The history of modernization is in essence a history of scientific and technical progress. China has made great achievements in basic science and technological innovation. High-tech industry has experienced rapid growth, accounting for over 15 percent of the manufacturing industry.

We can take Beijing as an example: high-tech industries have become a new sector for the city's economic growth. During the Tenth Five-Year Plan, Beijing carried out a series of projects featuring important innovations. Centred on the Zhongguancun Science Park (Silicon Valley in China), the city built up a new system for scientific innovations in the capital region, integrating the city's scientific resources and making it a leader in sharpening the city's competitive edge.

With the great efforts made during the Tenth Five-Year Plan, Beijing has established a multilayered, multidimensional legal framework for science-related policies and regulations. The service system for business set-ups was strongly improved. A group of innovative enterprises with big effects emerged.

A new pattern was formed involving universities and enterprises vying in competitions and cooperative projects, with various innovative agencies developing on their own. Scientific innovation and the development of the capital city became more intermingled. Beijing's expenditures on research and development (R&D) increased by 30 percent annually, accounting for 5 percent of the regional total output value. Service industries, represented by information transmission, computer services, software, scientific research and technological services, created huge added values. In 2004, they realized added values of 78.3 billion yuan (US$9.79 billion), accounting for 12.9 percent of the city's GDP, thus becoming a new sector for Beijing's economic growth.

In 2005, Beijing's R&D expenditures were 38 billion yuan (US$ 4.75 billion), an increase of 20 percent over 2004. During the Tenth Five-Year Plan, the accumulated R&D expenditures rose to 134.39 billion yuan (US$ 16.8 billion), 2.1 times more than in the Ninth Five-Year Plan. Beijing had 7,400 institutions that conducted scientific research, with 340,000 people engaged in scientific activities, increasing 1.2 times and by 30.3 percent over the figures for 2000.

About 84,000 and 40,000 patent applications and approvals were reported, increasing by 1.2 times and 77.8 percent more than under the Ninth Five-Year Plan. Beijing signed 38,000 technological contracts, with a total contracted trade volume of 48.96 billion yuan (US$ 6.12 billion). During the Tenth Five-Year Plan, the number of signed technological contracts was 156,000 and trade volume reached 159.22 billion yuan (US$ 19.9 billion), increasing by 71 percent, 2.8 times more than during the Ninth Five-Year Plan.

As a result of Beijing, we can see transformation into a high-tech economy, and the first thing that we should do is promoting innovation, and the first step should be the establishment of the innovation environment. Innovation environment mainly involves legal system, policies, conditions, culture and so on. In simple words, good innovative environment involves two aspects: first, innovation is conditional; second, innovation is beneficial. Specifically speaking, it means the stimulation of innovation enthusiasm, realization of innovative ideas, spiritual respect of and economic compensation to those who devoted to innovation, etc. Innovation environment construction involves government departments, universities and colleges, research institutes, financial institutes and enterprises.  

To build up scientific legal system, it is urgent to make amendment to the law so as to maintain better orders in the science and technology industry. In addition, formulation of laws concerning high-tech zones should be strengthened. 

To strengthen investment and management, Central and Local Governments and high-tech zones should set up special administrative departments. 

To give full play of governments’ leading roles and build up innovation evaluation system, Government should build up innovation evaluation system and rewarding measures. 

To enhance cooperation among enterprises, universities and research institutes, Government should establish technological innovation system that stresses the principle place of enterprises as well as cooperation among enterprises, universities and research institutes. They should also offer top scientific achievements and advanced research, experiment platforms and talents resources guarantee to enterprises through sharing of technological resources and human resources with higher education institutes and scientific research organizations.
 
To take effective measures and improve investment and financing service, Government should formulate sound supporting policies concerning property rights transaction, establish effective entering and withdrawal mechanism and make policies to encourage investment by all kinds of investors.

To strengthen management and build up high level technological incubating platforms, as the development of high-tech zones during these years proved that it is an important means of promoting technological achievements, enhancing innovation ability and improving innovation system and incubating platforms. Meanwhile, incubating service should be improved to offer management consultation, investment and financing, business-starting training and technology transfer.
 
To construct a internal innovation system and innovation culture of enterprises, as one important aspect of innovation in high-tech zones is to stress the principle place of enterprises in innovation so as to increase their sense of commission and motivation. First, input should be increased in research. The innovation level of an enterprise lies on staff’s initiative, which demands input in research and establishment of research teams and construction of research platforms. Second, independent innovation administrative institutes should be set up. Government should separate administrative function from research institutes to focus on policy-making, IP protection and staff initiative enhancement. Third, distribution system should be reformed and flexible distribution mechanism should be established to make the most of talents and benefit in the long run.
 
Innovation culture is an all-round demonstration of innovation policy, innovation system, innovation activities and innovation environment. Good innovation culture is the foundation for output of innovation talents. Government should initiate innovation culture in enterprises and help enterprises shake off pessimism, flippancy and dependency.

I firmly believe that science is the ultimate revolution. At a time when the current global financial turmoil is dealing a heavy blow to the world economy, it has become all the more important to rely on scientific and technological progress to promote growth in the real economy. As for China, the most foundational way to transform it into a high-tech economy in my opinion is to encourage the learning and application of science and encourage the pursuing of innovation among the general public.