Innovation Without Borders: The PRC’s Use of Offshore Bases
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Executive Summary:
- The People’s Republic of China (PRC) has set up a number of offshore innovation bases to acquire technologies in support of its ambitions for technological dominance and national rejuvenation.
- “Offshore innovation bases” in the PRC, mostly located in special high-tech development zones, collaborate with leading US universities, research and development centers, and united front organizations to attract overseas talents and experts to contribute to the country’s innovation and development.
- One base in Beijing describes its aim as using its international collaborations to foster indigenous innovation “by exceeding the performance and cost-effectiveness of its competitors and breaking the United States’s monopoly” in targeted fields.
On November 7, the People’s Republic of China (PRC) Ministry of Commerce published a notice titled “Several Measures to Support Suzhou Industrial Park in Deepening the Comprehensive Experiment of Open Innovation (支持苏州工业园区深化开放创新综合试验的若干措施).” This document is intended in part to support the industrial park in building a number of “offshore innovation centers (离岸创新中心)” and, in doing so, to cement its role as a regional hub for science and technology innovation (PRC Ministry of Commerce, November 21).
This is not the first time Beijing has promoted the idea of “offshore innovation” to attract foreign resources and talent for its benefit. Since 2015, the PRC has been experimenting with “overseas talent offshore innovation and entrepreneurship bases (国家海外人才离岸创新创业基地),” which can also be translated as “offshore innovation bases” or simply “offshore bases,” of which there are 30 as of May 2024 (China Education News Network, May 13). These offshore innovation bases are part of the Haizhi Plan (海智计划), which targets overseas experts in technical fields to enhance the PRC’s development and help achieve national strategic objectives. [1] They emphasize the principle “focus not on location, but on contributions; focus not on ownership, but on utility (不求所在、但求所为；不求所有、但求所用),” aiming to facilitate the flow of innovation resources and the flexible introduction of overseas talent (China Education News Network, May 13). This system of innovation hubs, which are effectively platforms for technology transfer, has flown under the radar to date, but the way they operate and their connections to the United Front system suggest that they warrant scrutiny.
Offshore Innovation Bases Support National Strategy
Over the last decade, overseas talent bases have emerged through a combination of central government directives and local experimentation. The State Council published opinions in July 2017 and September 2018 that called for the construction of offshore innovation bases (PRC Central Government, July 27, 2017, September 18, 2018). [2] As part of the Haizhi program, most of these bases have been established in free trade zones and high-tech industrial development zones through collaborations between the China Association for Science and Technology (CAST; 中国科学技术协会) and local governments. The original Haizhi program was launched in 2004. Over a decade later, in 2015, trial bases were set up in Shanghai, Shenzhen, Wuhan, and Suzhou. [3] The aim of these local experiments was to create a platform for recruiting international talent, incubating startups, and supporting professional services (Chinese Preventive Medicine Association, June 6, 2016; Fujian Taiwan Affairs Office, May 12, 2017).
Bases are required to establish cooperative relationships with at least 20 reputable overseas institutions and maintain a network of at least 500 overseas science and technology professionals to be classified as overseas talents offshore innovation and entrepreneurship bases (Fukang People’s Government, July 28, 2023). Offshore innovation bases involve collaborations with overseas entities such as universities, companies, and united front organizations, depending on each region’s specific needs and strategic priorities.
The bases are part of the PRC’s broader pursuit of its strategic goals through acquiring foreign technology and accessing international expertise. As stated in the 13th Five-Year National Science and Technology Innovation Plan, “strengthening the construction of offshore entrepreneurship bases for overseas scientific and technological talent (加强海外科技人才离岸创业基地建设)” is part of a plan to “build a world-leading science and technology powerhouse (建成世界科技强国)” and achieve national rejuvenation (PRC Central Government, August 8, 2016). This was echoed in October 2018 by the vice chair of the All-China Federation of Returned Overseas Chinese (中华全国归国华侨联合会), a united front organization, who stated that the bases offer an opportunity for overseas talents to support national rejuvenation (China Net, October 17, 2018).
The bases are often located in special industrial zones, which the PRC government has set up for similar reasons. The 14th Five-Year Plan for National High-Tech Industrial Development Zones (‘十四五’国家高新技术产业开发区发展规划) encourages the growth of new development zones based on models such as “overseas research and development for domestic transformation, and overseas incubation for domestic acceleration (海外研发—国内转化、海外孵化—国内加速).” In other words, strengthening connections with international innovation hubs and economic cooperation zones to advance the PRC’s goals (PRC Central Government, September 21, 2022 ).
