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Tiananmen Square in Beijing

AP Photo/Ng Han Guan

China again boosts R&D spending by more than 10%

China continued its yearslong run of double-digit percentage increases in spending on R&D in 2019, but the nation is likely to fall short of a long-standing goal of increasing R&D expenditures to 2.5% of gross domestic product (GDP) by this year. But not hitting the target “should not be considered a failure, as China has been increasing its R&D expenditure over the past several decades at a rate higher than GDP growth,” says Cao Cong, a science policy specialist at the University of Nottingham’s Ningbo, China, campus.

 Total public and private science and technology expenditures in 2019 rose 12.5% over the previous year to 2.21 trillion Chinese yuan ($322 billion), the National Bureau of Statistics reported yesterday. Spending on basic research accounted for 6% of the total; applied research, 11.3%; and development, 82.7%. The spending amounted to 2.23% of GDP, an increase of 0.09 percentage points from the previous year.

 The 2.5% of GDP by 2020 goal was spelled out in China’s most recent Five Year Plan and in a 15-year Medium- and Long-Term Program for Science and Technology Development. For comparison, the United States spent 2.83% of GDP on R&D in 2018, according to the 5 August Main Science and Technology Indicators of the Organisation for Economic Co-Operation and Development (OECD), which covers 37 of the world’s largest national economies. OECD as a whole spent 2.38% of GDP on R&D in 2018. Israel and South Korea spent 4.9% and 4.5% of GDP, respectively, in 2018.

In terms of absolute expenditures, China is the world’s second biggest spender on R&D, with $468 billion versus the United States’s investment of $582 billion in 2018 according to OECD’s purchasing power parity comparison. But Cao and other analysts expect China to continue to close the gap. Cao points to several research milestones China passed in 2019. Investment in basic research reached 6% of total spending for the first time after hovering at just over 5% for 10 years. And combined national and local governmental expenditures on research topped 1 trillion yuan for the first time. He expects new, ambitious targets to be set in the next 5-year and medium-to-long-term science plans, which are now under discussion.

 Research priorities are yet to be set for the new plans, says Xie Xuemei, a specialist in innovation economics at Shanghai University. She says it is not clear to what extent the COVID-19 crisis will influence the plans. But she thinks there will be more emphasis on bolstering medical systems, public health emergency response capabilities, and life sciences in general.