China R&D Passes Japan, Second Only to U.S.

By Paul Kedrosky · December 4, 2006 · ·

According to OECD figures (in .xls format), China R&D spending will have passed Japan in 2006, making that country second only to the U.S. worldwide in such expenditures.

Remarkable stuff.

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Comments

  1. duncan s says:
    December 4, 2006 at 11:34 am

    And, of course, one could easily argue that the graph significantly understates China’s current R&D spending. 1) The yuan is not reliably valued (even using PPP), and 2) a significant part of R&D costs are labour, which is of course much cheaper in China.
    Although the quality of that workforce may be lower than US/Japan/EU equivalents, it isn’t THAT much lower, and what gap there is seems to be narrowing rapidly.
    Based on what I have heard anecdotally about Chinese R&D (fully loaded, adjusting for lack of experience and lower quality) I would say that the CURRENT effective Chinese R&D spend is actually more or less in line with US spending, certainly ahead of the EU-15, and therefore neck and neck for first place.

  2. Tomas Sancio says:
    December 6, 2006 at 4:54 am

    Does this chart include purchased R&D expenditure, such as the one from IBM to Lenovo? If so, then no wonder the growth can be higher: Chinese companies will be able to buy functioning labs instead of having to create them from scratch.