China asks private sector to beef up investment in basic science

Figures from the Organisation for Economic Cooperation and Development show that China has been closing the gap in science and tech spending in recent decades. Its research and development funding accounted for 0.893 per cent of the nation’s GDP in 2000, and it rose to 2.1 per cent in 2018, ranking 18th on the list. Israel topped the list in 2018, with research funding at 4.3 per cent of GDP.

The China percentage translates into a sum of 1.96 trillion yuan (US$291.6 billion) on research and development in 2018 – a large number given the sheer size of the country’s economy. However, only about 5 per cent of China’s overall research and development spending goes on basic research, lagging a figure of 15 per cent in the US.

“In the US, the federal government, local governments, enterprises, and social entities all invest in basic research, while in China, the funding mainly comes from the central government,” said Wang, adding that the US has the most output in the field as it invests the most.

China has made clear in recent years its ambition to become a global tech superpower, with top leaders – including President Xi Jinping – saying science and technology is one of the main battlefronts of the economy. Part of the campaign is the “Made in China 2025” strategy unveiled in 2015, which aims to break the country’s reliance on foreign technology in sectors such as robotics, semiconductors, aerospace and new-energy vehicles.

The strategy was not mentioned in this year’s government work report delivered by Premier Li Keqiang at the National People’s Congress last Tuesday, amid growing criticism of the project in the US and Europe and trade tensions with the US. But Li did reiterate China’s plan to upgrade its manufacturing industry and boost technology development.

The government also pledged to put more financial and material resources at the disposal of scientists and cut red tape to enable them to focus on their research.

The increased focus on research and development has already prompted a number of Chinese companies to invest in basic science. In 2017, Alibaba Group, owner of the South China Morning Post, pledged to spend more than US$15 billion over the next three years on cutting edge areas such as data intelligence, quantum computing and human-machine interaction through the Alibaba Damo Academy.

Chinese internet giant Tencent Holdings said last November that it would allocate 1 billion yuan (US$144 million) to support young scientists in basic science research. Pony Ma, the founder of Tencent emphasised the importance of basic science to establish a solid foundation in technology during the two sessions this year, warning of the huge risks to the country’s tech development if it is ignored.

However, the major challenge for the private sector is talent, not money when it comes to investing in basic research, according to Zeng Fang, a delegate to the Chinese People’s Political Consultative Conference.

“Only one third of China’s funding of research and development comes from the private sector [currently],” said Zeng. “The difficulty for them is to find the right talent that can direct funds into projects that can produce genuine innovation and fresh knowledge – that is why most of their current funding goes on applications [of technology].

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