The document discusses China promoting innovation and green development as twin strategies under its "New Normal" phase of economic development. It sets the following goals: increasing R&D expenditure to over 2.5% of GDP and reducing dependency on foreign technologies by 2020. Key areas of focus include developing industries efficiently with low carbon emissions, exploring green and smart urbanization, and vigorously developing smart buildings. China will also build a national innovation system, promote the "Made in China 2025" strategy, and establish market trading systems and an environmental monitoring network to achieve green growth. Challenges include changing government behavior and pushing the new model during an economic downturn.

1. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
New Normal Led by Innovation and Green Development
Presented by Zhaoyuan Xu On behalf of
Changwen Zhao
Development Research Center of the State council (DRC, China)
14 December, 2015

2. Contents
1. Innovation and green development should become the twin
strategies under the New Normal of China
2. Goal of China’s Innovative and Green Development Strategy
3. Promoting innovation and green development in a few key areas
4. China’s Innovative and Green Development Policies
5. Some Challenges for China in promoting the Green Growth

3. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
3
1. Innovation and green development should become the twin
most strategies under the New Normal of China
After over 30 years of rapid growth, China has entered a higher phase of
economic development which we called “New Normal”.
There are many new challenges on the way of transition to “New Normal”:
Shift from the quantity and speed-oriented model to quality and
efficiency-based model----Need shift to Innovation driven model
940 941
937
935 934 933 932 931 929
926
923
920
916
911
905
898
870
880
890
900
910
920
930
940
950
2010 2012 2014 2016 2018 2020 2022 2024 2026
million total labol force (aged 15-59)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013
growth rate of real investment (av.17.45%)
growth rate of non-farm employment(av.3.2%)

4. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
4
 Consumes too much of resources, which brought great pressure on
environment---Need Shift to Green Growth Model
In 2014, China has consumed 4.1 billion tons of coal, which is widely
believed to surpassed the Environmental bearing capacity limit.
In 2014, only 9.1% of total 161 Monitoring cities achieved the air
quality standard while more than 90% cities can’t meet the standard.

5. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
5
 Innovation and green will become the core factors of
national competitiveness
First, the all-dimensional innovative capacity will be the core
competitiveness. Ie. talent, technology, standard, information network,
database, software, intellectual property, platform and other factors,
technology and business model innovation.
Second, green growth will be a critical component of national
competitiveness
Third, the traditional labor of division system in the world is likely to be
reshaped.
Fourth, international trade will have major changes. 1) developing countries’
large-scale export trade is likely to be challenged, Digital manufacturing
will make scale of economy less important in some sectors. 2) the
proportion of trade in goods in international trade will decline. Key
links in digital manufacturing are very likely to be further concentrated
in developed countries.

6. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
6
2. The Goal set by Chinese Government
 By 2020, R&D expenditure should account for more than 2.5% of
China’s GDP,
basic research account for 10% of total research,
contribution by science and technology to economic growth be higher
than 60%,
dependency on foreign technologies be less than 30%,
every 10,000 people have 15 patents.
 By 2020, reduce carbon intensity by 40-45% on the basis of 2005
cut down the emission of SO2, NOx, by 8-10% on the basis of 2015
total energy consumption will be kept under 5 billion tons of standard
coal equivalent after coal consumption reaches its peak.
 By 2030, China’s environment will be remarkably improved
carbon emission will reached the peak level
on-fossil fuel, natural gas and other clean energies will account for over
one third of total energy consumption

7. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
7
PM2.5 ↓
25%
PM2.5 ↓
20%
PM2.5 ↓
15%
PM10 ↓ 10%
The Air pollution control target: 2012 to 2017
In 2013, The State Council Issued “Air Pollution Prevention and Control Action Plan”

8. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
8
3. Promoting innovation and green development in a few key
areas
 Blazing an efficient and low-carbon path to industrialization
ensure strict enforcement of related laws and standards
economic restructuring needs to be promoted. effectively address excess
capacity, vigorously develop modern services and emerging strategic
industries, and upgrade traditional industries with high technology.
A unified national carbon emission trading system should be established as
soon as possible.
 Exploring a green and smart path to urbanization
manage a compact city form in urban planning and construction
promote the extensive use of renewable and new energy
develop large-scale public transportation and introduce incentives to
encourage green transportation means of bicycle and walk
encourage the green and low-carbon buildings

9. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
9
 Vigorously developing smart buildings
strengthen standard setting. establish and improve the standards and rules
of designing and construction on green buildings and smart buildings
sorted out the existing construction, guide and encourage smart building
development based on market rules.
speed up the fostering of professionals in smart building designing,
technology and management
 Enhance energy efficiency management of the society
In 2011, China’s economic energy efficiency was USD 4.95 per
kilogram oil equivalent. In the same year, the global and OECD average
level was 47% and 70% higher than China respectively, and high-
income non-OECD countries also beat China by 22%
Enhancing energy efficiency management is the best solution to improving
energy efficiency

10. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
10
4. China’s Innovative and Green Development Policies
a. Build and improve a national innovation system
to fully coordinate and stimulate the innovation capacity of university,
enterprises, research institution
b. Promote the “Made in China 2025” strategy
“Made in China 2025” is Chinese version of Industry 4.0,as Chinese
Premier Li Keqiang said, “We will implement the 'Made in China
2025' strategy, seek innovation-driven development, apply smart
technologies, strengthen foundations, pursue green development and
redouble our efforts to upgrade China from a manufacturer of quantity
to one of quality.” encourage the green and low-carbon buildings

11. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
11
4. China’s Innovative and Green Development Policies
c. Coordinate the development of various market trading systems
and promote the market segment of environmental conservation
By 2020, a unified national trading market, such as the trading of energy
savings, carbon credit and renewable energy, will be completed
Market trading arrangements can reduce energy consumption at lower
cost and higher efficiency, increase the proportion of renewable energy,
reduce pollution and promote the transformation towards green
development
d. Build an ecological and environmental monitoring network
By 2020, this monitoring network will cover all over the national area,
monitoring major factors including the environment quality, Key
pollution sources, the ecological condition. Take use of the most
modern technology, this monitoring network will be on line and in time,
and all the data will be shared.

12. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
12
5. Some Challenges for China in promoting the Green Growth
a. The change for the behavior of the government
local government has long been accustomed to push the economy growth
by encourage of investment, while innovation driven model is so different
from the old way.
b. Push the new growth model in the context of down economic period
or even contraction period
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1990-03
1991-03
1992-03
1993-03
1994-03
1995-03
1996-03
1997-03
1998-03
1999-03
2000-03
2001-03
2002-03
2003-03
2004-03
2005-03
2006-03
2007-03
2008-03
2009-03
2010-03
2011-03
2012-03
2013-03
2014-03
2015-03
八五 九五 十五 十一五 十二五

13. DEVELOPMENT RESEARCH CENTER OF THE STATE COUNCIL
DRC
DRCDRC
Thank you!