On October 16, 2026, China's National Bureau of Statistics, Ministry of Science and Technology, and Ministry of Finance announced that the country's R&D spending in 2025 reached 3,928.82 billion yuan, up 8.2% from the previous year. That equals 2.80% of gross domestic product (GDP), or roughly $550 billion at the 2025 average exchange rate. The National Bureau of Statistics ranks China second in the world in total R&D spending, behind the United States. However, OECD statistics based on purchasing power parity (PPP) show China slightly ahead of the US in 2024. At the same time, China's basic research spending as a share of GDP was less than 40% of the US level, and China's science and technology minister has acknowledged that basic research accounts for a smaller share of total R&D than in major developed countries. China may rival the US in the scale of its R&D investment, but how that money is used still differs significantly.
Over 80% of R&D Spending Goes to Experimental Development, and Businesses Account for Three-Quarters
According to the "2025 National Science and Technology Expenditure Statistical Bulletin" published by the National Bureau of Statistics and others, the largest share of the 3,928.82 billion yuan in total R&D spending went to experimental development, at 3,201.20 billion yuan, or 81.5% of the total. Basic research spending was 283.46 billion yuan (7.21% of the total), and applied research spending was 444.16 billion yuan (11.3%). Basic research posted the highest growth rate at 13.3%, ahead of experimental development at 8.4% and applied research at 3.2%. Basic research's share of total R&D spending also rose 0.33 percentage points from the previous year, showing that investment in basic research is expanding, though from a still-small base.
By source of spending, businesses accounted for 3,039.44 billion yuan, or 77.4% of the total. Business R&D spending rose 7.7% from the previous year and exceeded 3 trillion yuan for the first time. Government research institutions spent 457.23 billion yuan (up 8.1%, 11.6% of the total), and institutions of higher education spent 340.73 billion yuan (up 11.1%, 8.7%). Businesses contributed 73.7% of the increase in total R&D spending, underscoring that corporate investment drives China's R&D.
Meanwhile, state fiscal spending on science and technology was 1,318.45 billion yuan, up 4.4% from the previous year, below the 8.2% growth of total R&D spending. Of this, the central government accounted for 33.9% and local governments for 66.1%. However, because fiscal science and technology spending and society-wide R&D spending cover different statistical scopes, the two cannot simply be added together or compared as the same spending category.
Total R&D spending grew by about 590 billion yuan over two years, from 3,335.71 billion yuan in 2023. According to an explanation by Luo Qiushi, a statistician at the National Bureau of Statistics, average annual growth in R&D spending during the 14th Five-Year Plan period (2021–2025) was 10.0%, higher than the 8.4% of the US and 5.8% of Japan. Note, however, that the US and Japan figures are 2021–2024 averages, so the comparison period differs by one year from China's.
R&D spending as a share of GDP has also risen. The 2025 figure of 2.80% corresponds to 12th place in the world and, according to the National Bureau of Statistics, exceeded the OECD average of 2.72% for the first time. This comparison, however, uses China's 2025 figure against the OECD's 2024 estimate, so the years do not match. The OECD's 2025 average has not yet been published, and on a same-year 2024 basis, China's 2.69% was slightly below the OECD average of 2.72%.
Has China's R&D Spending Surpassed the US? Exchange Rates and PPP Give Different Answers
When comparing R&D spending in China and the US, the method of conversion into dollars is crucial. International comparisons mainly use either market exchange rates or purchasing power parity (PPP), which adjusts for differences in price levels between countries. The same R&D spending in yuan can translate into very different dollar amounts depending on which is used, and the US–China ranking can even flip.
First, consider market exchange rates. Converting 2025 R&D spending of 3,928.82 billion yuan at the 2025 average exchange rate published by the National Bureau of Statistics, 1 dollar = 7.1429 yuan, gives roughly $550 billion. Because the comparison concerns annual R&D spending, the calculation uses the average rate for the year rather than the rate on a particular day.
Using the same method for 2024, China's R&D spending of 3,632.68 billion yuan comes to about $510.1 billion at that year's average exchange rate of 1 dollar = 7.1217 yuan. That is about 51% of US R&D spending of $1,009.3 billion. The National Bureau of Statistics describes China's R&D spending as second in the world behind the US, and says it is 3.4 times Germany's and 3.5 times Japan's, but it does not specify the conversion basis used for these multiples.
PPP, by contrast, accounts for differences in national price levels so that the same amount buys an equal quantity of goods and services. For example, if the labor costs and service prices needed for R&D are lower in China than in the US, China may be able to secure more research resources for the same dollar-equivalent amount. Reflecting this, China's R&D spending calculated at PPP is larger than the amount converted at market exchange rates.
