President Xi shoots for sci-tech global dominance

China’s R&D spending hits US$370 billion as Xi outlines plans to attract Communist Party-inspired scientists

It’s science, stupid! 

In a rallying call to “patriots,” President Xi Jinping has outlined plans for China to become the preeminent power in technology and science.

His speech at a conference in Beijing came just days after the National Bureau of Statistics reported that research and development spending hit 2.4 trillion yuan, or US$370 billion, in 2020.

The massive investment even outstripped GDP growth as Beijing moved to close the high-tech gap between the United States and its allies.

For Xi, R&D funding will help China wean itself off foreign technology and life sciences.

“[We must] insist on the correct political inclination [to] improve the work of scientists [and] inspire talented people to feel a deep patriotism … to forge ahead and serve the country,” he said earlier this week as reported by Xinhua, the official government news agency

Comrade Xi stressed that loyalty to the ruling Communist Party of China was intrinsically linked to the nation’s global ambitions. 

“At the end of the day, the country’s overall competitiveness is the competitiveness of its skilled personnel,” he said.

Behind the rhetoric:

  • Total R&D spending was 2.4 trillion yuan last year, a 10.2% jump compared to 2019.
  • The eye-watering numbers translated into 2.4% of gross domestic product or GDP.
  • State-owned enterprises along with the private sector spent 1.8 trillion yuan or US$280 billion.
  • That was 76.6% of the total budget.
  • Breaking down those statistics, 6% was used to fund basic research.
  • Up to 11.3% was spent on applied research and 82.7% on experimental development.

Delve deeper: “[While the] data is very positive, basic research still only accounted for 6% of overall spending, and it’s not clear whether private firms or SOEs contribute more to R&D spending,” research group Trivium China pointed out last week.

Funding dilemma: “The Chinese leadership has announced that they will spend more on basic research, but even then the question will be whether they are able to fund high-quality research – or continue to let much [of the] funding go to the ‘old boys’ networks,” Erik Baark, of the Hong Kong University of Science and Technology, told the South China Morning Post.

Big picture: During his conference address, Xi made it clear that China must strive to lead the world in “strategic sciences” in the next decade.

Sci-tech race: “By 2035, the country will have competitive advantages in many areas, and its strategic sci-tech strength and high-caliber talent teams will be among the strongest in the world,” Xi said.

Spend, spend, spend: “If China implements its current five-year plan, it will soon exceed the United States in total R&D expenditure,” Benjamin Jones, of Northwestern University in the US, warned.

China Factor comment: Xi and the Party are desperate to catch up and then overtake their economic rivals. But ground-breaking innovation and research will prove difficult in China’s mass surveillance state, controlled by an authoritarian regime.