National Bureau of Statistics: In 2024, China's investment in research and experimental development (R&D) will increase steadily, and the intensity of investment will increase rapidly

The Zhitong Finance App learned that on September 29, Zhang Qilong, chief statistician of the Social Science and Literature Department of the National Bureau of Statistics, interpreted the “2024 National Science and Technology Investment Statistics Bulletin”. Research and experimental development (R&D) funding is growing steadily, and investment intensity continues to increase. In 2024, China's total investment in research and experimental development (R&D) exceeded 3.6 trillion yuan, reaching 3632.68 billion yuan, an increase of 8.9% over the previous year, maintaining a steady growth trend. In the first four years of the “14th Five-Year Plan”, China's R&D expenditure increased by an average of 10.5% per year. The growth rate was higher than the planned target, and it ranked among the world's major economies. China currently ranks second in the world in terms of total funding for research and experimental development (R&D), after the US, 3.5 times that of Japan (third) and 3.7 times that of Germany (fourth).

The original text is as follows:

Investment in research and experimental development (R&D) has increased steadily

Investment intensity increased rapidly

——Zhang Qilong, chief statistician of the Department of Social Science and Literature of the National Bureau of Statistics, interprets the “2024 National Science and Technology Investment Statistics Bulletin”

Recently, the National Bureau of Statistics, the Ministry of Science and Technology, and the Ministry of Finance jointly issued the “2024 National Science and Technology Investment Statistics Bulletin”. Zhang Qilong, chief statistician of the Department of Social Science and Literature of the National Bureau of Statistics, explained it.

1. Research and experimental development (R&D) funding is growing steadily, and investment intensity continues to increase

In 2024, China's total investment in research and experimental development (R&D) exceeded 3.6 trillion yuan, reaching 3632.68 billion yuan, an increase of 8.9% over the previous year, maintaining a steady growth trend. In the first four years of the “14th Five-Year Plan”, China's R&D expenditure increased by an average of 10.5% per year. The growth rate was higher than the planned target, and it ranked among the world's major economies. China currently ranks second in the world in terms of total funding for research and experimental development (R&D), after the US, 3.5 times that of Japan (third) and 3.7 times that of Germany (fourth). The scale of investment in research and experimental development (R&D) continues to increase, providing a strong guarantee for China to accelerate the construction of a scientific and technological power.

^{In terms of investment intensity, in 2024, China's research and experimental development (R&D expenditure to GDP) investment intensity was 2.69%, an increase of 0.11 percentage points over the previous year [1]. The increase was faster than the average annual level of 0.03 percentage points since the 14th Five-Year Plan, continuing the relatively rapid upward trend.} China's research and experimental development (R&D) investment intensity ranks 12th in the world. It has continuously surpassed the EU level (2.13%) for many years and is close to the OECD average (2.70%).

2. The dominant position of enterprises in innovation is stable, and R&D investment in research institutions and universities has maintained a relatively rapid growth

Enterprises, government research institutes and universities are the three major implementing entities of research and experimental development (R&D) activities in China. In 2024, the three implementing entities spent 2821.16 billion yuan, 423.16 billion yuan, and 306.55 billion yuan respectively, up 8.8%, 9.7% and 11.3% from the previous year. The share of enterprises in the entire society's investment has remained above 75% for many years, contributing 77.1% to the growth of the entire society's funding, which is the main force driving the growth of R&D funding in China. Looking at key areas, R&D funding for large-scale high-tech manufacturing and equipment manufacturing increased by 10.2% and 10.5% respectively, faster than the growth rate of enterprises of all sizes and above, creating conditions for research on key core technologies and improving basic industrial capacity.

In 2024, government research institutes and universities accounted for 11.6% and 8.4% of the entire society's research and experimental development (R&D) funding, respectively, which is basically the same as the previous year. Looking at international comparisons, China's enterprise research and experimental development (R&D) share level (77.7%) is close to the US (79.0%) and Japan (79.4%), higher than Germany (67.4%), France (65.8%) and other EU countries.

3. New breakthroughs have been made in basic research investment, and the share continues to rise

By type of activity, in 2024, China's funding for basic research, applied research and experimental development was 250,09 billion yuan, 43.55 billion yuan, and 2952.04 billion yuan respectively, up 10.7%, 17.6%, and 7.6% from the previous year. The growth rate of basic research funding is 1.8 percentage points higher than the growth rate of R&D funding, continuing the rapid growth trend of more than double digits; the total amount is second only to the US, ranking second in the world, accounting for 6.88% of research and experimental development (R&D) funding, the highest level in history.

