Editor's note: In China today, there is wide acknowledgement that innovation will have to play a key role in the country's economic development. At the opening ceremony of China's 3rd International Import Expo, Chinese President Xi Jinping yet again stressed the importance of innovation. Alessandro Teixeira, former Special Economic Adviser to the President of Brazil and a National Thousand Talent Distinguished Professor of Public Policy at China's Tsinghua University, working with China's tech companies in the past few years, shares his views on the country's tech ambitions. Views expressed in the video are his, and not necessarily those of CGTN.

CGTN: On November 3, China released the outline of its social and economic goals for the 14th Five-Year Plan (2021-2025, FYP) and its vision for 2035. What do you think are the main takeaways of the document?

Alessandro Teixeira: I think there is one main takeaway which is that China is on the right track. China has adopted the right strategy and this strategy is based on the commitment of deepening the reforms and opening-up, the modernization of China as a country, also a new industrialization process where you achieve a prosperous development with high-quality growth. What is important as well is improving the governance system, not just of China's domestic market, but also [how] China participates in the international governance system. I think these elements are what guarantee the future of China and the commitment of China.

CGTN: Both the document on the 14th Five-Year Plan and President Xi's speech at the 3rd International Import Expo (CIIE) highlight the great importance China attaches to technological development. What is your opinion on China's tech ambitions? 

Teixeira: I think this is a reality already. In the last decade, I would say that China has achieved a level of scientific and technological development that is unprecedented in the world. First because the Chinese commitment for science and technology, as President Xi Jinping has stated many times that innovation is a core engine of China's development path, and that's very, very important.

The second thing is the commitment of China to increase capabilities in terms of science and technology, so that means investment in education, investment in research; and those pillars have been followed by China very strictly.

Another important point that President Xi Jinping has mentioned is what we call the "two-wheel drive," meaning innovation and institutional innovation, and those two are very important [wheels]. Chinese is searching for modernization of the country, to be a leader in terms of science and technology, not just for economic purpose, but also for social purpose.

A good example of that is how China is developing their renewable energy sector, the environmental technologies. That is as a primary strategy for China to be in the next century, and in this century also, a leader in science and technology in the world.

CGTN: You have been working with Chinese tech companies. What do you think of China's tech and innovation scene?

Teixeira: I think at least in the last five years, the technology and innovation scene in China has changed a lot. In the last decade, we were talking about some innovation spots, innovation clusters in China; but nowadays the spreading of innovation and the innovation clusters are pretty much in every single place in China you can find.

One of the examples that I can give is in different locations. Like I said, in Xi'an, Shenzhen, Shandong, in all different provinces, you have companies that are searching for innovation.

So that's the reason why China now is the second country in the world in "unicorns." What I mean by "unicorns" are companies with valuation of over $1 billion. Out of the top five unicorn companies [in the world] that have valuations of over $1 billion, China has at least three companies. So that shows how China is impacting the innovation scene. So you can talk about innovation because you have a lot of entrepreneurship.

Second, if you go to fin-tech, the area where financial technology is booming in China, you have a lot of new companies trying to give applications, new business models that can help China enter new sectors. I can talk about IoT (Internet of Things). I can talk about big data. One of the unicorns that you have in China is called Meituan. Meituan started as a logistic company. But nowadays it is a big data company: it analyzes different markets. So as an example, China is the first country, I think, in terms of leveling and improving what we call knowledge-sharing economy.

Those are elements that show entrepreneurship fostering new ideas, new ventures. China is an entrepreneurial country, it is a science and technology country and it is becoming each day more science and technology and innovation-based country.

CGTN: What would be your advice on China's technological innovation?

Teixeira: I think that there are some challenges that China needs to go through. The first challenge, I would say, is to increase the interaction between research that is done at the university level and the private sector. Integrate more companies, or SOEs or private sector companies with Chinese universities and Chinese basic research. That's what I think is the first challenge.

The second challenge is to increase what you call "demand innovation," which is that customers tell companies how they want something and what they need in terms of new products and new services. And I think the third challenge, and the very important one, is that I see a lot of movement from the government to increase the funding for small and medium-sized enterprises, especially these small enterprises.

So we are talking about developing a venture capital sector, the sector that gives money to good ideas, that gives money to you to leave the university and have a good idea to start a company. That means that we don't need to have red tape. We need to access funding for these people who want to develop their ideas into projects and turn their projects into companies.

I think with those three elements, China is going to increase the number of innovations, is going to be one of the top countries in the world in terms of science, technology, and innovation.

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