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Press Release for Media Briefing by the Shanghai Municipal Government on April 21, 2020

April 22, 2020

The Information Office of Shanghai Municipality held a municipal government press conference today (April 21). Deputy Mayor Wu Qing introduced the relevant situation and the next step of the formulation of the “Regulations on Promoting the Construction of Science and Technology Innovation Center in Shanghai” (Hereinafter referred to as the “Regulations”). Zhang Quan, director of the Municipal Science and Technology Commission, introduced the main content of the “Regulations.” Peng Song, executive deputy director of the Science and Technology Innovation Center Development Office in Shanghai, Qiu Wenjin, deputy director of the Municipal Development and Reform Commission, Luo Peixin, deputy director of the Municipal Bureau of Justice, and Li Jun, deputy director of the Municipal Financial Supervision Bureau attended the press conference and jointly answered the questions from reporters.

(I )

1. The background and significance of the “Regulations”

Accelerating the construction of a science and technology innovation center with global influence is a major strategic task entrusted to Shanghai by the CPC Central Committee and the State Council. It is also an inherent requirement for Shanghai to be a great pioneer in reform and opening-up and a pioneer in innovation and development. In May 2014, when General Secretary Xi Jinping visited Shanghai, he made an important instruction that Shanghai “should speed up its march towards a science and technology innovation center with global influence”. In recent years, the construction of the science and technology innovation center in Shanghai has gone through several stages, including “consolidating foundation”, “making breakthroughs” and “deepening progress”. A multi-level innovation platform system has been basically formed, an open innovation space pattern has been fully expanded, a systematic layout of major innovation tasks has been continuously optimized, and the supporting laws for innovation and policy systems have been gradually improved. All these have laid a solid foundation for the formation of the basic framework of the science and technology innovation center with global influence this year. At present, Shanghai’s total R&D investment accounts for 4% of GDP, an increase of 0.35 percentage points from five years ago. The number of invention patents per 10,000 people reached 47.5, which was double that of five years ago. Shanghai’s overall science and technology progress index has always been ranked among the top in the country. The contribution of science and technology to economic development has steadily increased, and the ability to initiate science and technology innovation and its international influence has been bolstered.

The formulation of the “Regulations” provides a strong guarantee, in terms of the rule of law, for the implementation of major national strategies and ensures that major reforms are based on the laws. At the same time, the construction of the science and technology innovation center involves many fields such as science and technology, finance, fiscal, etc. In the process of deepening the initiative, new situations, new problems, and new needs are increasingly prominent. To solve the system bottleneck that hinders innovation, it is conducive to promoting science and technology innovation through institutional innovation, and transforming institutional advantages into institutional efficiency.

Since mid-January last year, in accordance with the legislative requirements of the Municipal People’s Congress, the Municipal Science and Technology Commission took the lead, together with the Municipal Bureau of Justice, the Science and Technology Innovation Center Development Office and other departments, to conduct extensive and in-depth research, thus forming the draft regulations for the Municipal People’s Congress to deliberate on. On January 20 this year, the regulations were passed at the third plenary session of the 15th Municipal People’s Congress, and will officially take effect on May 1. The Regulations define the basic framework for the construction of the science and technology innovation center at the legal level, while providing a basis for the formulation and implementation of related supporting systems, and accelerating the formation of institutional guarantee systems. The Regulations focus on embodying the concepts of “the most relaxed innovation environment, the most inclusive and fair support policies, and the most powerful guarantee measures” in the system design, reflecting clear reform and innovation orientation. The Regulations follow the key logics that support the development of innovation entities, capacity, areas and environment, by giving full play to the market’s role in allocating various innovation factors, and effectively allowing the government to play an active role in coordinating innovation activities, integrating innovation resources, and linking innovation fields, in a bid to stimulate the vitality and power of innovation in the whole society.

