China’s Huge Spending On R&D And Why The United States And Its Allies Are Afraid



China’s Five Hundred Meter Aperture Radio Telescope (FAST) undergoing maintenance in southwest China’s Guizhou Province, Jan. 8, 2020. / Xinhua

China’s Five Hundred Meter Aperture Radio Telescope (FAST) undergoing maintenance in southwest China’s Guizhou Province, Jan. 8, 2020. / Xinhua

Editor’s Note: Stephen Ndegwa is a Nairobi-based communications expert, lecturer-researcher at United States International University-Africa, author and columnist on international affairs. The article reflects the views of the author, and not necessarily those of CGTN.

If the news that the Chinese economy will overtake that of the United States in the next few years had been suggested by the former, the world’s second largest economy would have been accused of misinformation or punches.

According to a new report released by the Aspen Institute, a Washington-based think tank, China will soon exceed the US budget for research and development (R&D) by 2025. As noted in the government’s work report during the 14th five-year plan (2021-25), the country will strive to achieve annual growth of more than 7% in R&D spending.

“If China implements its current five-year plan, it will soon exceed total US R&D spending,” the report said, adding that China’s R&D spending has grown 16% per year since 2000, compared to a meager 3% in the United States. States. As a result, US spending on R&D as a percentage of gross domestic product (GDP) is the lowest in decades, averaging 2.8% of GDP spent on R&D over the past 10 years.

Statistics released by China’s National Bureau of Statistics in April reveal that the country spent 37.3% more in the high-tech investment sector in the first quarter of 2021 compared to the same period in 2020. Investments in the high-tech sector High-tech manufacturing increased 41.6%, and investment in the high-tech service sector increased 28.9%.

Investment in medical equipment manufacturing increased 50% year-on-year, and investment in computers and office equipment climbed 49.5%. The added value of equipment manufacturing in China rose 39.9% in the first quarter. Growth in the production of new energy vehicles, industrial robots and microcomputers has all exceeded 60 percent, with an average over the past two years exceeding 19 percent.

Clearly, China’s economic growth has increased along with its investment in R&D. Its R&D spending increased by 35% between 1991 and 2018, from $ 13.1 billion to $ 462.6 billion. In 2018, China spent the same amount on R&D as four major economies combined – Japan, Germany, South Korea and France – accounting for almost a quarter of global R&D spending.

Conversely, the Aspen Institute report paints a grim picture of America’s progress, citing that it has vastly underinvested in science and innovation, which can hurt living standards. , health, national competitiveness and citizens’ capacity to respond to crises.

Now the observation that America is in general decline is gaining credibility. In an article published in Foreign Policy on July 16 titled “The Collapse of America’s Meritocracy is a Recipe for Revolt,” writer Paul Musgrave notes that “virtually few American policymakers have degrees in science or science. languages, and yet they make decisions about nuclear weapons nonetheless. , biotechnology and international trade. “

The office building of Internet company Microsoft in China is seen in Shanghai, China on December 8, 2020. / Getty

The office building of Internet company Microsoft in China is seen in Shanghai, China on December 8, 2020. / Getty

While not everything is rocket science, the United States has replaced its long-standing adherence to logic and science with political and social opportunism. This explains the reasons why the country’s leadership and its main Western allies have become extremely paranoid about China’s technological growth. Instructively, President Joe Biden on Monday mobilized American allies in yet another ridiculous accusation that China was behind global cyber attacks targeting Microsoft users in particular.

Of course, this big lie would be incomplete without mentioning the areas in which China allegedly stole valuable information. But it doesn’t take a lot of thinking to know that these are some of the areas where China has invested heavily in R&D, including the automotive, aerospace and medical sectors.

It is also important to note that a large part of China’s R&D investment is driven by the private sector. The sector invests 76.6%, while the government invests 20.2% of the money. This is not an indication of a government that is interested in spying on or interfering in the business transactions of other entities. Many of the other major Western economies have a higher government contribution to R&D, including the United States, which has a business-to-government contribution ratio of 62.4 and 23 percent, respectively.

In addition, China’s R&D trade contribution model also supports data from the World Bank which shows that the number of domestic listed companies in the country has more than tripled from 1,086 in 2000 to 3,777. in 2019.

The COVID-19 pandemic has laid bare strong economies and those built on sinking sand. The fact that China is the only country to experience positive economic growth in 2020 is proof of its wise investments over the years.

Ironically, another Western think tank, the UK-based Center for Economics and Business Research, predicted in December 2020 that by 2028, China will overtake the United States to become the world’s largest economy, five years earlier than expected. China’s “skillful” handling of COVID-19 would boost its relative growth relative to the United States and Europe in the coming years, the report said. Well, do the math!

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