Science and research in China - statistics & facts
China has set up ambitious goals to achieve global innovation leadership in the near future. The country’s R&D spending reached 620 billion U.S. dollars on a PPP basis in 2021, closing the gap to the U.S. with 710 billion U.S. dollars, and leaving all other competitors far behind. At the same time, the number of new patents granted in China has increased significantly, exceeding four million patents for the first time in 2021.
In 2015, Beijing initiated its Made in China 2025 industrial policy, which took a more assertive stance towards innovation leadership and aimed at turning China into a high-tech manufacturing superpower over the next decades. Key industries were supported by tax cuts on R&D spending and direct state investments. These targets were reiterated in the 14th Five-Year-Plan for the years 2020 to 2025, focusing on attaining technological self-reliance and quality over quantity growth. Targets for R&D spending growth were set at above seven percent annually.
With China’s high level of technology investment, the country becomes exposed to additional risk. This does not only include the risk of missing research targets, but also the risk of lower-than-expected demand for new products. China therefore relies on open global markets that can absorb their high-tech products and repay investments.
China’s high-tech strategy
Technological innovation is a key element of China’s national development strategy. The government is well aware that technological advances play an important role in improving its still labor-intensive economy, climbing up the value chain, and creating growth potential in the future. This is reflected in the growth rates of government budget on science and technology and national spending on research and development (R&D), which have both increased much faster than GDP over the last two decades.In 2015, Beijing initiated its Made in China 2025 industrial policy, which took a more assertive stance towards innovation leadership and aimed at turning China into a high-tech manufacturing superpower over the next decades. Key industries were supported by tax cuts on R&D spending and direct state investments. These targets were reiterated in the 14th Five-Year-Plan for the years 2020 to 2025, focusing on attaining technological self-reliance and quality over quantity growth. Targets for R&D spending growth were set at above seven percent annually.
Distribution of China’s R&D spending
Despite a government-led approach towards innovation, the private sector share of R&D expenditure is comparatively high in China, reaching almost 78 percent in recent years. However, this includes a significant number of state-owned enterprises. The share of basic and applied research in total R&D expenditure, which is important for general technological breakthroughs, ranged at only 6.6 and 11.3 percent respectively in China in 2022, which is significantly lower than the average in developed countries.With China’s high level of technology investment, the country becomes exposed to additional risk. This does not only include the risk of missing research targets, but also the risk of lower-than-expected demand for new products. China therefore relies on open global markets that can absorb their high-tech products and repay investments.
