Document summary
China is in danger of overreliance on government spending and property speculation to deliver growth. The government has been trying to kick start private investment in more productive areas to restore economic vitality. A key initiative is the seven strategic industries announced by the State Council, October 2010: energy saving & environmental protection; new generation IT; bio-tech; high-end equipment; new energy; new materials and new energy car. Whether after years of a tightly managed economy innovation can be fostered remains to be seen. There are two major hurdles to innovation: resistance from interest groups and a lack of institutional framework.