BEIJING, Feb. 13 -- A long list of renowned multinational companies, including Microsoft, IBM, Motorola, Siemens, Nortel, GE, GM, Volkswagen and Honda have established research and development (R&D) centres in China, according to the Ministry of Commerce.

    "China encourages multinationals to establish R&D centres in China," said President Hu Jintao at the National Science and Technology Conference held early this year.

    According to statistics from the Ministry of Commerce, about 750 foreign-funded R&D centres have been set up in China, which are mainly located in such large cities as Beijing, Shanghai and Shenzhen.

    Most foreign-funded R&D centres in China are in the fields of electronic and telecommunications equipment manufacture, transport equipment manufacture, medicine production and chemical industry, the Ministry of Commerce said.

    Although most foreign-funded R&D centres are still focused on application technology, some such as Microsoft, Nokia, Bell-Alcatel and Panasonic also conduct basic R&D work and have become global centres of those business mammoths.

    Li Wanlin, senior vice-president of the Siemens (China) Telecommunication Ltd, said the establishment of Siemens China R&D centres is a vitally important strategy for the German company's future development.

    Multinationals have increased their investment in R&D centres in China by a large margin, as the market here becomes more important to their global business strategy.

    Some global business giants, such as GE, Philips, Motorola and Siemens, invest tens of millions of US dollars in R&D centres in China, the Ministry of Commerce said.

    Lu Zheng, a recognized economist who heads the Chinese Academy of Social Sciences Institute of Industrial Economics, said: "By attracting more and more localized foreign R&D centres, China moves up in the hierarchy of the global economy."

    The establishment of these foreign-owned R&D facilities with their employees flowing freely in the Chinese job market, stimulates technological upgrades in Chinese companies and helps to improve the innovative capability of native engineers.

    In some foreign-invested R&D centres, figures show more than 90 per cent of their employees are Chinese staff, including returned overseas students.

    Some centres including GE, Bell-Alcatel and Motorola have enhanced co-operation with local institutes and universities. The sharing of intellectual property rights and other research achievements helps China increase its innovation capacity, according to the Ministry of Commerce.

(Source: China Daily)