Government-affiliated research institutions and universities are the main forces in basic research in China. Their contribution rates to basic research funding growth in 2024 are 52.0% and 40.0% respectively. The construction and operation of various major scientific installations and laboratory systems is going smoothly, and it is an important growth point for basic research investment in China. The growth rate of applied research funding is higher than that of other types of activities, indicating that research activities of various innovators are further expanding to the front end of the innovation chain, and that more emphasis is being placed on research and exploration of underlying scientific and technological issues.

4. Financial science and technology spending is growing steadily, and preferential tax policies are becoming more effective

According to the national financial accounts data, in 2024, the national financial expenditure on science and technology was 1262.92 billion yuan, an increase of 63.33 billion yuan over the previous year, an increase of 5.3%, focusing on safeguarding capital requirements for basic research, scientific research plans and the construction of scientific research facilities. Among them, central and local government expenditure on science and technology was 419.25 billion yuan and 843.67 billion yuan respectively, accounting for 33.2% and 66.8% of the country's financial science and technology expenditure, respectively.

In recent years, the country has focused on supporting scientific and technological innovation and implementing a series of preferential tax policies, covering various aspects such as venture capital, R&D investment, transformation of achievements, and talent cultivation, to provide financial support for various innovators. According to data from the tax department, in 2024, the number of households and expenses of enterprises enjoying the R&D expenses plus deduction policy increased by 16.7% and 25.5%, respectively, compared to 2021, effectively encouraging all types of enterprises to continue to increase investment in R&D.

5. Regional collaborative development results have been highlighted, and the leading role of innovation highlands has been strengthened

In 2024, research and experimental development (R&D) funding in the east, central, western and northeastern regions of China was 2377.30 billion yuan, 658.21 billion yuan, 475.98 billion yuan and 121.19 billion yuan respectively, up 9.0%, 8.4%, 9.2% and 8.6% from the previous year, respectively. Several major regional sectors achieved relatively rapid growth. Research and experimental development (R&D) funding in the Beijing-Tianjin-Hebei and Yangtze River Delta regions was 486.68 billion yuan and 112.88 billion yuan respectively, up 9.2% and 10.5% from the previous year. Guangdong's research and experimental development (R&D) funding exceeded the 500 billion mark, and the leading role of the regional innovation highland was outstanding. Research and experimental development (R&D) funding in Anhui, Hubei, Sichuan and Chongqing, and Shaanxi increased by 10.4%, 9.2%, 9.1%, and 9.5%, respectively, over the previous year, all higher than the national growth rate. Research and experimental development (R&D) funding for the Yangtze River Economic Belt and the Yellow River Basin was 1773.23 billion yuan and 715.23 billion yuan respectively, up 10.0% and 8.4% respectively. The results of science and technology support for regional collaborative development were outstanding.

In 2024, 12 provinces (municipalities directly under the Central Government) spent more than 100 billion yuan on research and experimental development (R&D); 6 provinces (municipalities directly under the Central Government) spent more than 200 billion yuan, the same as last year. There are 7 provinces (municipalities directly under the Central Government) where the intensity of investment in research and experimental development (R&D) exceeds the national average, followed by Beijing (6.58%), Shanghai (4.35%), Guangdong (3.60%), Tianjin (3.44%), Jiangsu (3.36%), Zhejiang (3.22%), and Anhui (2.76%). Together, the seven regions account for 55.7% of the country's total R&D expenditure.

Overall, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core, various departments in all regions have anchored the goal of building a strong science and technology nation, accelerated the deep integration of scientific and technological innovation and industrial innovation, and cultivated and expanded new quality productivity. In 2024, research and experimental development (R&D) funding for the whole society maintained steady growth, and the main structural indicators were improving and improving. In the next stage, it is necessary to further broaden R&D funding channels and consolidate and deepen the effectiveness of related policies such as tax relief. Vigorously develop technology finance, improve comprehensive support systems such as venture capital, monetary credit, capital markets, technology insurance, and fiscal policies, focus on key technologies and key areas, guide enterprises and social forces to continue to increase investment in R&D, and improve the new pattern of diversified investment.

Note: [1] According to the final verified GDP data of the 5th National Economic Survey in 2023, the intensity of investment in research and experimental development (R&D) in 2023 was revised to 2.58%.

This article was edited by the National Bureau of Statistics, Zhitong Finance Editor: Chen Wenfang.