Abstract

This study aims to explore the factors affecting the national innovation capacity (NIC) of China. NIC is the capability of a nation to manufacture & commercialize the stream of innovation technology over the “long term”. The NIC of a country depicts not only industrial competitiveness of a country via a direct impact on the global market share of high tech products, but also determines its future potential for economic development. National innovation capacity depends upon the strength of national common innovation infrastructure, the industrial cluster innovation environment & therefore the strength of association among these two. Since reform and opening up of China, China innovation capability has made tremendous achievements, but the quality of the main innovation output is yet needed to be improved. The factors affecting the China's national innovation capacity include great human resource advantage of China, science & technology infrastructure and a high capacity to absorb international technology spillovers. But the industry cluster innovation environment, still not provide enough support to knowledge-intensive services.

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