# Innovations in genetically modified agricultural technologies in China’s public sector: Successes and challenges

Jinyang Cai (School of Management and Economics, Beijing Institute of Technology, Beijing, China) (Sustainable Development Research Institute for Economy and Society of Beijing, Beijing, China)
Ruifa Hu (School of Management and Economics, Beijing Institute of Technology, Beijing, China)
Jikun Huang (China Center for Chinese Agricultural Policy, School of Advanced Agricultural Sciences, Peking University, Beijing, China)
Xiaobing Wang (China Center for Chinese Agricultural Policy, School of Advanced Agricultural Sciences, Peking University, Beijing, China)

ISSN: 1756-137X

Article publication date: 2 May 2017

2029

## Abstract

### Purpose

The purpose of this paper is to assess whether China’s public sector can continue to generate advanced genetically modified (GM) technologies that will be competitive in the market.

### Design/methodology/approach

The authors investigated all the research teams that have been conducting research projects under the variety development special program. The data collected include detail information on research capacity, research areas, performance, and process of their research projects. Based on the survey data, the authors assessed the innovations and progress of the variety development special program.

### Findings

Unlike other countries, most GM products in China are developed by public research institutes. There is rising concern on the ability of China’s public sector to continuously generate indigenous GM technology that can compete with multinational companies. The study surveyed 197 research institutes and 487 research teams and found that the GM program in China lacks coordination: researchers do not want to share their research materials with others. Due to the lack of coordination, most of the hundreds of research teams often worked independently in the year 2008-2010. Moreover, the authors found the lack of coordination may be due to the reason that the interests of researchers are not well protected. This paper also provided the recent progress and policy changes of GM program in China, and it found that the efficiency in the later three years improved a lot. In order to establish a competitive national public GM research system, China should continuously consolidate and integrate the upstream, midstream, and downstream activities of the whole GM innovation process. China’s public sector may also need to work more closely with both the domestic and international private sectors.

### Originality/value

This paper is a comprehensive analysis on the development of transgenic technology in China. The results of this paper can provide evidence for the dynamic adjustment of the policies in the variety development special program and can also provide reference for the future assessment of the variety development special program.

## Citation

Cai, J., Hu, R., Huang, J. and Wang, X. (2017), "Innovations in genetically modified agricultural technologies in China’s public sector: Successes and challenges", China Agricultural Economic Review, Vol. 9 No. 2, pp. 317-330. https://doi.org/10.1108/CAER-10-2016-0170

## Publisher

:

Emerald Publishing Limited

Copyright © 2017, Jinyang Cai, Ruifa Hu, Jikun Huang and Xiaobing Wang

## 1. Introduction

Internationally, the genetically modified (GM) technologies are mainly developed by private sector (e.g. the multinational companies, MNCs) (Huang, Rozelle, Pray, and Wang, 2002; Pray et al., 2002). In each year since the late 1980s, the investment in R&D by MNCs, on average, accounts for about 10 percent of their sale revenues (Alston et al., 1998; Hector et al., 2010). The six major GM MNCs patented 285 GM events of total 359 by 2010 and have dominated global GM crop industry in the world since 1990s (James, 2009). The successes of MNCs in generating GM technology demonstrate the importance of integrating technology innovation chains from upstream to downstream that use the most advanced and patented techniques and genetic materials from both own and other companies (Pray et al., 2002).

## 6. Conclusion

This study shows that in the national GM special program, by far the largest agricultural R&D program in China, more than 500 research teams have been working with aims of creating innovated GM new varieties to improve China’s agricultural productivity and national food security. Research outputs generated by individual research teams are impressive. Numerous genes have been cloned by upstream teams, as well as by midstream and downstream teams. Many cloned genes have also been used for transformation and varietal development. Especially in the recent five years, the efficiency of GM program has improved dramatically. Although we have not examined the final products (new varieties) generated from China’s GM R&D and its innovation system, we expect there will be emerging GM varieties, regardless of quality, from the hundreds of research teams engaged in China’s agricultural biotechnology industry.

