China continues to prioritise research and development (R&D) despite the country¡¯s slowing economy, with the drive for scientific self-sufficiency superseding economic development alone, according to analysts.

from the Organisation for Economic Cooperation and Development (OECD) show China¡¯s R&D spending grew at a faster rate in 2023 than it did in both the US and EU, as well as all OECD member states.

Growth in China reached 8.7 per cent, compared with 1.7 per cent in the US and 1.6 per cent in the EU.

According to China¡¯s National Bureau of Statistics, spending continued to increase in 2024, exceeding 3.6 trillion yuan (?382.37 billion) and up 8.3 per cent year-on-year. This accounted for 2.68 per cent of China¡¯s gross domestic product in 2024, up 0.1 percentage points from the previous year.

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It comes despite China¡¯s wider economic slowdown, triggered in part by the collapse of the real estate sector in 2021, which is still struggling to recover.

Given these financial concerns, the growth in research spending is ¡°quite a feat¡± and ¡°an important indicator of where China is putting its priorities¡±, said Jeroen Groenewegen-Lau, head of the science, technology and innovation programme at the Mercator Institute for China Studies.

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The Asian superpower also now has to contend with the export tariffs imposed by American president Donald Trump. However, analysts expect that R&D spending will continue to grow in spite of these economic barriers.

¡°When you look at some of the Asian economies, they tend to be countercyclical in their investment in research,¡± said Caroline Wagner, a professor specialising in public policy and science at Ohio State University. ¡°When economies slow, they actually increase their spending on research.¡±

She said this is true of Japan and Korea, which both exceeded the OECD average with growth of 2.7 per cent and 3.7 per cent in 2023 respectively.

¡°When they¡¯re experiencing a little bit of a downturn, they actually spend more on research in the hopes that it will stoke the economy,¡± Wagner added.

Groenewegen-Lau agreed that China¡¯s growth trajectory looks set to continue, with investment in basic research core to the country¡¯s national development strategy.

¡°Even if the economy is not going very well, they can keep up this expenditure,¡± he said. ¡°They¡¯re kind of borrowing from the future¡± to ¡°conquer all these technological bottlenecks¡±.

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He continued, ¡°It¡¯s clear that science technology is maybe even more important than economic development in its own right. It¡¯s like the economic development seems sometimes to be supporting the innovation machine.¡±

While these figures are made up of both government and corporate expenditure, there are concerns among China¡¯s leaders that businesses aren¡¯t investing as much as they should, particularly in basic research, according to Groenewegen-Lau.

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¡°The current economic situation is such that we know that they¡¯re investing less,¡± Groenewegen-Lau said. ¡°So the central government is trying to make up for that.¡±

Universities and research institutes are likely to benefit from this, with investment in the sector rising.

In 2024, expenditure by China¡¯s higher education institutes on R&D reached , an increase of 14.1 per cent from the previous year. However, this still accounted for a minority of total expenditure, with HEIs making up 8.2 per cent of the total, compared?with enterprises, which made up 77.7 per cent.

And, as China moves away from international engagement and towards self-sufficiency, a key challenge, said Wagner, will be ensuring it has the talent capabilities to go it alone.

¡°They have really been working on an imitative model, where they¡¯re connecting with and imitating leaders, and now they¡¯re trying to pull back and say, ¡®we¡¯re going to build our own national capacity¡¯, but you have to have enough [human] capacity in order to do that,¡± Wagner said.

¡°I think that¡¯s one of the questions that is maybe still out there unanswered. Can you do that on your own?¡±

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helen.packer@timeshighereducation.com