The Regulations made lots of firsts in legislation, with many highlights and innovations. The most prominent manifestations are as follows: First, the Regulations focus on the improvement of the ability to initiate innovation. The city is catering to the frontiers of world science and technology, major national needs, and the national economy. The city aims to improve the layout of scientific research, while optimizing policy orientation, development mechanism and conditions. The city is building national laboratories and comprehensive national science centers to improve the capability to initiate science and technology innovation. The city is giving priority to innovation in investment approaches, layout methods and management mechanisms. In terms of investment approaches, the city is not only supporting basic research in universities and research institutes, but also encouraging companies and social forces to increase investment in basic research. In terms of layout methods, the city is focusing on planning of technology innovation in key areas, highlighting common key technologies, cutting-edge leading technologies and modern engineering technologies. The city is tapping disruptive technological innovations to systematically promote the city’s technology innovation undertakings.

Second, the city is focusing on stimulating the innovation vitality of talent. The city is establishing and improving the mechanisms to cultivate, attract, use, evaluate, motivate and rotate talent in tandem with the development of the science and technology innovation center. The city is providing conditions and platforms for all types of talent in science and technology innovation to conduct innovation and start businesses. The city is creating an environment to attract all kinds of talent and allow them to fully unleash their potential. For example, employers are encouraged to improve their income distribution mechanisms, which should favor the value of innovation. The incomes of scientific research personnel should be closely linked to their job responsibilities, work performance, and actual contributions. As for the income distribution of talent, the Regulations clearly identify that labor costs and performance expenditures under competitive fiscal items, and incomes from technical development, technical consulting, and technical services should be not included in the total performance wages of scientific research institutions.

Third, the city is focusing on the cultivation of innovation entities by making more efforts in fostering innovation markets, developing social environment, and protecting intellectual property rights, while reducing procedures in administrative approvals. The aim is to provide incentives for all types of innovation entities to carry out innovation and entrepreneurship activities. For the first time, the city supports the development of new R&D institutions in the form of legislation, under which these entities can directly apply for registration, with a relaxed requirement on the proportion of state-owned assets. These institutions are entitled to the same treatment as scientific research institutions with regard to project application and professional title evaluation. Scientific research institutions are empowered to have more freedom in recruitment of talent, use of headcount, evaluation of professional titles, set-up of functions, establishment of research projects, and transformation of achievements.

Fourth, the city is focusing on creating an innovation atmosphere that tolerates failure. The Regulations clarify the relevant systems for science popularization, commendation and rewards, research integrity, and research ethics. The Regulations have for the first time proposed institutional arrangements for the ethical risks brought by the development of new technologies. According to the Regulations, entities and individuals who have not reached their intended purpose, but have fulfilled their duty of diligence and responsibility, have not sought illegal benefits, and have not violated the integrity of scientific research, shall not be negatively evaluated.

Fifth, the city is focusing on the construction of innovation carriers. By focusing on Zhangjiang and speeding up the construction of Zhangjiang Science City, the city is leading the construction of several key centers in science and technology innovation, and giving play to comprehensive policy advantages in these key areas, pilot free trade zone, Lingang area, and the Yangtze River Delta integrated ecological demonstration zone. The city is expanding domestic and international cooperation, promoting mass entrepreneurship and innovation, and beefing up city-wide innovation in an all-round manner.

2. Work plan and considerations for implementing the Regulations

It is necessary to effectively and strictly implement the Regulations to provide guarantee and support for accelerating the construction of a science and technology innovation center with global influence.

First, the city needs to further strengthen publicity and interpretation of the Regulations, and create a good environment for the rule of law. The Regulations, together with “22 Articles of Science and Technology Innovation”, “25 Articles of Science and Technology Reform”, and other supporting policies, have established a system of science and technology innovation policies and regulations with a full range of categories and diverse tools. All relevant departments and districts should consider their own situations, grasp the key aspects, and carry out comprehensive, multi-level, and targeted learning and training programs. At the same time, we will make full use of the Internet, new media and other channels to organize policy interpretations to enable all types of innovation entities to understand relevant measures in a bid to support innovation and actively create a good legal environment and social atmosphere.

Second, the city will further form a joint force to increase the intensity of implementation. The construction of the Shanghai science and technology innovation center is a systematic project that involves a wide range of fields, a long innovation chain, and a high degree of relevance. It is not only a matter for science and technology management departments, but also requires the support and cooperation of relevant departments and districts to jointly promote the implementation of the Regulations. The city’s relevant departments will cater to the tasks they undertake to focus on the fields of science and technology, finance, industry, and talent, so as to  draft and formulate implementation rules, and promote the implementation of the Regulations. Regarding the issues that are not addressed by the law and the emerging new situations and new requirements, relevant departments and districts will conduct timely research, make bold innovations, and try first, so as to give full play to the leading guarantee role of the Regulations.