Suzhou Industrial Park Ties to Harvard, MIT, UC Irvine
Offshore bases collaborate with foreign universities to set up offshore innovation centers. For example, Suzhou Industrial Park works with Harvard University to run the Harvard Weitz Innovation Hub, which was launched in January 2017 with the aim of cultivating over 100 projects and establishing a group of world-leading biotechnology companies (SIP, January 20, 2017; Free Wechat, August 5, 2017). David Weitz, Professor of Physics and Applied Physics at Harvard University, initiated the project. Weitz is a member of the National Academy of Sciences, the National Academy of Engineering and, in 2019, was selected as well as a foreign member of the Chinese Academy of Chemistry (CAE, accessed December 18). Under his advocacy, in July 2017, Suzhou Industrial Park signed a cooperation agreement with the Harvard John A. Paulson School of Engineering and Applied Sciences to establish a China-Suzhou Offshore Innovation and Entrepreneurship Base at Harvard’s main campus (Jiangsu Proprietary Technology Exchange Center, March 29, 2018; Sohu, June 23, 2018).
Suzhou Industrial Park has also set up an overseas base at MIT’s Computer Science and Artificial Intelligence Laboratory (Jiangsu Proprietary Technology Exchange Center, March 29, 2018). This “base” likely constitutes a multi-year research collaboration between the two institutions. According to MIT reports in 2017–2018, the collaboration focused on advancing the theoretical foundations of artificial intelligence (AI) (MIT, accessed November 26). One project under this collaboration was led by Daniela Rus, the director of the AI lab at MIT, who is also a trustee of the Mohamed Bin Zayed University of Artificial Intelligence—a research institution in the United Arab Emirates with extensive links to the PRC’s military university ecosystem. Rus also co-founded Venti Technologies (苏州风图智能科技有限公司), an Al-powered autonomous vehicle company based in the Suzhou Industrial Park (Sohu, November 20, 2019; China Brief, August 15; CSAIL, accessed November 26). The industrial park was listed as a sponsor of the MIT lab until at least 2021 (MIT, accessed December 18).
Suzhou Industrial Park has also set up the Los Angeles Overseas Innovation Incubation Center at the University of California, Irvine. Established in 2019 by EcoKMC, a financial service company with an accelerator in China, the center supports technology transfer, business incubation, and market expansion to founders interested in settling in Suzhou (2500sz.com, January 17, 2022; SOECC, January 21, 2022; EcoKMC, accessed November 26). Its strategic partner network comprises numerous investment institutions and research organizations that it helps bring to Suzhou (SOECC, January 21, 2022; Liepin, accessed November 26). Catherine Zhou (周清理), a member of the board of directors of the Beall Center for Innovation and Entrepreneurship at UC Irvine’s business school and the CEO of EcoKMC, runs the center (UC Irvine Paul Merage School of Business, November 6, 2018; UC Irvine, Accessed November 26; LinkedIn/EcoKMC LLC, accessed December 18). Zhou has also interacted with the Chinese Communist Party’s (CCP) united front system (2500sz.com, January 17, 2022). She was part of a delegation of the American-Chinese CEO Society that participated in united front events hosted by the Shanghai Federation of Returned Overseas Chinese and by a standing committee member of the Chinese People’s Political Consultative Conference—the united front’s central coordinating institution. Zhou has also previously been invited to attend a reception hosted by the PRC consulate general in Los Angeles (The Chinese American Professors and Professionals Network, January 26, 2023; Huarenca, February 24, 2023; Nasdaq.tv, February 25, 2023).
Beijing Base Targets Tech Transfer
In December 2022, the Beijing Economic-Technological Development Area (BDA), one of the offshore innovation bases, recognized six overseas research and development institutions as its overseas offshore innovation centers, completing an accreditation process for them (BDA, December 30, 2022). One of these institutions is the US research and development center of Synaptic Medical, a medical technology company. Beijing describes the center as leveraging the United States’s advantages in research and development strengths and the PRC’s clinical needs to develop treatments for heart arrhythmia (BDA, April 12, 2023). Through its US-based center, the company gained authoritative clinical insights from working with some of the most highly skilled doctors currently treating this cardiovascular condition (Beijing-China, January 13, 2023; PitchBook, accessed November 27).
The center aims to “realize domestic substitution in this field by exceeding the performance and cost-effectiveness of its competitors and breaking the United States’s monopoly (将以超越竞品的性能和性价比抢占市场，打破美国技术垄断，实现该领域的国产替代),” according to an article on the development area’s website (BDA, April 12, 2023). This clearly articulates Beijing’s wider strategy to encourage technology transfer to become more self-reliant and achieve its technology goals. Strengthening the research and development of precision medicine and other medical technologies is one of the nine “major projects (重大项目)” in the 13th Five-Year National Science and Technology Innovation Plan.
Silex Microsystems, a world-leading micro-electromechanical systems manufacturer based in Sweden, is another company that was recognized as Beijing’s offshore innovation center in December 2022. The company was acquired in 2016 by the partially state-owned Sai Microelectronics Inc (SMEI), in which the National Integrated Circuit Industry Investment Fund (also known as the “Big Fund”) is invested (365PR.net, September 30, 2020; Silex Microsystems, accessed November 27). Although Sweden’s Inspectorate of Strategic Products banned the export of Silex’s technologies to Beijing in October 2021, the person in charge of Silex Beijing has stated that the recognition of the offshore innovation center “will effectively promote technical and personnel exchanges between Beijing and Sweden, accelerate the assimilation and adoption of advanced foreign technologies, and facilitate the domestic application and commercialization of technological achievements” (Sohu, October 8, 2021; Beijing-China, January 13, 2023). This suggests that technology transfer is still taking place.
