A privately owned plant that was on the verge of bankruptcy 35 years ago has now developed into a renowned bio-engineering company thanks to its commitment to innovation.

Pointing at piles of corncobs at the company's headquarters, Tang Yilin, chairman of Jinan Shengquan Group, said they were the source of the company's wealth, but if there had been no innovation and technological improvements, the source would have dried up.

"Innovation, research and development are the soul and lifeblood of our company," Tang said, adding that the company spent 150 million yuan ($22.5 million) on innovation each year in a bid to develop new value from corncobs. Currently, elements extracted from corncobs, such as furfural and fibers have been used to produce more than 100 kinds of products.

Shengquan is among thousands of enterprises, both privately owned and State-owned, in Shandong province that are seeking development through innovation, as the local government encourages enterprises to explore supply-sided reforms.

Statistics from the Shandong provincial government show that 4,156 innovation projects were implemented last year, creating 740 new products and 517 new technologies.

Thanks to their efforts, 135 enterprises in Shandong saw their revenues exceed 10 billion yuan ($1.5 billion) last year, of which nine exceeded 100 billion yuan. Fifty-one Shandong-based enterprises have been listed in the top 500 enterprises in China in terms of revenue.

A major part of Shandong's economy, State-owned enterprises are carrying out innovation-driven reforms to better fit into markets.

"Whether an SOE makes a successful reform depends on whether it can meet the demands of the market and society," said Zhang Xinwen, director of the Shandong State-owned Assets Supervision and Administration Commission.

Since May, the Shandong branch of China National Petroleum Corp has presented a new energy-efficient fuel to users in 12 cities across Shandong. Jointly developed by the Shandong branch and BASF China, the fuel oil is said to be more environmentally friendly.

"In addition to developing new products to meet customers' demands, we are exploring new marketing methods," said Gao Jianping, an executive at the Shandong branch of China National Petroleum. "Innovation is carried out in every area of our work."

Gao said the company is also promoting the fuel online, where sales reached 6 million yuan in May.

In March, Shandong received approval from the State Council to build a national innovation demonstration zone. The zone is designed to cover six high-tech industrial parks in Jinan, Qingdao, Zibo, Weifang, Yantai and Weihai.

In the zone, government intervention will be further reduced to create a more amicable environment for innovation and entrepreneurship, according to local officials.

To attract talent for innovation, the province released a series of measures including financial support, as well as a package of support policies covering children's education, household registration, spouse's work and social security for professionals who work in the province.

Shandong has about 360 postdoctoral research centers for professionals to do R&D in a variety of fields, including new energy, environmental protection, machinery, electronics, petrochemicals, biopharmaceuticals and healthcare.

(China Daily 09/05/2016 page34)