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Foreign trade companies encouraged to invest in R&D

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Reference:CGTN | Updated:19 Oct 2020

China's 13th Five-Year Plan (2016-2020) is drawing to a close. One of its goals was to improve the quality of foreign trade. One pump company in Shanghai has benefited from a series of policies during the past five years that stimulated its technical innovation.

Pump and water supply systems are essential for residential and office buildings. The Sino-Korea Dooch Pump company in Shanghai is a newcomer which was set up in 2008. Its exports has grown by an average of 40 percent each year for the past five years.

"We didn't have a price advantage over domestic and overseas peers, so we could only win our market share by improving product quality. From the start, we aimed to compete with high-end Western brands," Xian Mingzhe, chairman of Shanghai Sino-Korea Dooch Pump MFG Co., Ltd., said.

The company invests about $900,000 in R&D each year, and has set up an innovation foundation to encourage technical improvement, thanks to a series of tax and burden reduction policies in recent years.

"The government has reduced taxes and other burdens on businesses during the 13th Five-Year Plan period. Companies have benefited a lot from that, and have more capital to invest in Research & Development," said Xian.

China's 13th Five-Year Plan has emphasized improvements to the quality and efficiency of foreign trade, and the need to continue building a powerful trading nation. The plan called for the strategy of "quality imports and exports", and promoted the transformation of foreign trade to "high quality and low price" and "quality imports and exports".

Innovation has become the driving force for Chinese economy, while IP protection and the application of innovation are still concerns of technical companies. Dooch has applied for more than 80 patents since 2016 and has won several industry awards. It even contributed to setting the national standard for one product. The company expects more government support.

"Innovating a new product or technology is just the first step. Bringing it to market and putting it to use is more important. We hope to see more industry guidance and policies to support this process, such as strengthening IP protection and more flexible financing channels for technological innovation," said Xian.

The company said countries in Asia-Pacific area will be No. 1 market, and it will explore the market opportunities along the Belt and Road route in the future. The company has invested about $75 million to build an intelligent factory in neighboring Zhejiang Province to produce for the overseas market. It is expected to open in 2021 with annual sales of $40 million.

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