[photopress:IT_RandD.jpg,full,alignright]According to the 2006 R&D Expenditure Report China’s R&D expenditures reached RMB300 billion last year, 22.6% higher than in 2005. R&D expenditure in terms of GDP has risen from 0.69% in 1998 to 1.42% in 2006. Beijing aims to lift the figure by 2010 to 2.0%, closer to the levels of 2.5-3% in developed countries.
R&D activities are usually classified into three categories: basic research, applied research, and experimental development.
Although the development part is critical, it takes investment in basic and applied research to create innovation and breakthroughs. Last year, China’s expenditure on basic research was RMB15.6 billion, or just 5.2% of all R&D spending. In contrast, applied research accounted for RMB50.5 billion (16.8%) and experimental development RMB234.3 billion (78%).
In developed countries, basic and applied research account for anywhere between 35% and 50% of all R&D spending. China’s total is only 22%.
While the growth of spending on experimental development in China has outpaced the rate for all R&D, expenditure on research has been declining in percentage terms — it was 27.9% in 1998.
It is possible to argue that Chinese companies’ reluctance to spend on research has reflected a lack of intellectual property rights (IPR) protection, which makes their returns uncertain. They are more willing to spend on product development, mostly adding new features to existing technologies. Which suggests that if China’s IT industry is to move forward to innovation driving manufacture some way must be found to offer proper protection to intellectual property rights.
Our 2004 picture shows Ya-Qin Zhang (seated in this 2004 photo) in Beijing as head of all Microsoft China R&D operations with Hong Jiang Zhang, head of the Advanced Technology Center.
Source: Bangkok Post