Building a solid research and development base is a key aim of the Chinese government over the next decade.

The government's plans for attracting foreign multinational investment to improve the scientific base of the economy are laid out clearly in the 12th Five-Year Plan (2011-2015).

Chinese Premier Wen Jiabao made clear earlier this year that such investment was key to China moving from being an exporter of cheap manufactured goods to a more advanced economy.

"We will focus on introducing advanced technology and skilled personnel, as well as encourage multinational corporations to set up research and development centers in China," he said in an address to the National People's Congress in Beijing earlier this year.

Depending on the sector and particular type of facility, foreign multinationals can be offered tax inducements as well as state-of-the art science park locations at preferential rates to set up their operations.

Chen Fengying, director of the World Economy Institute of China's Institute of Contemporary International Relations think tank, based in Beijing, says it is one of the parts of the Five-Year Plan that foreign multinationals find supportive.

"Many multinationals have complained a lot about the plan because the Chinese government cancelled a lot of other special treatment to foreign companies. There have been not many complaints about the research and development sections, however."

Huo Jianguo, a former deputy director general at the Department of Foreign Trade of the Ministry of Commerce and now president of the Chinese Academy of International Trade and Economic Cooperation, says foreign multinationals see major benefits in China for setting up research and development operations.

"Foreign-funded enterprises are establishing more research and development centers because of China's rapidly growing economy and huge market potential," he says.

He adds they are being backed by the government because such centers will be a catalyst to the economy moving upstream.

"This is a whole industry chain development process, which is also encouraged by the government. The number of foreign-owned research and development centers will increase steadily," he says.

Chen at the World Economy Institute says it is the right policy for the government to adopt at this stage of its development when it is trying to move up the value chain.

"The (foreign multinational research and development) centers will hire Chinese talent as part of the localization process," she says.

"Those researchers who then work for the foreign-funded research and development centers can learn a great deal and bring those advanced ideas and technologies to China's own research and development centers in the future."