44 R&DMagazine December 2013 www.rdmag.com
China has increased its R&D investments by 12% to 20% annually for each of the past 20 years; while at the same time, U.S. R&D
spending increased at less than half those rates. As a result, China’s
investment is now about 61% that of the U.S., and continuing to
close. At the current rates, China’s commitment is expected to
surpass that of the U.S. by about 2022, when both countries are
likely to reach about $600 billion in R&D. China is investing heavily
to create an innovation infrastructure that will allow it to develop,
commercialize and market advanced technology-based products,
moving beyond its established position as a low-cost location for
• China’s middle class will expand from 35% to 75% over the
next 10 years—a demographic statistic that reflects economic
growth and, to some extent, an innovation-enabled society.
• 12th Five Year Plan (2011-2015) targets R&D spending at 2.2%
of GDP by 2015.
• Global researchers surveyed still consider U.S. superior to China
in basic and applied R&D.
• U.S. industrial, academic and government R&D are also viewed
more favorably than Chinese counterparts.
• China’s goal of an innovation-driven economy by 2020 requires
solving resources and environmental challenges.
In 2013, China is positioned as a location for cost-effective manufacturing, including for high-technology products. But efficient
manufacturing alone is not adequate to maintain economic growth.
Recognizing this, China intends to evolve from a manufacturing-centric model in 2013 to an innovation-based economy by 2020.
Mirroring the approach taken by the U.S., Europe and Japan since
World War II, China is making steady progress at building a research
2014 GLOBAL R&D FUNDING FORECAST
infrastructure and educating the scientists to operate it. Results are
impressive so far, with leading indicators of innovation rapidly approaching parity with the west.
China’s R&D investment is linked to national goals for industrial
growth, stable domestic evolution to an advanced economy, power
projection and international prestige. These goals are manifested in
large R&D-enabled projects like a Chinese space station and energy
generation infrastructure spanning from renewable to nuclear power.
In the latter, China draws on companies as well as public-sector
research assets in the U.S. and Europe. This creates opportunities at
a time when new unconventional fossil reserves have decreased emphasis on large-scale deployment of renewable energy technology in
the U.S. Moreover, cost and public perceptions have weakened the
outlook for nuclear energy in the U.S., Europe and Japan—all three
of which, nevertheless, still have vast experience in nuclear engineering and operations. China’s program sustains these capabilities and
accelerates its ability to address growing power requirements.
However, China has a number of significant challenges that must be
While China’s rate of annual growth is dropping from unsustainably
high levels, it still exceeds the U.S. and is catalyzed by GDP growth.
Comparison of annual change in national R&D investment