U.S.-China Economic and Security Review Commission, a body established by the United States congress, invited Professor Xiaolan Fu to testify on "the impact of China's Five-year Plans on Strategic Industries". Professor Fu's testimony spanned a wide range, from describing Chinese government's technology and innovation policy, to different firms' efforts in upgrading their knowledge capabilities, and the impact of China's five-year plans on innovation.
She points out that the 12th together with the 13th Five Year Plans will have significant impact on innovation in China, especially on the development of strategic industries identified in the Plans.
She also testified on the impact China's industrial transformation would have on the American economy, noting that it will not be a short time before China catches up to the US in innovation capacity. While US businesses might face increased competition, they will also benefit from the expanded pool of global knowledge as China increases rapidly its investment in R&D. As Professor Fu puts it, "US businesses should be confident about the dynamism and competitiveness of the US innovation system and the US economy". At the same time, "the US should collaborate more with China on innovation". "The collaborations between the US and China on innovation policy need not be limited to collaborative research; the collaboration can expand to wider areas along the innovation chain and in the innovation system".
With regard to Chinese firms' "go out" strategy, Professor Fu noted that it appears to be largely driven by firms' own strategic choices than government political decision. However, the objections received by the Chinese MNEs number more than objections to MNEs from other major emerging economies. Some discrimination might exist against Chinese MNEs, especially Chinese SOE MNEs and Chinese MNEs in the high-technology sector.