United Front Organizations and Individuals
Offshore innovation bases collaborate with overseas united front organizations and individuals to connect with overseas experts. In 2017, the base in Wuhan worked with Sun Youshun (孙友顺), a united front-linked individual who has claimed to be an MIT professor, to set up a branch in Boston to foster relevant connections and facilitate technology transfer (Chengdu University of Technology, April 15, 2011; Hubei Association for Science & Technology, February 13, 2017; Sohu, October 29, 2017; GCTV, March 9, 2019). [4] Sun is also the founder of the Eastern US Innovation and Entrepreneurship Alliance (美东创新创业联盟), an organization committed to facilitating the localization and development of high-tech projects owned by overseas high-level talents (Zhengzhou High-tech Industrial Development Zone Management Committee, April 30, 2019). In November 2023, the organization signed a strategic collaboration agreement with the Tianjin offshore innovation base to expand its recruitment channels (Tianjin Municipal People’s Government, January 4). Sun is also an expert committee member of the Jilin Federation of Returned Overseas Chinese (Jilin Province FROC, July 25, 2017). The Tianjin base also works with a number of other overseas united front organizations. [5]
Beyond Wuhan and Tianjin, other offshore bases also work with united front organizations. For instance, Shanghai works with the Chinese Association for Science and Technology USA (中国旅美科技协会), the All-Japan Federation of Overseas Chinese Professionals (中国留日同学总会), and the New Zealand China Council for the Promotion of International Trade (新西兰中国国际贸易促进委员会) (CHRDC, September 8, 2016; Sohu, December 12, 2017; The Paper, May 7). Meanwhile, the base in Chengdu works with organizations such as the SoCal Association for Biomedical and Pharmaceutical Advancements (美中生物医学与制药协会) in San Diego and the Canada China Club (加拿大华创会) (Sichuan Online, July 11, 2017; China News, September 22, 2017).
Conclusion
Across the 30 offshore bases throughout the PRC, each employs slightly different approaches to attract foreign expertise and technical investment. The overarching goal of the bases, however, remains consistent: leverage global resources and talent in the service of the country’s global ambitions. Through partnerships with world-leading universities, research and development centers, and united front organizations, the bases serve as a critical tool for acquiring technology from overseas and indigenizing it. No research exists to date into the potential dual-use nature of technologies developed through such collaborations, the effect of the bases on foreign entities, or the national security implications of such operations. As this preliminary study suggests, to the extent that such collaborations further PRC strategic objectives, as they are explicitly intended to, the end results are unlikely to be positive for the Western companies and universities involved.
Notes
[1] The Haizhi Plan is also known as the “Help Our Motherland through Elite Intellectual Resources from Overseas” (HOME) Program and the “Action Program for Overseas Intelligence for the Country.”
[2] These were titled “Opinion on Strengthening the Implementation of the Innovation-Driven Development Strategy to Further Advance Mass Entrepreneurship and Innovation (关于强化实施创新驱动发展战略进一步推进大众创业万众创新深入发展的意见)” and “Opinion on Promoting High-Quality Development of Mass Entrepreneurship and Innovation to Create an Upgraded Version of ‘Mass Entrepreneurship and Innovation’ (关于推动创新创业高质量发展打造“双创”升级版的意见).”
[3] At a November 2018 meeting in Qingdao to discuss implementing the spirit of the Haizhi Program, CAST confirmed that the construction of overseas talent bases was an upgraded version of the Haizhi Program (Qingdao Association for Science and Technology, December 5, 2018).
[4] China Brief was unable to identify a person matching the identity of Sun Youshun working at MIT. There was a Sun Youshun, who completed a PhD and was working as a postdoctoral researcher at MIT in 2006, but no information could be found to corroborate these claims from the ensuing 18 years.
[5] These include the Association of Chinese Professionals in Belgium (旅比华人专业人士协会), the Euro-American Elite Innovators Association (欧美精英创业家协会), the North America-China Scholars International Exchange Center (北美洲中国学人国际交流中心), the Association d’Incubateur Franco-Chinois (法中孵化器联盟协会), and the Zhigui Science and Innovation Center in the United Kingdom (英国智归科创中心) (Changzhou FROC, January 15, 2007; ACFROC, July 2, 2019; Sohu, January 27, 2023; ACFROC, May 4, 2023; 52hrtt.com, November 10, 2023; Tianjin Municipal People’s Government, January 4; National Offshore Entrepreneurial Base for Overseas Professionals Tianjin Binhai, accessed November 13).