However, our analyses also suggest that China’s public sector-led GM technology program is facing great challenges. Unlike the GM programs of the MNCs, China’s public-led GM program lacks efficient coordination. No oriented and integrated (upstream, midstream, and downstream) innovation process for the production of agricultural varieties has yet been formulated. The R&D of GM technology in China’s public sector is dominated by gene cloning, and most of the institutes with stronger research capacity are swarming into gene cloning rather than new variety breeding. Due to the lack of commercial tie arrangement, the researchers in upstream are hesitant to transfer their research materials and tools to the researchers in midstream or downstream, in turn, it will constraint the R&D in the midstream or downstream and make people who work on the midstream or downstream waste the capital and time to do repeat early-stage or risky research. To have a strong national public GM technology, better institutional arrangement should be made to promote the close cooperation of teams in the public sector with those in private sector, both domestically and internationally. Otherwise, China’s public-led GM technology could be much far behind the GM technology in the rest of world in the future.

## Table I

The numbers of research teams that engage in gene cloning and obtained cloned genes, 2010

Upstream research teams conducted research Midstream research teams conducted research Downstream research teams conducted research
Total Sum Clone Clone+T Clone+T+V Sum T+Clone T+V+Clone T T+V Sum V+T+Clone V+T V
Total teams 487 182 128 12 42 142 3 11 30 98 163 30 63 70
Engaged in gene cloning 226 182 128 12 42 14 3 11 30 30
Obtained cloned gene 197 154 102 12 40 13 3 10 30 30
Plant
Engaged in gene cloning 188 156 108 12 36 12 2 10 20 20
Obtained cloned gene 165 133 87 12 34 12 2 10 20 20
Animal
Engaged in gene cloning 38 26 20 6 2 1 1 10 10
Obtained cloned gene 32 21 15 6 21 1 10 10

Notes: Clone, clone gene; T, gene transformation; V, varietal breeding; the order represents priority of worked. For example, Clone+T+V indicates a team belongs to upstream research (clone gene) but also conducted researches in gene transformation and varietal breeding; V+T represents a team belong to downstream varietal breeding but also conducts middlestream work in gene transformation

Source: Authors’ own survey

## Table II

Number of genes cloned and used by different research teams

Upstream research teams conducted research Midstream research teams conducted research Downstream research teams conducted research
Total Sum Clone Clone+T Clone+T+V Sum T+Clone T+V+Clone Sum V+T+Clone
Obtained cloned gene 743 575 359 63 153 48 14 34 120 120
Have been used 420 297 100 60 137 42 14 28 81 81
by own institute only 342 249 71 48 130 33 13 20 60 60
by own and other institutes 52 33 16 10 7 8 1 7 11 11
by other institutes only 26 15 13 2 -- 1 -- 1 10 10
Have not been used 323 278 259 3 16 6 0 6 39 39

Notes: Clone, clone gene; T, gene transformation; V, varietal breeding; the order represents priority of worked. For example, Clone+T+V indicates a team belongs to upstream research (clone gene) but also conducted researches in gene transformation and varietal breeding; V+T represents a team belong to downstream varietal breeding but also conducts middlestream work in gene transformation

Source: Authors’ own survey

## Table III

Descriptive statistics of the characteristics of research teams worked and not worked in gene cloning, 2010

Total (mean) Worked in gene cloning Not worked in gene cloning t-Test
(2) vs (3)a
Indicator Definition (1) (2) (3) (4)
University 1=university; 0=otherwise 0.51 0.56 0.46 <0.05**
N-institute 1=national research institute; 0=otherwise 0.26 0.32 0.21 <0.01***
P-institute 1=provincial research institute; 0=otherwise 0.21 0.10 0.30 <0.01***
PhD The percent of researchers with PhD Degree (%) 43 48 39 <0.01***
GM fund Annual funding from GM special program, million yuan per person 0.11 0.13 0.09 <0.01***

Notes: ap-value obtained from t-test. **,***Statistically significant at 5 and 1 percent, respectively

Source: Authors’ own survey

## Table IV

The number and sources of gene used in gene transformation by different research teams by 2010

