivestofilepatentapplications•Patentapplicationsubsidy.Localgovernmentmayrewardapplicationsand/orgrantsforapatentofinvention.Shanghai,forexample,offereduptoaboutUSD8000(CNY50000)forforeignpatentgrantsandUSD500(CNY2500)foraChinesepatent.Increasingthecompensationtocoverpatentapplicationfeesin2005encouragedpatentingactivityregardlessofunderlyinginnovationactivity,especiallywhenpatentingcostswerenotaconcern,assuggestedinthecaseofthecityofZhangjiagang.In2021,thegovernmentannouncedthatlookingforward,“localitiesshallnotprovidefinancialsupportforpatentapplicationsinanyformsuchassubsidies,rewards,etc.”,andthatallsuchsupportschemesshouldphaseoutby2025.•Preferentialtaxtreatment.Highandnewtechnologyenterprisesbenefitfromareducedcorporateincometaxrateof15%(downfrom25%),aswellascompaniesowningIPrightsdevelopedby“outstandinginvestorsandworkers”.In2019,NDRCguidelinesfurtherimprovedincomeandtaxpolicyconditionsforgreentechnologyinventorsandcreatedafasttrackforgreentechnologyintellectualpropertyreview.•Othersocio-economicincentives,suchasurbanhouseholdregistration,easieradmissiontoahigher-rankedschool,etc.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE72DomesticandinternationalcollaborationthroughknowledgenetworksCollaborationbetweeninnovationactorsisanimportantaspectofsuccessfulenergyinnovationsystems.Smoothflowsofknowledgeareneededamongresearchers,policymakersandmarketactorsfornewideastoreachconsumers.Governmentco-ordinationisnecessaryforeffectiveprioritysettingandresourceallocation.Engagingwithinternationalnetworksisalsocriticaltosupportdomesticefforts.Withouteffectiveinternationalcollaboration,globalenergytransitionstonetzeroemissionscouldbedelayedbydecades.Since2000,co-operationandknowledgeexchangehaveimprovedbothwithinthecountryandbetweenChinaandinternationalpartners.DomesticcollaborationforresearchandinnovationisgettingstrongerCo-publishingandco-patentingratesarestrong,especiallybetweenpublicinstitutionsDomestically,collaborationisvisiblebetweenChineseresearchorganisations,asillustratedbytheirhighpropensitytoco-publishscientificpapersorco-patent.Theshareofco-inventionsintotalinventionsforclimatechangemitigationtechnologiesincreasedfrom50%intheearly1990stoover75%inthelate2010s,withnearly85%ofthesecollaborationstakingplacewithinChina.ThistrendissimilartothatofEuropeasawhole(about50%to70%),Germany(50%to70%)andtheUnitedStates(55%to75%),andfasterthanthatofFrance(65%to70%)andtheUnitedKingdom(50%to60%).CountriessuchasIndia(70%to90%)andJapan(70%since1990)featureconsistentlyhighco-inventionrates.Furthermore,IEAanalysisofdatacoveringphysicalsciencesandengineeringpapersshowsthatover70%ofpublicationsbyChineseuniversitiesoverthe2016-2019periodwerepublishedincollaborationwithanotherinstitution.Ofthese,onlyabout20%wereco-publishedwithinstitutionslocatednearby(under100km).Thissuggeststhatthereareregularlong-distanceexchangesofknowledgeandcollaborativeprojectsacrosscitiesandregionswithinthecountry,andnotonlybetweeninstitutionsinthesamecity.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE73Co-patentingactivityinclimatechangemitigationtechnologiesrelevanttoenergyfieldsinaselectionofcountriesorregions(cumulative,1990-2019)IEA.Allrightsreserved.Notes:Energyreferstothegeneration,transmissionanddistributionofenergy.“Europe”includesEuropeanUnionmembercountries,Norway,SwitzerlandandtheUnitedKingdom.Source:IEAanalysisbasedonOECDdataoninnovationinenvironment-relatedtechnologies.However,public-privatecollaborationlagsbehindGovernment-leduniversitiesandpublicresearchinstitutionshavehistoricallybeentheprimaryactorsofChina’senergyR&D,andcapturedmostfundingwhilebusinesseswerenotalwaysabletoparticipatefully.Sincethe1980s,Chinahasprogressivelysoughttopromoteknowledgeflowsbetweenpublicresearchinstitutionsandenterprises–primarilySOEs–andencouragebusinessinnovationtofostereconomicdevelopment.Untilthe2000s,manyscience-industrylinksremainedshort-termco-operationsorfullyoutsourcedR&D,asillustratedinthecaseofsolarPVdevelopment.Toachievemorebalancedscience-government-industryrelationshipsanddiversifytherangeofactorsinvolvedinenergyinnovation,thegovernmentstartedsettingupnationalenergyR&Dlaboratoriesdirectlyinenterprises,makingpublicR&Dfundingmoreaccessible,andfurtherpromotingscience-industryco-operation.Forexample,in2006,thegovernmentissuedtheNationalMedium-andLong-TermProgrammeforScienceandTechnologyDevelopment(2006-2020),whichencouragedenterprisesto“becomethemainstayoftechnologicalinnovation”.Theprogrammeincludedachapteronthe“Reformofscienceandtechnologysystemandconstructionofnationalinnovationsystem”,includingthegoaltoestablish“aneffectivemechanismtopromotevariousformsofco-operationbetweenscientificresearchinstitutes,enterprisesanduniversities,andpromotetheflowofknowledge”.Theplanmentionedpersonnelmobility,scienceandtechnologyresourcesharing,jointresearch,technologycontractsandlicensing,technologytransfersbetweenenterprisesandbetweenenterprisesanduniversitiesandresearchinstitutes,andtechnologyclustersor“scienceparks”.020406080100BuildingsEnergyICTIndustryTransportBuildingsEnergyICTIndustryTransportBuildingsEnergyICTIndustryTransportBuildingsEnergyICTIndustryTransportChinaEuropeJapanUnitedStatesPatentcounts(thousands)Internationalco-inventionDomesticco-inventionIndividualinventionIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE74SuccessiveFYPssincethe2000sallincludedaspectsrelatingtoscience-industryco-operation.Inrecentyears,forexample,theNDRCissuedpolicyguidelinesforBuildingaMarket-OrientedGreenTechnologicalInnovationSystem(2019),incollaborationwiththeNEA,MOSTandtheMinistryofEducation.Thenoticeincludedplanstosupport”leadingenterprisestointegrateuniversities,scientificresearchinstitutes,industrialparksandotherforcestoestablishagreentechnologyinnovationconsortium”.The14thFYP’schapteron“Enhancingtheenterprise'stechnologicalinnovationcapability”(2021-2025)alsoaimsto“promoteopenco-operationinscienceandtechnology”,includinginternationally.Policyattemptstoimprovedomesticcollaborationhavemetmixedsuccess.Whileenterpriseshavecertainlytakenamoreprominentroleinenergyinnovationtodaythantheydidinthe2000s,researchsuggestsmorecanbedone.In2021,theChineseAcademyofSciencesandSpringerNatureidentifiedthat“theindustry-academia-researchintegrationinnewenergytechnologiesstillneedstobestrengthened”.Specifically,fewerpatentsinnewenergytechnologiesappeartociterelevantpublicationsinChinarelativetootherinnovativecountriesinthebenchmark–theUnitedStates,Germany,FranceandJapan.Thetechnologytransferratefrompublicationtopatentremainsrelativelyhighinenergystorage(lithiumbatteries),biomassandsolar(organicsolarcells).Whilecollaborationbetweenpublicresearchinstitutesincludingacademiahasimproved,IEAanalysisofco-publishingratessuggeststhatscience-industrylinksstilllagbehindtosomeextent.About5.0%ofChinesepublicationsinphysicalsciencesandengineeringinvolveduniversity-industrycollaborationinrecentyears,whichismorethanothereconomiessuchasMexico(1.8%),India(1.8%),SouthAfrica(3.0%),Thailand(3.3%)andBrazil(3.4%),andsimilartoorhigherthanmoredevelopedeconomiessuchasIsreal(3.7%)andAustralia(4.8%),butlessthantheworldaverage(6.1%).Incontrast,typicalratesarehigherinEurope(7.6%)andtheUnitedStates(7.5%),andafewcountrieshaveestablishedstrongties,suchastheNetherlands(9.2%),Japan(9.8%),Denmark(10.9%),Sweden(12.9%),Finland(13.1%),Austria(13.8%),Ireland(14.9%),andEstonia(17.1%).Governmentfunding–whethernationalorregional–forinnovationactivitieshashadanimpactonthelikelihoodofcollaborationbetweeninnovationactorsinChina.InthecaseofsolarPV,researchersfromuniversitiesandpublicresearchinstitutionswhoreceivepublicfundinghavebeenmorelikelytocollaboratewitheachotherdomesticallyaswellasinternationally,thanpeerswhodonotreceivefunding.However,publicfundingmaynothaveencouragedscience-industrycollaborationinthegeneralcase,possiblyduetoalackofrequirementsormoreindependenceofresearchersinpublicinstitutionscomparedwiththoseinenterprises.TheexceptionwasforresearchersbasedinBeijingandShanghai,whoengagedmoreinscience-industrycollaboration,especiallywithreputableaffiliations.Puttinginplaceincentivesforstrongercollaborationcouldhelpindustrybetterabsorbnewknowledgeandbringthesetomarkets.TherearealsoIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE75disparitiesbetweenprovinces,withscience-industrycollaborationwithinSouthChinabeingrelativelystrongerthaninotherregions.Open-accesspublishingremainslimitedPromotinganopenaccesstoacademicfindings(e.g.bymakingopen-sourcepublishingcompulsoryuponreceptionofpublicgrantsandpre-assigningbudget,aswithEUresearchgrants)canfosterknowledgeexchangebetweeninnovationactorsandhelpstimulateoverallactivity.IEAanalysissuggeststhat25%ofChinesepublicationsinphysicalsciencesandengineeringoverthe2016-2019periodweremadeopenaccess,whichisslightlymorethanIndia(22%)andlessthanKorea(31%),butmuchlessthanBrazil(47%),Japan(48%),theUnitedStates(64%)andEurope(66%).Thismayresultfromthehighercostsassociatedwithopenaccesspublishing,anddifficultiesinsecuringdedicatedfundingunlessbudgetedinadvance.Co-operationwithinternationalpartnersiscoretoChina’senergyinnovationstrategyIncreasingengagementwithinternationalpartnersChinahassignificantlyaccelerateditsengagementwiththeinternationalcommunityaspartofitsinnovationstrategy.China’sparticipationinmultilateralplatformsisstrongandincreasing,includingintheIEATechnologyCollaborationProgrammes(TCPs),MissionInnovation(MI)andtheCleanEnergyMinisterial(CEM),andthegovernmenthasalsoestablishednumerousbilateralpartnerships.Thistrendisexpectedtocontinueinthe14thFYPperiod,asChinesedecisionmakersseektoactivelyintegrateintotheglobalinnovationnetwork,establishinnovationdialogueswithkeypartnersand“conductjointresearchwithover50countriesandregions”.Thereareincentivesforenterprisesandresearchinstitutesto“goglobal”andseekco-operationwithinternationalpartners,assetoutinNDRC’sguidelinesforBuildingaMarket-OrientedGreenTechnologicalInnovationSystemin2019.Internationalco-operationprogrammesforenergyinnovationaremostlyco-ordinatedbyMOSTandCAS,undertheleadershipoftheNDRCandNEA.Forexample,MOSTpublishedin2021guidelinesforeightnewcollaborativeactivitiesaspartoftheNationalKeyR&DProjecton"InternationalCo-operationinScienceandTechnologyInnovationbetweenGovernments",includingwithCroatia,Denmark,Israel,Japan,Malaysia,Malta,Norwayand.theEuropeanUnion.Collaborationareascoverabroadrangeofenergyfields,includingfossilfuels(e.g.coal,oilandgas),CCUS,renewables,powerandsmartgridtechnologies,hydrogen,power-to-X,aviation,shipping,andtransportation.MOSTalsodevolvessomeresponsibilitytoprovincesandcities,whichcanseekstrategicco-operationIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE76opportunitieswithforeignpartners–suchasQingdaoin2017ontopicsrelatingtobiology,newmaterials,energysavingandemissionsreductionwithpartnerssuchasAustria,France,Japan,theUnitedStates,andtheEuropeanUnion.CAShasestablishedco-operationwithanumberofforeignresearchinstitutionsandinternationalorganisationsaroundtheglobe–suchasthroughtheInternationalPartnershipProgrammeandtheScienceandTechnologyCollaborationActionoftheBeltandtheRoad–andplaysanactiveroleintheinternationaltalentsprogramme.AsofOctober2021,Chinawasamemberof27outof37possibleTCPs,includingeightoutofnineintherenewableenergyandhydrogencategory.Thiscorrespondstothefourth-highestparticipationinTCPs,behindtheUnitedStates(35),Japan(30),Korea(29)andCanada(27),aheadoftheEuropeanCommission(24),andfaraheadofotheremergingeconomiessuchasIndia(11),Mexico(9),SouthAfrica(7)andBrazil(4).ChinaplaysaproactiveroleinMI,inwhichithasbeenco-leadingtwoinnovationchallengessince2015onsmartgridsandsustainablebiofuels,andhaslaunchedwithItalyandtheUnitedKingdomanewMissionin2021,GreenPoweredFuture.ChinaisalsoinvolvedinCEM,technologyinitiativesunderUnitedNationsbodies,andregionalenergyinnovationpartnershipssuchasundertheAsia-PacificEconomicCooperationandtheAssociationofSoutheastAsianNations.Chinahasalsosetupbilateralpartnerships,suchaswiththeEuropeanUniontoenhancetechnicalco-operation,theUnitedKingdomtopromoteindustrialdevelopmentandacademicco-operationinCCUSinacentreinGuangdong,Franceonnuclearpower,andtheUnitedStatesinajointCleanEnergyResearchCenter.IthasalsoestablishedSouth-Southpartnershipsforknowledgesharingthroughnewchannelsoftechnologytransfers.ThisincludesanincreasingpresenceinBeltandRoadcountries,aspromotedintheBeltandRoadScience,TechnologyandInnovationCooperationActionPlan,whichincludedaTalentedYoungScientistProgrammeaimingtohelpover5000foreignscientiststoworkinChinaandsetup50jointlaboratories.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE77MembershipinIEATechnologyCollaborationProgrammes,bytechnologyfocusareaIEA.Allrightsreserved.Note:MembershipasofOctober2021.Sources:AdaptedfromExpandingtheglobalreachoftheTCPsandTrackingcleanenergyinnovation.CollaborationoncleanenergybetweenChinaandtheUnitedStatesIn2009,theUnitedStates-ChinaCleanEnergyResearchCenter(CERC)waslaunchedtodevelopcleanenergytechnologiesandcarryoutdemonstrationprojects.Itleadsfiveinitiatives,whichstartedin2011(AdvancedCoalTechnology,BuildingsEnergyEfficiencyandCleanVehicles),2016(onenergyandwater)and2017(onmedium-andheavy-dutytruckefficiency).Forexample,theChangingDistrictPilotProject,whichfocusedonbuildingenergyefficiencytechnologies,mobilised72partners–13researchinstitutesand59industryactors–inaBuildingsEnergyEfficiencyConsortiumundertheleadershipoftheLawrenceBerkeleyNationalLaboratory,whichincludedMOST,MOHURDandTsinghuaUniversity,amongothers.TheUnitedStatesDepartmentofEnergycommittedUSD25millioninpublicfundingoverthe2011-2020period,matchedbyMOST.Additionalfundingandin-kindcontributionsfromindustryactorswereprovided.Overall,China’sinvestmentsexceededthatoftheUnitedStates,reachingnearlyUSD10millionin2015(outofatotalofUSD17.5million).Thefirstphase(2011-2013)primarilyfocusedonreports,papersandincrementalimprovementsinsinglecomponents.Thesecondphase(2013-2015)openedtheopportunityfordemonstrationprojectsandindependentIP,andthethird(2016onwards)forjointIP.Tangibletechnologicalprogresshasbeenmadethroughoutthesecollaborativeactivities.Forexample,novelmaterialsandtechnologiesforimprovedinsulationinbuildingsweredeveloped,testedandcommercialisedthroughtheCERC,andwereawardedaGoldEdisonAwardin2016.Someofthekeypotentialrisksidentifiedbypartnersincludedreducedfundingovertime,projectdelays,shiftingpolicypriorities,slowbilateralR&Dcollaboration,and0510152025303540UnitedStatesJapanKoreaCanadaChinaEuropeanCommissionGermanyItalyAustraliaFranceUnitedKingdomIndiaMexicoSouthAfricaBrazilRenewableenergyandhydrogenFusionpowerBuildingsElectricityIndustryTransportCross-cuttingFossilfuelsIEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE78lackofadequatedemonstrationsites.Furthermore,analystsobservethatlittleofthenewIPcamefromcollaborativeactivitiesbetweenparticipantsrelativetoin-countryactivityundertheprogramme,despiteadedicatedTechnologyManagementPlantomitigateconcernsoneachside.LearningsfromthisexperimentmaybevaluableindesigningfuturecollaborativeactivitieswithChineseresearchinstitutions.DeliveringtangiblebenefitsfrominternationalcollaborationWhilethereisstrongengagementfromtheChinesegovernmentininternationalenergyinnovationpartnershipsandassociatedpoliticalfora,fewercollaborationsareobservedbetweenChineseresearchersandinternationalpeersintermsoffilingforco-patentedinventionsorco-publishingscientificpapers.China’sshareofco-inventionsintotalinventionsforclimatechangemitigationtechnologiessurpassed70%inthe2010s,butonaverageonly25%ofthesecollaborationsinvolvesinternationalpartners.Mostco-operationsremaindomesticpartnerships.Co-operationstrategiesathomecanfosterknowledgeflowsamonginnovationactorsandincreasechancesofbreakthrough,andcollaboratingwithforeignpartnerscanhelpadaptforeignconceptstolocalneedsandbuilddomesticinnovationcapabilities.China’smaincollaboratingpartnersincludetheUnitedStates–whichaccountsforthemajorityofinternationalco-patentinginenergy-relevantclimatechangemitigationtechnologies–andotherregionaleconomiessuchasJapanandKorea,followedbyEuropeancountries.WiththeUnitedStates,mostcollaborationssince1990intheselectedsamplearerelatedtoenergygeneration,transmissionanddistribution(35%),followedbyICT(25%),industry(16%),buildings(13%),andtransport(9%).NotablecollaborationwithIndiaisobservedsincethemid-2000s,withaprimaryfocusonICT(over40%),followedbyenergygeneration,transmissionanddistribution(31%),andtoalesserextentindustry(13%),andbuildingsandtransport(11%together).Jointanalysisonlow-carbonenergytechnologiesbytheIEAandEuropeanPatentOfficeshowsthatinternationalco-patentingratesarelowerinChinathanintheUnitedStatesandEurope,buthigherthaninKoreaandJapan.Theshareofco-inventionincreasedintheUnitedStatesfrom9.3%overthe2000-2004periodto12.7%over2015-2019,inGermanyfrom9.6%to13.1%,intheUnitedKingdomfrom20.6%to22.3%,anditremainedstableinFranceat13.0%.However,itfellfrom12.9%to7.2%inChina,suggestingmore“self-sufficientnationalinnovationsystems,butalsopotentialmissedopportunitiesforsharedlearning”.Overall,Chinaisinvolvedinfewoftheworld’stopcountry-countrycollaboratingpairsacrossenergysectorsandtechnologyareas.InJapanandKorea,internationalco-patentingratesarestablebelow2%(Japan)and3%(Korea)inthelastdecade.IEA.Allrightsreserved.TrackingCleanEnergyInnovationKnowledgemanagementandnetworksFocusonChinaPAGE79Similarly,Chineseuniversitiestendtoco-publishlesswithinternationalresearchinstitutionsthanothercountries.Overthe2016-2019period,only26%ofChinesepublicationsinphysicalsciencesandengineeringinvolvedinternationalcollaboration,whichissimilartoIndia(27%)butamongtheworld’slowestrates.Incontrast,globalinternationalco-publishingratesaverage50%andreach38%inKorea,42%inJapan,45%inThailand,46%inBrazil,47%inMexico,59%intheUnitedStates,60%inMalaysia,62%inCanada,63%inIsrael,66%inSouthAfrica,68%onaverageinEuropeand71%inAustralia.China’smaincollaboratingpartnersintermsofco-patentinginclimatechangemitigationtechnologiesrelevanttoenergyfields(2000-2019)IEA.Allrightsreserved.Notes:IncludesclimatechangemitigationtechnologiesinthefieldsofCCUS,ICT,buildings,industry,energyproductionanddistribution,andtransport.Bilateralcountrypaircollaborationsbasedoninventorcountryofresidence.Source:IEAanalysisbasedonOECDdataoninnovationinenvironment-relatedtechnologies.01002003004002000200520102015Co-patentcountsSingaporeNetherlandsSwitzerlandFranceSwedenUnitedKingdomCanadaIndiaJapanGermanyKoreaUnitedStatesIEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE80Market-pullforcesforinnovationIntroductionMarketdemandforenergyproductsandservicescancreateincentivesforinnovatorstodevelopnew,betterandcheapertechnologies,andtriggerfeedbackloopsfromusersbacktoinnovators–allofwhichcontributeto“pulling”innovationfrommarkets.ThissectionsummarisesChina’skeymarket-pullstrengthsfortechnologyinnovation,examinesthespecificroleofandrisksassociatedwithindustrialpolicy,andillustratescaseswheredemand-driveninnovationcanhappenoutsidethetraditionalsystemofcentrallymanagedR&Dprogrammes.KeytakeawaysChinahasuniquemarketandeconomicfeaturesthatcanbeeffectivemarket-pullleversforinnovation,suchasalargedomesticmarketsize,centraldecision-makingandsubnationalimplementation,availabilityofcheapcapitalforindustrydevelopment,andwhole-of-industrystrategiestosetupintegratedmajors.Market-creationandindustrialpolicyarecoreelementsofChina’sdevelopmentstrategy,andenabledaquickdevelopmentofmanufacturingtoserveforeignanddomesticmarkets.Throughlearning-by-doing,jointventuresandknowledgepartnershipsandincombinationwithresource-pushsupport,marketcreationcontributedtoimprovetechnologyinnovationcapacityasindustrydeveloped.However,relyingoncentrallymanaged,large-scaleindustrialpolicycanhindertechnologyinnovationinsomeinstances,andkeyissueswillneedtobeaddressedtomeetChina’sclimategoals.Inthe20thcentury,China’sinnovationsystemwasshapedbyatensionbetweenrapidlygrowingmarketdemandforenergytechnologiesandlowsupportandresourcesavailableforR&D.Thisfosteredacultureofinnovationstimulatedbylocaldemandandsupport,withsomesuccesssuchasinthecaseofsolarwaterheaters,butlimitedlong-termimpact.IEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE81China’skeymarket-pullstrengthsfortechnologyinnovationMarketsplayanimportantroleinfosteringorhinderingtechnologyinnovation,andtherearevariouswaysinwhichmarketforces“pull”ideasalongtheinnovationprocess.Forexample,iftheexpectedmarketvalueofnewtechnologies,productsorservicesislargeenoughtomaketheR&Drisksworthwhile,itcreatesincentivesforinnovatorstoinnovate.Commercialscale-upalsoleadstolearning-by-doingandfeedsinnovatorswithnewideasforimprovementsandproducts.Market-pullleversareoftenafunctionofrulesandincentivesestablishedbylegislation.In2019,theNDRCpublishedpolicyguidelinesonBuildingaMarket-OrientedGreenTechnologicalInnovationSystem,whichillustratesChineseeffortstostrengthentheroleofmarketsinfosteringinnovation.Thenoticeaimsto“givefullplaytothedecisiveroleofthemarketin…technologicalrouteselectionandtheallocationofinnovativeresources”.Itpromotestheuseofmarket-orientedinstrumentssuchasbusiness-ledinnovation,publicprocurementandtechnologystandardsforgreentechnologies,andmarket-ledgreenfinance.InChina,marketandeconomicstructuresaredifferentfromothermajorinnovatingcountries.Combinedwithresource-pushpolicysupport,someofitsspecificfeaturescanbekeymarket-pullstrengthstoaccelerateinnovation.Amongthesecorespecificitiesandkeystrengths:Hugedomesticmarketsizeandstrongdemandgrowthprospectsforenergytechnologiesandservicesinlinewiththecountry’ssocio-economicdevelopment,whichopenssignificantbusinessopportunitiesforenergyentrepreneursandinnovators,includingforeignmultinationals.Centralpolitico-economicdecision-makingandprioritysetting,whichenablesthegovernmenttoquicklysetincentivesandregulationstosteerindustryactors–startingwithSOEs–towardsnationalprioritygoalsandrampupmanufacturingcapacityasnewtechnologyopportunitiesarise.Availabilityofcheapcapitalforstrategicindustries,suchastoestablishandfinancenewcompanies,setupnewmanufacturingfacilitiesanddeployemergingtechnologiesatscale.Whole-of-industrystrategytodevelopintegratedsupplychains,fromrawmaterialtomanufacturedgoodsandrecycling,andforasmanytechnologysub-componentsaspossible,whichdecreasesoverallproductioncostsandmitigatesrisksforinvestmentsinnewtechnologiesthatrelyonexistingsupplychains.Strongsocio-politicalsupporttobuildglobalindustrychampions,whichopenssignificantbusinessopportunitiesforinnovatorsdevelopingcleanenergytechnologiesandconceptswithhighpotentialinforeignmarkets.IEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE82Highinvolvementofsubnationallevelsofgovernmentinmarketcreation,whichenablesimplementationofnationalstrategiesthroughtargetedincentivesandregulationsbasedonlocalstrengthsandcontexts,andquickset-upofnewhigh-techdemonstrationzonesandmanufacturingfacilitiesincollaborationwithlocalindustry,finance,researchandacademicactors.Clearnationalvisionandmarketsignalswithvisibilityatseveraltimehorizons,whichcontributetoincreasingmarketconfidenceandloweringriskofinvestmentsinnewtechnologyareasthatcansupportnationalpriorities.Therearetypicallythreeclearlyfleshedouthorizons:1)long-termdevelopmentaspirationsandenergyandcarbonneutralitygoalsinthe21stcenturyandbeyond;2)medium-termeconomicandtechnologicalactionplansthatcancoverperiodsof15yearsormore;and3)near-termpolicyschemesthataredynamicallyevaluatedandupdatedthroughtheFYPdecision-makingprocess.ThenotableroleofindustrialpolicyinChinaManufacture,export,createdomesticmarkets,innovateChina’sstrongrelianceonmarketcreationandindustrialpoliciestosecurehighglobalsharesofmanufacturingsectorsandmaintaineconomicgrowtharefeaturesthatmarkitoutcomparedwithothercountries.KeypolicyobjectivesunderpinningChina’sindustrialpolicyincludetechnologyupgradinganddevelopingdomesticinnovationcapabilities–allofwhicharecitedinsupportoflong-termstructuralgrowthperguidelinessetoutinthesuccessiveFYPs.PoliciessuchasMadeinChina2025andChinaStandards2035illustratethecountry’sindustrialstrategytobecomeafrontrunnerinnewtechnologyareasandreducerelianceontechnologyimports,justasthe12thFYPanditspredecessorsaimedtoreducerelianceonfuelimports.IndustrialpolicyhashelpedshapeChina’stechnologyinnovationinnumerousways,includingthefollowing:Industrialpolicyhelpsbuildmanufacturingcapabilityinstrategicsectors,andusingFYPshasenabledChinatoadjustnationalprioritiesdynamicallyandquicklyinvestinkeyenergyandindustrialsegmentswhenopportunitiesarose.Low-costcapital,cheapinputs,subsidiesandothersupportschemeshavecontributedtobringingdownthecostofgoodsmanufacturedinChinarelativetointernationalstandards.StrongincentivestoproducetechnicalcomponentsandsetupmanufacturinginChinasuccessfullyattractedforeignindustryactors,inpartdrawnbytheprospectsoflowerproductioncostsandmorelenientlabourpolicythanintheircountryoforigin.Lowerpricesaswellaslarge-scalepolicypushtoboostexportsandstimulatedomesticdemandexpandedmarketsforChinesegoodsandIEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE83strengthenedChineseenterprises,especiallySOEs.SeveralChineseenterprisesgrewquicklytobecomeglobalmajorscompetingwithforeignfrontrunners.ThisstimulatednewsupportinotherregionssuchasintheUnitedStatesandEurope,includinganti-dumpingpolicy.ForeigndirectinvestmentsmaterialisedthroughjointventureagreementsbetweenforeignandlocalindustryactorstofulfilrequirementstoentertheChinesemarket,andthesetypicallyembedknowledgesharingandtechnologytransferclausestobuildlocalcapacity.Learning-by-doingandextensiveknowledgeandtechnologytransfersoccurredasdomesticmanufacturingcapabilitiesimprovedandChineseenterprisesdeveloped,althoughthefocusremainedonmanufacturingandprocessinnovationaswellaspursuingeconomiesofscaletobringcostsdown.Chineseindustrymajorsincreasedspendingoninnovationastheygeneratedincreasingrevenues,especiallyfromexports,andprogressivelyshiftedtheirfocusfrommanufacturingforeigntechnologiesonlytodevelopinghome-grownconcepts.Asotherregionsoftheworldstrengthenpolicysupportforlow-carbontechnologies,Chinafacesnewincentivestoinvestintechnologydevelopment,innovationandmanufacturing.CompetitionbetweenChinesesupplierstokeeppushingdowncostsandincreasingreliabilityfostersinnovation.InthecaseofsolarPV,industrialpolicythroughexport-orientedanddomesticmarket-creationsupportschemesandotherdemand-pullleverswereessentialtobuildastrongindustryandbecomeaglobalmanufacturer.Combinedwithresource-pushsupportforinnovation,includingincreasingR&Dinvestmentsalongsupplychainsinvariouscomponents,China’ssolarPVecosystemprogressivelyshiftedfrommanufacturingtonoveltechnologyinnovation.Chinahasbecomeanimportantenergytechnologymanufacturerandisprogressivelyemergingasaninnovatorthroughsimilarindustry-ledpatterns,intechnologyareasbeyondsolarPV,suchas:EVsandassociatedtechnologies,includingbatteriesandcharging.Renewables,suchaswindturbines,hydropowerandsolarthermal.Powergridequipmentincludingforsmartgrids.Nuclearpowerdesignsandassociatedtechnologies.Buildingstechnologiessuchaslighting,heatingandcoolingsystems.Biofuelsproductionandbioenergytechnologies.Coal-basedpowergenerationandchemicalsproduction.ICTswithapplicationsinenergy.IEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE84PossiblerisksofindustrialpolicyforinnovatorsChina’suseofindustrialpolicyforselectedstrategicindustrieshasenabledittocompeteininternationaltechnologymarkets,buttherearealsosomenegativeconsequencesasfarasinnovationisconcerned.WhilethereisnoclearexpectationforChinatochangecourseradicallyinthe14thFYPperiod,itwillneedtoovercomesomeoftheseissuestoreachcarbonneutralitygoals.First,whilecentraldecision-makingenablesthesteeringofnationaleffortstowardsnewtechnologyprioritiesandlong-termgoalsquicklyandeffectively,itpresentsrisksof“pickingwinners”.Relativetotechnology-neutralpolicyapproaches,thislimitsthechancesofmarketrationalisationandradicalinnovation.Withinagiventechnologyarea,“pickingcompanies”suchasbymandatingSOEsalsohinderscompetitionthatcouldtriggertechnologyimprovements,anddecreaseincentivesformajorincumbentstoinnovatebeyondtargetssetoutbypolicy.ResearchsuggeststhatpoliticalconnectionsofChinesefirmscanhaveanegativeimpactongreentechnologyinnovation,andthatfirmswithoutclosetiestopublicbodiesincreaseinvestmentsininnovationtoensuretheyremaincompetitive.Second,industrialpolicyhaspushedcompaniesorsectorssuchasinheavyindustrytowardsexcesscapacityinsomeinstances,notablyduetoafocusoneconomiesofscaleforexportsandaresultingmismatchbetweenmarketdemandandlocalproductioncapacity.Asinternationaldemandandtradeshrankinthe2010safterthefinancialcrisis,effortstoexpanddomesticmarketswerestrengthenedtocompensate,butexcesscapacityremainsanissue.Oversupplyhasledtofiercecompetitionindomesticandinternationalmarkets,requiredresourcestohelpso-called“zombieenterprises”withlowcapacityutilisationratesstayafloat,andtriggeredbankruptciesandrestructuringbothinChinaandcountrieswhereChinesecompanieshadcapturedmarketshare.Third,itcanbeachallengetocreateincentivestoimprovetechnologyperformancewhenindustrialpolicyseekstolowercoststocaptureinternationalmarketshareorfosterlocaldeployment.Infact,thiscanalsoresultinreducingthegloballevelofperformanceinnovationinsomeinstances.Forexample,inthecaseofsolarPV,incentivestoinnovateandexplorenewandalternativeconceptsmayhavedecreasedinternationallybecauseofstarkcostreductionsofoldergenerationtechnologiesthrougheconomiesofscaleandexcesscapacityinChina,evenifinnovationrelatedtoassociatedtechnologiesisstimulatedbylow-costbasicproducts(e.g.PVintegration,smartcontrols,inverters,tracking,installation).ResearchonChina’swindpowersuggeststhatrelyingonfixedindustrialinvestmentsandsubsidiescanunderminetechnologyinnovationbutthatlocalgovernmentactiontostimulateR&Dcanbalancetheseeffects.IEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE85Innovationoutsidethetraditionalsystem:Thecaseofsolarwaterheatersinthe1990sPriortothe2000s,China’sbudgetsforenergyR&Danddemonstrationwererelativelylow,andtherewerefewincentivesandresourcesavailableforradicalinnovationandbasicresearch(resourcepush).Yetlocaldemandforaffordable,efficientandreliableenergyproductsandserviceswassteadilyincreasingasthecountryquicklydevelopedandenergyaccessexpanded(marketpull).Thishasfosteredacultureofdemand-driveninnovationandengineering,inwhichinnovatorshavehadincentivestodeveloptechnologiestomeetpressingandlocalneeds,andadaptandincrementallyimproveexistingtechnologiesorforeignconcepts.Thiscouldbedescribedas“frugalinnovation”,atermthathasbeenappliedtosmall-scaleandgrassrootsentrepreneurialactivityinresource-constrainedsettings,particularlyinemergingeconomycontexts.ThistypeofinnovationhasledtosomesuccessesinChina.Forexample,increasingdemandforaffordableandefficientthermalcomfortsystemstriggeredtheemergenceofChina’ssolarwaterheatertechnologiesinthe1990s,whichreachedmassproductionfromgrassroottechnologydevelopmentwithlittlecentralgovernmentsupportintheearlystages.Today,Chinaisbyfarthelargestmarketworldwideforsolarheatingandcoolingtechnologies,andakeymemberoftheIEASolarHeatingandCoolingTCP.Whilesomeknowledgeinsolarwaterheatertechnologieshadbeendevelopedbypublicresearchinitiatives(e.g.patentforlow-costevacuatedtubecollectorsbytheBeijingSolarEnergyResearchInstituteofTsinghuaUniversityinthe1990s),thenationalgovernmentdidlittletodevelopthetechnologyonceinitialproductsreachedmarkets.AninnovationclusterforsolarwaterheatersemergedinShandongprovince,aregionwithabundantsolarresourcesthatlackeddirectlyavailablecheaperalternativesforwaterheating.Thefirstsolarwaterheaterentrepreneursoftencamefrompublicresearchinstitutes,suchastheEnergyResearchInstituteoftheShandongAcademyofSciences.Today,ShandongishometohalfofChina’stopsolarwaterheatercompanies.Overtime,theseenterpriseshavesuccessfullybroughtthecostsofsolarwaterheatertechnologiesdownincludingthankstoincrementalinnovationandtechnologyimprovements.Localsupport–provincialandmunicipal–helpedpullproductdevelopmentalongtheinnovationvaluechain,motivatedbytheeconomicprospectsofdevelopingastrongindustrytomeetmarketdemand.In2004,forexample,thefirstpolicyformandatoryinstallationofsolarwaterheatersinbuildingswasintroducedinRizhao,acoastalcityinShandongprovinceseekingtotransitionfromahistoryofheavyindustryandexposuretopollutiontoanationallyrecognisedcleanercity.Retrofittingwasinitiatedatalargescale:99%ofhouseholdsinthecentraldistrictand30%ofruralresidencesareestimatedtobeequippedwithsolarwaterheaters.In2007,theprovincialgovernmentputinplacesubsidiesforsolarwaterIEA.Allrightsreserved.TrackingCleanEnergyInnovationMarket-pullforcesforinnovationFocusonChinaPAGE86heatinginstallations,issuedmandatoryinstallationrules,establishedqualityandperformancestandards,andsoughtfinancialsupportfromnationalinstitutes.Asthetechnologygainedsocio-politicalsupport,localinitiativesbenefitedfromincreasingsupportandrecognition,includinginternationally,suchasin2009whenRizhaoreceivedaUnitedNationsHabitatHonourAward.In2009and2012,demonstrationprojectsbackedbythecentralgovernmentwerelaunchedinShandongasRizhaoandDezhouwereeachrecognisedasNationalDemonstrationCityfortheApplicationofRenewableEnergyinBuildings.However,nationalsupportremainedlowoverallintermsofbothresource-pushandmarket-pullschemes,notablyrelativetotechnologiessuchassolarandwind.Local,demand-driveninnovationhasbeeneffectiveatdevelopinghome-grownsolarwaterheatingandcoolingtechnologiesinChina.Leadingcompanieshavebeenabletogeneratesignificantprofits,allocatebudgetstotechnologydevelopmentandbringcostsdownthankstoincrementalimprovementsandeconomiesofscale,andChinaremainstheworld’slargestmarketforthistechnology.However,therearesomelimitstothemodel.RelativetootherenergysegmentsthathavebenefitedfromstrongerandmorecentralisedsupportforR&D,innovationcapacityinsolarwaterheatingandcoolinglagsbehind.CompanieshavemorelimitedexperiencewithnovelR&Dandinnovation,whichcouldmakeitmorechallengingforthemtoadapttochangingmarketconditions,competewithnewtechnologyconceptsanddesigns,andremaincompetitiverelativetoalternativessuchaselectricandgasheatersinthelongterm.IEA.Allrightsreserved.TrackingCleanEnergyInnovationWherenextforenergyinnovationinChina?FocusonChinaPAGE87WherenextforenergyinnovationinChina?Inthelast20years,Chinahasstrengtheneditspositionontheglobalstageasanenergyinnovator.Lookingforward,cleanenergyinnovationwillplayacrucialroletoachieveChina’scarbonneutralityobjectives.WhiletherewaslittletonoactivityinenergyR&Dinthecountrypriorto2000,Chineseactors–publicresearchinstitutes,universities,SOEsandprivatefirmsincludingstart-ups–haveaccountedforasteadilyincreasingshareoftheworld’snewenergytechnologydevelopments.Today,Chinaranksamongtheworld’sbiggestpublicspendersonenergyR&D,andissecondtotheUnitedStatesintermsoflow-carbonenergyR&Dspending.IncertaintechnologyareassuchassolarPV,recentpatentingandperformancetrendssuggestthatChinamaybeclosetotyingupwithotherleadinginnovatingcountries.Inelectricmobility,Chinaishometotheworld’smostdynamicstart-upecosystemwithconcertedsupportfrompublicandprivateactors,andincreasinglyintegratedsupplychainsfromrawmaterialsforbatteriestoEVsandcharginginfrastructure.Chinaissuccessfullydevelopinganddemonstratinghome-grownnuclearpowerplantdesigns.Thesedevelopmentsaretheresultoftwodecadesofincreasingpolicyfocusontechnologyinnovation,whichunderpinChina’sambitionstobecomeaproducerofknowledgeratherthananimporter.EnergyinnovationhasbecomeacentralpartofFYPprioritiesandhigh-levelstrategydocuments,particularlysincethe2010s,andthispolicypushhasbeenconfirmedforthecoming14thFYP.ThestoryofhowChinacametodominateglobalsolarPVmanufacturingiswellknown,butthereislessdocumentationofhowthisrevolutioninmassmanufacturingofenergysupplytechnologieshaschangedtheglobalconversationaroundenergyinnovationandhelpedChinatomovetothefrontierofsolarPVR&D.Injusttwodecades,Chinabecameaglobalproductionfrontrunner,achievingsignificantcostreductionsthroughmanufacturingandprocessinnovationandeconomiesofscale,andisnowshiftingfocustowardstechnologyinnovation.Thiswasmadepossiblethankstostrongmarket-pullindustrialpolicytosupportthesolarPVindustry,combinedwithtargetedresource-pushandknowledgemanagementschemestofosterdomestictechnologydevelopment.Thegovernment’sstrategyinvolved,amongothers:investingalongtheentirevaluechainfromrawmaterialstofinalproducts,andinbothmanufacturingcapacityandR&Dactivities;developingintegratedcompaniesinawhole-of-industryapproach;creatingdomesticmarketsandfacilitatingexports;acquiringIP,R&Dcentresandcompetingcompaniesabroad;andpursuingtechnicalco-operationwithinternationalpartners.IEA.Allrightsreserved.TrackingCleanEnergyInnovationWherenextforenergyinnovationinChina?FocusonChinaPAGE88TheexperiencewithsolarPVisillustrativeofseveraloftheemergentkeyfeaturesofChina’sinnovationecosystem,whichhavealsobeenevidentinthearrivalofChinaasasourceofinnovationinbatteryandEVdesignsandproduction.Thesestrengthsinclude:Increasingresourcesforinnovation,suchasfundingforR&Danddemonstration,abundantandcheapVCfortechstart-ups,availabilityofhumancapitalandskilledworkforce,andthedevelopmentofresearchfacilities,innovationcentresandenablinginfrastructure.Moreeffectiveanddynamicknowledgemanagement,illustratedbyimprovementsinresearchoutputquantityandquality,bettervisibilityforChineseresearchinstitutionsanduniversitiesontheglobalstage,proactiveinternationalcollaborationstrategiestoacquireorco-developIP,amendmentstoIPregimestoprogressivelyalignwithinternationalstandards,andstrongerknowledgenetworksamonggovernment,scienceandindustry.Strongmarket-pullleversforinnovationthroughlarge-scaleindustrialpolicy,domesticmarketcreationandexport-orientedmanufacturing,buildingonChina’suniqueeconomicstructureandhugedomesticmarket,whichenabletoquicklybuildintegratedindustrychampions.Co-ordinateddecision-makingtosteerinnovationtowardsnationalpriorities,withgovernmentprocessestoquicklyalignthecountry’sinnovationactivitiesandkeyactors(includingindustry,academiaandfinance)withpressingdomesticneedsandarisingstrategicopportunities.Lookingforward,China’sleadershiphasidentifiedareasforpossibleimprovementinthecountry’sinnovationecosystem.GovernmentannouncementssignalthatChinawouldfocusonpromotingoriginalandbreakthroughinnovationprojects;optimisingresourceallocationbasedonpressingneedsandstrategicopportunities;increasingtheefficiencyandeffectivenessofresearchinstitutions,andmodernisingtheirstructure;furtherincludingcompaniesininnovation;andstrengtheningevaluationandmonitoringmechanisms.Inthe14thFYP(2021-2025),energyinnovationisfeaturedasacorethemetoacceleratesocio-economicdevelopment.In2021,thegovernmentfleshedoutplanstoachievelong-termcarbonneutralitygoalswithastrongfocusondevelopingnewtechnologiesandpursuingstrategicopportunitiesinglobalsupplychains(e.g.low-carbonhydrogenproductionanduse,CCUS,bioenergy,energystorageandadvancedbatteries,nuclear,andcriticalminerals).ThemessagefromgovernmentsourcesisthatChinaisseekingtosecureapositionasagloballeaderincleanenergytechnologyinnovationwhilealsomaintainingitsdominanceandcompetitiveedgeinmanufacturing.However,whileitistemptingtobelievethatsolarPVprovidesablueprintforenergyinnovation,thereisnoclearevidencethatitisanappropriateanalogueforlargerandmorecomplextechnologies,forwhichmassmanufacturingplaysasmallerrole(e.g.nuclear,CCUSandbiorefining).IEA.Allrightsreserved.TrackingCleanEnergyInnovationWherenextforenergyinnovationinChina?FocusonChinaPAGE89PartofChina’sinnovationstrategyhasinvolvedtappingintoglobalknowledgenetworks,engagingwithinternationalpartnerstoshareinformationandlearn,andsettingupbilateralpartnershipswithothergovernmentsandindustryactors.ThishasbeenillustratedbyincreasingparticipationinkeyenergyinnovationpartnershipssuchastheIEATCPsandMI,amongothermultilateralpartnershipsforenergyinnovation,butalsobythenumerousjointventuresbetweenChineseindustryandforeignactors.Ontheotherhand,thereremainconcernsaboutIPmalpractice,includingamongChina’skeytradingpartners,whichunderminemutualtrustandcanhindereffectivecollaborationbetweeninstitutions.Addressingsuchconcernscanhelppromotemutuallybenefitialpartnershipsandstrengtheninternationalcollaboration,whichwillbeneededforChinatoachieveitscarbonpeakingandneutralitytargets.Withouteffectiveinternationalcollaboration(e.g.onmarkets,supplychains,standardsandR&D),globalenergytransitionstomeetnetzeroambitionscouldbedelayedbydecades.Co-operationcanhelpimprovefurtherChina’sinnovationecosystemononehand,andfacilitatethediffusionofnewenergytechnologyconceptsandproductsdesignedinChinaontheother,therebysupportingcollectivesuccess.IEA.Allrightsreserved.TrackingcleanenergyinnovationAnnexFocusonChinaPAGE90AnnexAbbreviationsandacronymsACalternatingcurrentACCA21AdministrativeCentreforChina’sAgenda21CAEChineseAcademyofEngineeringCASChineseAcademyofSciencesCATLContemporaryAmperexTechnologyCo.LimitedCCUScarboncapture,utilisationandstorageCEMCleanEnergyMinisterialCERCCleanEnergyResearchCenterCNOOCChinaNationalOffshoreOilCorporationCNPCChinaNationalPetroleumCorporationCNYYuanrenminbiDCdirectcurrentEVelectricvehicleFYPFive-YearPlanGDPgrossdomesticproductHVACheating,ventilationandairconditioningICTinformationandcommunicationtechnologyIEAInternationalEnergyAgencyIPintellectualpropertyIPOinitialpublicofferingJACJianghuaiAutomobileLEDlight-emittingdiodeMEEMinistryofEcologicalEnvironmentMIMissionInnovationMIITMinistryofIndustryandInformationTechnologyMoFMinistryofFinanceMOHURDMinistryofHousingandUrban-RuralDevelopmentMOSTMinistryofScienceandTechnologyNDRCNationalDevelopmentandReformCommissionNEANationalEnergyAdministrationNECNationalEnergyCommissionNRELNationalRenewableEnergyLaboratoryOECDOrganisationforEconomicCo-operationandDevelopmentPGAsprofessionalgoverningagenciesPVphotovoltaicR&DresearchanddevelopmentS&TscienceandtechnologySASACState-ownedAssetsSupervisionandAdministrationCommissionSMEssmallandmedium-sizedenterprisesSOEstate-ownedenterpriseTCPTechnologyCollaborationProgrammeUSDUnitedStatesdollarVCventurecapitalWIPOWorldIntellectualPropertyOrganizationIEA.Allrightsreserved.TrackingcleanenergyinnovationAnnexFocusonChinaPAGE91UnitsofmeasurementgCO2/kWhgrammesofcarbondioxideperkilowatt-hourGWgigawattGWhgigawatt-hourkmkilometrektkilotonnekVkilovoltkWkilowattMJmegajouleMWmegawattMWhmegawatt-hourTWhterawatt-hourThispublicationhasbeenproducedwiththefinancialassistanceoftheEuropeanUnionaspartoftheCleanEnergyTransitionsinEmergingEconomiesprogramme.ThispublicationreflectstheviewsoftheInternationalEnergyAgency(IEA)SecretariatbutdoesnotnecessarilyreflectthoseofindividualIEAmembercountriesortheEuropeanUnion(EU).NeithertheIEAnortheEUmakeanyrepresentationorwarranty,expressorimplied,inrespecttothepublication’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thepublication.Unlessotherwiseindicated,allmaterialpresentedinfiguresandtablesisderivedfromIEAdataandanalysis.Thispublicationandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.IEA(2022),Trackingcleanenergyinnovation:FocusonChina,Allrightsreserved.IEAPublicationsInternationalEnergyAgencyWebsite:www.iea.orgContactinformation:www.iea.org/about/contactTypesetinFrancebyIEA–March2022Coverdesign:IEAPhotocredits:©Shutterstock

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