Chinese scientists and enterprises should collaborate with Silicon Valley in major areas, especially in basic science research, for the benefit of mankind, said Zheng Xinli, a noted Chinese economist.

Collaboration between the two sides will be conducive to breakthroughs in fundamental research, which requires a tremendous amount of talent, materials and funding, said Zheng at the US-China New Economic Policies Conference held on Saturday in Burlingame, California.

"Significant breakthroughs are being made in such areas as quantum communication, life sciences and new materials. In some areas China enjoys advantages. It's doing just as well as Silicon Valley," said Zheng, vice-chairman of the China Center for International Economic Exchanges, and former senior advisor to the Central Committee of the Communist Party of China.

Last year, China launched the world's first quantum communication satellite. In the nuclear power arena, China is leading in the technology that will influence the energy crisis and climate change.

Compared to the US, China lacks innovative universities and the capability of training innovative students, which is the "shortest plank" (of a wooden bucket) for China, according to Zheng.

"China does not have well-developed venture capital and private equity systems. Monopoly profits lead state-owned enterprises to have little incentive for innovation," he said. "Most of the innovation happens with privately owned enterprises - two-thirds of the patents were filed by the private companies."

To learn from Silicon Valley's innovative experience and system will be a challenge for China to make reforms and progress in technology, he said.

Zheng also told the conference that China has two "bay areas" - the Guangdong-Hong Kong-Macao Bay Area and the Shanghai-Hangzhou Bay Area. Just like the San Francisco Bay Area, home to Silicon Valley, the two bay areas in China are expected to contribute to the country's scientific and technological research as well as economic development.

The San Francisco Bay Area provides a favorable environment for innovation and entrepreneurship, but the two bay areas in China are facing several problems that need to be addressed.

Urban-rural isolation and high housing prices are among the major problems that impede scientific and technological progress and healthy competition, said Zheng.

"The two bay areas in China should learn from the San Francisco Bay Area," he said.

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