China should surpass Japan this year to become the world's No. 2 investor in
research and development after the United States, an international economic
group said Monday.
China is expected to spend just over US$136 billion on R&D in 2006,
passing Japan's forecast US$130 billion, the Paris-based Organization for
Economic Cooperation and Development said in a report on world technology
Chinese Premier Wen Jiabao (C) visits
Woodside Hydrocarbon research facility at Curtin University in Perth,
Australia April 2, 2006. [Reuters]
Chinese companies and the government are spending heavily on trying to create
new technologies in areas from telecommunications to biotech. They're also
trying to reduce reliance on foreign know-how, which the Chinese leaders see as
a strategic weakness.
"The rapid rise of China in both money spent and researchers employed is
stunning," Dirk Pilat, head of the OECD's science and technology division, said
in a statement.
Among other Asian economies, South Korea's research spending ranked seventh
worldwide at about US$24 billion, followed closely by India, the OECD report
said. It said the region of Taiwan was in 12th place at US$15 billion.
The rise in Chinese spending has been fueled by economic growth that is
expected to top 10 percent this year.
Chinese President Hu Jintao and other leaders have called for China to become
an "innovation society," boosting the role of technology in driving growth and
reducing reliance on investment and low-wage industries.
The Cabinet or the State Council issued an ambitious 15-year plan in
February that called for making innovation the engine of China's growth by
pushing development of 11 key areas ranging from lasers to nuclear power and
genetics. It promised to support private research with tax breaks and improved
patent and copyright protection.
China's research and development spending as a percentage of its economic
output has more than doubled to 1.3 percent, up from 0.6 percent in 1995,
according to the 252-page OECD report, "Science, Technology and Industry
Outlook." It said research spending is growing even faster than the overall
Two-thirds of Chinese research spending this year is expected to come from
industry and one-third from the government, the report said. However, that
distinction is blurred in a system where big research spenders are state-owned
companies carrying out official mandates.
The 30-nation OECD includes the United States, Japan and most European Union
members. China is not a member.
The Chinese plan issued last February called for raising total research
spending still further to 2 percent of economic output by 2010 and 2.5 percent
"China's plan to become a major innovation economy by 2020 is probably the
most significant (among developing countries) as it will launch a series of
reforms and strategic projects to make research and innovation the motor of its
new economic development strategy," the OECD report said.
It isn't clear, however, how effectively China's research spending is being
In May, the government suffered an embarrassing setback when a scientist at a
leading Shanghai university was revealed to have faked research on a computer
chip that state media had hailed as a major breakthrough.
The number of Chinese researchers has soared by 77 percent over the past
decade to 966,000, ranking second behind the United States' 1.3 million and
ahead of Japan's 677,000, the OECD report said.
Still more Chinese scientists work abroad due to lack of opportunity at home.
Beijing is trying to lure them back by expanding university labs, opening
research parks and offering quick promotions to returning academics.
The nearly 15,000 Chinese scientists in the United States make up the largest
group of foreign researchers there, the OECD report said.