Third, the city will further evaluate the actual effectiveness and make continuous follow-up investigations. The promulgation and implementation of the Regulations will be a new starting point for the improvement of the relevant policies and guarantee system for the establishment of the science and technology innovation center. After the implementation of the Regulations, we will continue to track the implementation of the system, conduct timely assessment, and discover, analyze and solve actual problems based on the world’s new trends, the nation’s new requirements, and the new developments in other provinces and cities. We will continue to promote legislative research and system innovation, in a bid to provide a good legal guarantee for the construction of the science and technology innovation center.

(II)

I.Positioning and General Ideas of the Regulations

In terms of positioning, the Regulations serve as the "basic law", guarantee law and promotion law of the city’s construction of the science and technology innovation center. With a focus on enhancing innovation and originality, the Regulations make systematic and institutional arrangements for comprehensive innovation with science and technology innovation as the core.

In terms of guiding principles, the Regulations strive to embody the requirements of creating “the most relaxed innovation environment, the most inclusive and fair support policies, and the most powerful guarantee measures”.

First, the fundamental purpose of the Regulations is to stimulate and guarantee the vitality and motivation of all kinds of innovative entities. The Regulations aim to clarify the responsibilities of government departments (the main promoting body) in the construction of the science and technology innovation center, as well as the rights of various innovative entities, stimulate the vitality and motivation of various innovative entities, and mobilize the whole society to participate in the construction of science and technology innovation center.

Second, the Regulations combine the declaration of goals with operational measures. When defining objectives, key measures and major tasks, the Regulations pay more attention to operability, by detailing the contents as much as possible, and proposes a forward-looking direction to those not yet available with detailed requirements, in order to provide support for future reform.

Third, the Regulations highlight Shanghai's basic situation and characteristics. The city shall make full use of its advantages of a high level of opening-up, comprehensive industrial categories, the positive interplay between the construction of the science and technology innovation center and the financial center, further promote the construction of an innovation ecosystem to cultivate new advantages of Shanghai's science and technology innovation.

II.Main Framework and General Ideas of the Regulations

In the conception of the overall framework of the Regulations, innovation entity is the core force of the construction of the science and technology innovation center; innovation ability is the core content of the construction of science and technology innovation center; innovative talent, carriers, and financial technology are the core elements of the construction of science and technology innovation center; At the same time, the construction of science and technology innovation center also needs intellectual property protection, innovative culture, integrity and ethical supervision, as well as the other ‘soft’ environmental support such as a social atmosphere that encourages innovation and tolerate failure. Therefore, following the overriding logic of "recognizing the entities of construction, clarifying the content of construction, highlighting the support of core elements, and promoting the formation of an innovative ecology", the Regulations include the following contents:

There are 9 chapters and 59 articles in the Regulations, of which the general and supplementary provisions clarify the objectives, entities, and time of the construction of the science and technology innovation center (11 articles in total); Chapter 2 and Chapter 3 reflect the institutional needs of innovation entity construction and innovation capacity building (18 articles in total); The fourth chapter hones focus on Zhangjiang, defining it as the core carrier and leading force of building Shanghai into a science and technology innovation center (5 articles in total); Chapter 5 focuses on spurring the motivation and vitality of innovative talents (6 articles in total); Chapter 6, Chapter 7 and Chapter 8 put forward financial support, intellectual property protection and guarantee measures in environmental construction (19 articles in total). The Regulations highlight the following key contents:

(1) Fully stimulate the vitality and motivation of all kinds of innovative entities. First, the city shall help enterprises with scientific and technological innovation. This should be achieved by nurturing high-tech enterprises, provide R&D subsidies, implement accelerated depreciation of R&D equipment and additional deduction of R&D expenses, as well as introduce preferential policies of income tax for high-tech enterprises, in order to provide fair and inclusive support to enterprises' scientific and technological innovation activities. Second, the city shall give more liberty to science and research institutions, and expand the autonomy of scientific research institutions in personnel selection, use of authorized headcount, professional title review, salary distribution, institutional settings, setup of scientific research projects, equipment procurement and handling of academic achievements. Third, the city shall foster new R&D institutions, make innovative arrangements in company registration, project declaration, professional title review, personnel training and financial support, and support the development of new R&D institutions with diversified investment entities, market-oriented operation and modern management mechanisms. Fourth, the city shall promote collaborative innovation among all kinds of entities, promote joint researches among all kinds of innovative entities, and give full play to the coordination and service role of scientific and technological service institutions and scientific and technological social organizations in collaborative innovation.

