At the Fifth Plenary Session of the 16th Central Committee of the Communist Party of China, which recently concluded, the Central Committee approved the "Proposal for the 11th Five-Year Plan for National Economic and Social Development" (hereinafter referred to as the "Proposal"). This document outlines the development goals for China during the "Eleventh Five-Year Plan" period and emphasizes the "Six Musts." According to authoritative analysts, while innovation has long been a priority, the key contribution of the "Proposal" is linking "innovation" with "autonomy" and elevating it to the level of a national strategy. This will serve as a crucial roadmap for accelerating China’s socialist modernization and will have a lasting impact on the country's future.
As one of the core industries in China, the automotive sector plays a vital role in the growth of independent brands. With the national strategy emphasizing "independent innovation," what effects will this have on auto companies, and how are they responding? Recently, reporters spoke with experts and company officials to explore these questions.
Many company leaders hope that the "Proposal" will be effectively implemented to boost R&D enthusiasm. Soon after the session, a senior executive from a state-owned automaker told reporters that the nation has clearly emphasized independent innovation, and they believe this will greatly promote the development of the entire automotive industry chain, serving as a positive example for auto companies.
The executive expressed hope that relevant departments and local governments would quickly implement policies encouraging independent innovation, helping enterprises address practical challenges in their R&D efforts.
Another company representative, who preferred not to be named, explained that under current Chinese tax law, R&D expenses are treated as current-year costs, which can negatively impact short-term profits. Since corporate performance is often evaluated based on profit and tax contributions, this could dampen managers' motivation to focus on independent research and development.
A company official provided an example: when a prototype developed in collaboration with foreign partners is shipped back to China, tariffs are applied, increasing the cost of self-development. He noted that the existing R&D incentive mechanisms are incomplete, and policies supporting R&D are still lacking, which may raise the difficulty and cost of independent innovation.
The company hopes the "Proposal" will help address the issue of insufficient R&D funding. It is reported that, in the first half of this year, the growth rate of R&D spending for key enterprises exceeded 30%. According to data from the National Development and Reform Commission, the proportion of independent innovation in corporate technological activities has continuously increased. This is reflected in areas such as R&D funds, personnel, projects, and patent applications. R&D investment has grown by over 30% compared to the same period last year, accounting for 61.31% of total science and technology funding. The automotive industry has also consistently increased its R&D investments, with domestic R&D spending rising since the start of the year. On average, R&D investment reaches about 3% of sales revenue, with some companies and regions investing even more. However, experts argue that this level is still far from sufficient. Many auto companies cite a lack of R&D funding as a major obstacle to independent innovation.
Currently, most R&D investments come from internal funds and reinvestment. An R&D director from a company stated that auto firms must compete with numerous joint-venture and foreign brands while also focusing heavily on independent R&D—something that is extremely challenging.
A marketing department manager shared that the state applies different tax rates to joint ventures and state-owned enterprises. While the policy is reasonably considered, the question remains: how does it reflect support for independent brands? The manager suggested that support for state-owned enterprises should also be taken into account.
Experts agree that independent innovation should focus on differentiation and rationalization. During interviews, company representatives generally supported the concept of independent innovation proposed at the session. They hope that new systems will be established to encourage enterprise-led innovation, create a favorable consumer environment for independent brands, and foster supportive policies for their development.
Teng Bole, Secretary General of the China Automobile Industry Advisory Committee, said that the "innovation" highlighted at the session should prompt new thinking about innovation. He emphasized that merely increasing R&D investment is not enough; companies must also focus on training, selecting, and motivating R&D personnel. Additionally, converting R&D investment into productivity is essential. Beyond talent innovation, he believes that innovation must also occur in technology and systems. Enterprises should explore models aligned with the circular economy and pay attention to the rationalization and differentiation of innovation. Innovation and development should be combined with regional economies, leveraging complementary advantages across industries.
Independence and innovation have always been sensitive and important topics for enterprises. At this stage of industrial development, elevating independent innovation to a national strategy helps build a platform for innovation and fosters a public opinion environment conducive to it. This will be highly beneficial for the growth of independent brands in the automotive sector.
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