Abstract: There is still a significant gap between the homegrown innovation capacity of China and that of major developed countries in terms of basic capacity for innovation, continuous capacity for innovation, and the enterprises’ capacity in innovation. The article analyzes factors restricting the improvement of homegrown innovation capacity in China in terms of mechanism for allotting market resources, policies for motivating market demands, form of organizing innovation, and cultural environment for innovation. Related countermeasure recommendations are also proposed.
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