Upstream research teams conducted research Middlestream research teams conducted research Downstream research teams conducted research
Total Sum Clone+T Clone+T+V Sum T+Clone T+V+Clone T T+V Sum V+T+Clone V+T
All genes used in gene transformation 971 227 60 167 472 17 40 119 296 272 93 179
The sources of gene
Own institute 656 200 59 141 269 17 34 60 158 187 70 117
Other domestic institutes 215 20 1 19 130 0 5 36 89 65 18 47
Foreign countries 68 7 0 7 47 0 1 17 29 14 4 10
Do not know 32 0 0 0 26 0 0 6 20 6 1 5

Notes: Clone, clone gene; T, gene transformation; V, varietal breeding; the order represents priority of worked. For example, Clone+T+V indicates a team belongs to upstream research (clone gene) but also conducted researches in gene transformation and varietal breeding; V+T represents a team belong to downstream varietal breeding but also conducts middlestream work in gene transformation

Source: Authors’ own survey

## Table V

Percent of cloned genes used by own institutes and other institutes

With patents Without patents
Used by own institute only 57 67
Used by other institutes 43 33
by own and other institutes 30 23
by other institutes only 13 10

Source: Authors’ own survey

## Table VI

Probit regression for whether the cloned gene was shared with other institutes

(1) (2) (3)
Variables Definition Shared Shared Shared
Patented 1=the gene was patented; 0=otherwise 0.24 (0.07)*** 0.26 (0.07)*** 0.24 (0.07)***
P-doctor Percent of researchers with PhD Degree 0.002 (0.001)** 0.002 (0.001)** 0.002 (0.001)*
GM fund Annual funding from GMSP, million yuan per person 0.30 (0.15)* 0.30 (0.15)** 0.30 (0.16)*
N-institute 1=national research institute; 0=otherwise −0.08 (0.10) −0.11 (0.10)
University 1=university; 0=otherwise −0.01 (0.11) −0.02 (0.11)
Traits of gene (insect resistance as reference group)
Herbicide tolerance 1= herbicide tolerance; 0=otherwise −0.13 (0.08)
Virus resistance 1= virus resistance; 0=otherwise −0.07 (0.08)
Drought tolerance 1= drought tolerance; 0=otherwise −0.20 (0.05)***
Saline tolerance 1= saline tolerance; 0=otherwise −0.20 (0.04)***
Other stress tolerance 1= other stress tolerance; 0=otherwise −0.14 (0.06)**
High yield 1= high yield; 0=otherwise −0.23 (0.03)***
Good quality 1= good quality; 0=otherwise −0.09 (0.08)
High yield and good quality 1= high yield and good quality; 0=otherwise −0.23 (0.03)***
Other traits 1= other traits; 0=otherwise −0.12 (0.07)*
Observations 378 378 378

Note: *,**,***Statistically significant at 10, 5 and 1 percent, respectively

Source: Authors’ own survey

## Table VII

Comparison of the output between 2008-2010 and 2011-2015

First 3 years (2008-2010) Later 5 years (2011-2015)
Gene cloned (number/year) 247 483
Patents applied (number/year) 95 342
Patents authorized (number/year) 29 201

Source: Authors’ own survey

## Notes

1.

The program covers five major crops (rice, wheat, maize, soybean and cotton) and three major livestock (swine, cattle and sheep). This program aims to generate new GM varieties of above five crops and three kinds of livestock. Research projects under the program range from the upstream (e.g. gene cloning and gene transformation techniques) to the middlestream (e.g. gene transformation) and the downstream (e.g. breeding and varietal development) of the whole GM technology generation process.

2.

We did not uncover the name of the university here, because in the data collection process, we have an agreement with all the universities and institutes that their university will be given a ID code in the data set and their names will be confidential after cleaning the data set even within the research group.

3.

There are 6 and 12 research teams in the field of microorganism and security appraisal, respectively. We exclude the former one because the sample size is too small and the later one does not refer to gene cloning, gene transformation and new variety breeding.

4.

The cloned genes included in our survey are those whose traits (e.g. insect resistance and disease resistance) have been well acknowledged by the researcher by the year 2010.

5.

We exclude the genes in the field of animals because the sample size is too small.

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## Acknowledgements

This research was supported by National Natural Science Foundation of China (71403019, 71210004, 71333013), and the National Key Program on GM New Varieties (2016ZX0815-001).

## Corresponding author

Jikun Huang can be contacted at: jkhuang.ccap@pku.edu.cn