China invests in R&D in search of innovation

China invented the kite, gunpowder, pasta and probably golf. But it’s a long time since the world’s most populous nation came up with something recognisably Chinese that the rest of the world wants to use.

A major talking point with the Chinese is why China is flagging in this area, falling ever further behind the West in product innovation.

They often complain that the government is not doing enough to foster vital creativity in the country.

Last year, there was a major push into research and development (R&D). China’s R&D spend passed the one trillion yuan (€ 120 billion) as it struggled to find the magic formula during the country’s push for a more innovation-driven economy.

GDP percentage

The proportion of R&D funds in China as a percentage of gross domestic output (GDP) is now 2 per cent, science and technology minister Wan Gang told a conference.

Businesses invested the most in R&D, accounting for 74 per cent of the total, according to official statistics. Wan said China’s innovation capability has been boosted in the past five years, with scientific progress contributing 51.7 per cent of China’s economic growth in 2011, compared with 48.8 per cent in 2008.