China approved its government’s 14th five-year plan during the annual session of the National People’s Congress in Beijing. The plan describes China’s vision for social and economic development and sets a target of increasing government investment in research and development (R&D) by at least 7 percent annually over the next five years.
Notably, the plan would boost basic research funding by 10.6 percent this year. “Basic research is the wellspring of scientific and technological innovation, so we will ensure the stable functioning of funding mechanisms for basic research and boost spending in this area by a considerable sum,” said Chinese Premier Li Keqiang. The plan proposes increasing the overall share of basic research in R&D spending from 6 percent to more than 8 percent. The United States, by comparison, currently spends roughly 17 percent of R&D funding on basic research.
The plan focuses on a push for scientific and technological self-reliance—emanating from recent tensions with the U.S. and other countries—and aims to strengthen alliances between academia and industry. In its quest to become a global leader in science by 2035, China has identified seven key areas as priorities for R&D: artificial intelligence, quantum information science, microelectronics, brain sciences, biotechnology, advanced medicine, and exploration of space, the deep sea, and polar regions. China also intends to expand its national lab system and make efforts to attract more international scientists.
China’s target growth rate for gross domestic product (GDP) is set at 6 percent for this year, which is one percentage point below the target growth rate for R&D spending. This means that China’s R&D spending as a percentage of GDP would likely increase. In 2018, China’s R&D spending was roughly 2.1 percent of its GDP, while the U.S. spent 2.83 percent of its GDP on R&D and the European Union spent 2.18 percent.
According to the National Science Foundation’s 2020 Science and Engineering Indicators report, China’s average annual growth rate of domestic R&D expenditures between 2000 and 2017 was 17.3 percent, while the United States’ annual growth rate was 4.3 percent. China has directed the majority of its $496 billion R&D spending to “experimental development,” which aims to produce new products or processes or improve existing ones while basic and applied research aims to create new knowledge. The Indictors report suggested that China may have surpassed the U.S in overall R&D spending at some point in 2019.