NY Times article by David Barboza titled "China's Ambition Soars to High-Tech Industry:"
No longer content to be the home of low-skilled, low-cost, low-margin manufacturing for toys, pens, clothes and other goods, Chinese companies are trying to move up the value chain, hoping eventually to challenge the world’s biggest corporations for business, customers, power and recognition.
The government is backing the drive with a two-pronged approach: using incentives to encourage companies to innovate, but also moving to discourage low-end manufacturers from operating in southern China. That step would reverse one of the crucial engines of this country’s spectacular economic rise.
But by introducing tougher labor and environmental standards and ending tax breaks for thousands of factories here, the government has sent a powerful signal about its global ambitions, and helped encourage an exodus of factories from an area long considered the world’s shop floor.
President Hu Jintao hinted at China’s vaulting ambitions during a meeting of China’s scientific elite last June at the Chinese Academy of Sciences, where he called on scientists to challenge other countries in high technology. “We are ready for a fight,” he said, “to control the scientific high ground and earn a seat on the world’s high technology board. We will make some serious efforts to strengthen our nation’s competence.”
Government policies now favor high-tech economic zones, research and development centers and companies that promise higher salaries and more skills. A computer chip plant being built by Intel in the northern city of Dalian is welcomed; a textile mill churning out $1 pairs of socks is not.