(2) Comprehensively enhance the ability of scientific and technological innovation, in the face of world-leading scientific and technological frontiers, the country’s major needs and the main battlefield of the national economy. First, the city shall enhance the original innovation ability, strengthen basic research, applied basic research and technological innovation as a whole; improve the classification mechanism of scientific research projects and support the research projects that have yet to reach consensus; build major scientific and technological infrastructure, support the development of national laboratories and build strategic scientific and technological strength. Second, the city shall enhance the transformation of scientific and technological achievements, endow scientific researchers with ownership or long-term right of use for scientific and technological achievements, establish and improve the supervision mechanism of State-owned intangible assets, build a functional platform for R&D and transformation, and enhance the transformation efficiency of technological achievements. Third, the city shall strengthen the ability of industrial innovation, improve industrial layout, promote the aggregation development of emerging industries, and promote the large-scale application of innovative products by means of prioritized purchase, ordering and government procurement of services. Fourth, the city shall enhance the ability of innovation, opening up and cooperation, strengthen all-round, multi-level and wide-ranging exchanges and cooperation in scientific and technological innovation at home and abroad, build a regional innovation community in the Yangtze River Delta, encourage the development of relevant innovation organizations, or participate in major international scientific plans and projects, in a bid to actively integrate into the global network of scientific and technological innovation.

(3) Promote the aggregation of innovative elements, strengthen the allocation of innovative resources, and form all-round support for the construction of the science and technology innovation center. First, the city shall improve the spatial layout of the construction of the science and technology innovation center, and provide comprehensive service to science and technology innovation center carriers that are with complete functions, suitable for innovation and entrepreneurships, and are of different characteristics. Efforts should be made to build the ‘Zhangjiang’ brand and form a regional innovation pole of international influence. Second, the city shall build a highland for scientific and technological innovative talents, establish and improve the mechanism of personnel training, introduction, use, evaluation, incentivizing and mobility, implement an income distribution mechanism guided by the addition of knowledge value, provide conditions and platforms for all kinds of scientific and technological innovative talents to innovate and start businesses, and create an exhilarating development environment that satisfies local talents, draws talents from afar, and gives all talents full play. Third, the city shall promote the linkage between the role of science and technology innovation center and the role of financial center, encourage commercial banks and other financial institutions to serve enterprises, encourage all kinds of capital to participate in investment, promote the development of multi-level capital markets, set up policy-based financing guarantee funds for small and medium-sized enterprises in order to enable finance to promote scientific and technological innovation.

(4) Create a sound ecological environment for scientific and technological innovation. First, the city shall strengthen the protection of intellectual property rights, improve the comprehensive management system of intellectual property rights, optimize the evaluation and early-warning system, strengthen administrative and judicial protection, and promote the integration of intellectual property rights and scientific and technological innovation. Second, the city shall carry forward the scientific spirit, communicate scientific ideas, advocate scientific methods, popularize scientific knowledge, in order to promote the integration of innovative culture, innovative spirit and innovative value and inject them into the city’s spirit. Third, the city shall strengthen the management of scientific research credibility and the supervision of scientific and technological ethics, improve both the incentive and punishment mechanisms, construct the governance system of scientific and technological ethics, and clarify the values, social responsibilities and behavioral norms that scientific and technological workers and their communities should abide by. Fourth, the city shall create a social atmosphere to encourage innovation, exercise inclusive and prudent supervision over new technologies, new industries, new formats and new models. In accordance to the laws, entities and individuals should be exempt from relevant responsibilities if they act with diligence and responsibility in the process of promoting scientific and technological innovation, do not seek illegal interests, or do not violate the integrity of scientific researches.