Converted at PPP, China's 2024 R&D spending is nearly double the roughly $510.1 billion obtained at market exchange rates. The PPP rate back-calculated from OECD statistics is about 3.53 yuan per dollar, roughly half the year's market exchange rate of about 7.12 yuan. Measured by purchasing power within China, yuan-denominated R&D spending is valued at a much larger dollar amount.
In fact, according to the OECD's Main Science and Technology Indicators (MSTI), China's 2024 R&D spending reached $1,028.3 billion in current PPP dollars. The US figure was $1,009.3 billion, so China was about 1.9% higher. In the same statistics, Japan stood at $233.83 billion, about 23% of China's level, or put the other way, China's spending was about 4.4 times Japan's. This differs from the National Bureau of Statistics' "3.5 times Japan" figure, but since the conversion methods are not necessarily the same, it cannot simply be judged that either is wrong.
There are caveats to this result. The OECD notes that there are differences in statistical definitions for US R&D spending. In addition, the 2024 estimate published by the National Center for Science and Engineering Statistics (NCSES) of the US National Science Foundation (NSF) is $993 billion and may be revised. Even using that estimate, however, China's PPP-converted amount would still exceed the US.
The OECD itself explained in a March 2026 statistical release that, on a PPP basis, China's R&D spending caught up with and slightly exceeded that of the US in 2024. However, the PPP rates currently available are designed for GDP as a whole and are not price indices specific to R&D. Nor do they directly compare costs such as imported research equipment or hiring foreign researchers, and revisions to PPP could change the ranking. Furthermore, because US R&D spending for 2025 has not yet been published, it cannot be determined whether China exceeded the US on a same-year 2025 basis.
Basic Research Spending Is Only About 37% of the US Level as a Share of GDP
While China rivals the US in total R&D spending, the picture changes sharply for basic research alone. China's 2025 basic research spending was 283.46 billion yuan, equal to about $39.7 billion at the year's average exchange rate. Its 13.3% growth rate exceeds the 8.2% for total R&D spending, confirming that China is expanding investment in basic research. But large total R&D spending is not necessarily the same as investing enough in basic research relative to the size of the economy.
The National Bureau of Statistics says China's total basic research spending is also second in the world behind the US, about 2.3 times Japan's and about 2.8 times South Korea's. Here too, the basis for the dollar conversion is not specified. Comparing basic research spending as a share of each country's GDP, however, shows China's level well below that of major developed countries.
According to OECD statistics for 2024, basic research spending as a share of GDP was about 0.19% in China. The US was about 0.50%, Japan about 0.42%, and South Korea about 0.75%, all far above China. Using unrounded figures, China was at 0.185% and the US at 0.497%, meaning China's basic research spending as a share of GDP is only about 37% of the US level.
データを表で見る
| 基礎研究費の対GDP比 (%) | |
|---|---|
| 中国 | 0.19 |
| 日本 | 0.42 |
| 米国 | 0.5 |
| 韓国 | 0.75 |
China's ratio is less than half of Japan's, and South Korea's roughly 0.75% is about four times China's. However, what counts as basic research depends on reporting in each country's statistical surveys, and definitions and aggregation methods do not fully match across countries. The differences in figures therefore cannot be read directly as differences in research capability.
It is worth noting that the phrase "share of basic research" refers to two different indicators. The 7.21% in China's statistical bulletin is basic research spending as a share of total R&D spending. The OECD's 0.19%, on the other hand, is basic research spending as a share of GDP. The denominators differ, but the two are related by multiplying R&D spending as a share of GDP by basic research's share of total R&D spending.
For example, in China in 2024, R&D spending was 2.69% of GDP, of which basic research accounted for 6.88%. Multiplying the two gives basic research spending at about 0.19% of GDP. Similarly for the US, multiplying R&D spending at 3.44% of GDP by a basic research share of 14.4% gives about 0.50%.
Doing the same calculation with China's 2025 figures, 2.80% × 7.21% gives basic research spending at about 0.20% of GDP. Because the US figure for 2025 has not been published, it cannot be directly compared with the roughly 0.50% for 2024. Still, if China's basic research share remains in the 7% range, even if total R&D spending rose to, say, 3.0% of GDP, basic research spending would be only about 0.22% of GDP (3.0% × 7.21%). The calculation shows that bringing basic research investment closer to US levels requires changing the allocation, not just increasing total R&D spending.
China's Science Minister Acknowledges Basic Research Weakness, and Business Involvement Is Lower Than in the US and Japan
The Chinese government itself recognizes this low level of basic research investment as a challenge. In a signed article in issue 18 of 2026 of Qiushi, Science and Technology Minister Yin Hejun pointed out that basic research accounts for only 7.08% of China's total R&D spending, far from the 15–20% level in leading developed science and technology countries.
The 7.08% figure is based on the preliminary figure Yin gave at a press conference during the National People's Congress on March 5, 2026. At that time, he explained that R&D spending exceeded 3.92 trillion yuan and basic research spending was about 280 billion yuan, with its share exceeding 7% for the first time. In the final figures published in October, basic research spending was revised up to 283.46 billion yuan and its share to 7.21%. The 7.08% in Yin's article and the 7.21% in the latest statistics should therefore be distinguished as figures from different stages of tabulation.
What Yin singled out as a particular problem is the low level of corporate investment in basic research. In China, business investment accounts for less than 10% of total basic research spending, whereas according to his article it is about 35% in the US and about 45% in Japan. Chinese companies' R&D spending is concentrated on product improvement and manufacturing process refinement, and the incentive to invest actively in basic research aimed at long-term results is weak. In addition, personnel engaged in basic research make up only about 8% of all R&D personnel, far below the 15–25% in Western developed countries.
Challenges also remain in the research environment. Yin noted that in parts of the life sciences, dependence on imports remains high for high-performance reagents, specialized research and testing equipment, and core scientific software. Even as total R&D spending grows, China cannot necessarily secure enough of the people, equipment, and software that research requires domestically. Strengthening basic research requires not only funding but also building the research systems and technological foundations that support it.
The figure that businesses account for 77.4% of total R&D spending and the figure that business investment is under 10% of basic research spending are not contradictory. The former uses total R&D spending, including basic research, applied research, and experimental development, as the denominator, while the latter uses basic research spending alone. The National Bureau of Statistics says China's 77.4% business share of total R&D spending is close to the US's 77.6% and Japan's 78.9%. But even if businesses bear most R&D spending, that investment is concentrated on product development and technological improvement rather than basic research, producing a large gap in corporate involvement in basic research.
As for the "15–20% in major developed countries" level cited by Yin, his article does not give the reference year or specific source. It is not necessarily based on the same definitions or period as the 14.4% for the US and 11.6% for Japan calculated from OECD statistics, so caution is needed in making direct comparisons.
China Targets 5.5 Trillion Yuan in R&D by 2030, While the US Debates Research Budget Cuts
China plans to keep expanding R&D investment. The outline of the 15th Five-Year Plan, adopted in March 2026, sets a target of average annual growth of at least 7% in society-wide R&D spending for 2026–2030, the same level as the target in the 14th Five-Year Plan. If spending grows 7% a year from the 2025 base of 3,928.82 billion yuan, 2030 R&D spending would reach about 5.51 trillion yuan. However, this is a simple calculation by the editors, not a target figure the Chinese government has announced as specific 2030 spending.
In the US, meanwhile, there is a wide gap between the administration's cut proposals and Congress's decisions on federal research budgets. In drafting the fiscal 2026 budget, the president's budget request sought $27.9 billion for the National Institutes of Health (NIH), a 40.6% cut from the previous year. It also requested $3.9 billion for the National Science Foundation (NSF), a 56.9% reduction. Congress, however, largely rejected such deep cuts, allocating $47.5 billion to the NIH (up about 1%) and about $8.8 billion to the NSF (down about 3%). A Congressional Research Service (CRS) report also confirms the large gap between the administration's requests and actual appropriations.
What is now under consideration is the fiscal 2027 budget request released on April 3, 2026. According to a tally by Harvard University's Office of Federal Relations, the request for the NIH is $41.164 billion, down 12.8% from the previous year, and for the NSF is $3.9632 billion, down 54.7%. These are only the administration's proposals, however, not budgets enacted by Congress. As with fiscal 2026, the final amounts could change through congressional deliberation.
Fiscal 2027 began on October 1, 2026, but a full-year appropriations act has not yet been enacted. According to a notice from the US National Institutes of Health, government agencies are currently operating under the Continuing Appropriations and Extensions Act, 2027, a stopgap measure. The measure runs through December 11, 2026 and in principle continues funding based on enacted fiscal 2026 budgets, so full-year fiscal 2027 budgets for the NIH and NSF remain undetermined.
China's R&D spending growth target cannot, however, be directly compared with proposed cuts to US NIH and NSF budgets. China's target covers society-wide R&D spending, including businesses, research institutions, and universities, while the US budget requests concern federal spending on specific agencies. Because the scopes differ, it is difficult to judge from these figures alone how US and Chinese R&D investment will change.
Still, whether China can overcome its basic research weakness will be a key point to watch. As Yin noted, business investment accounts for under 10% of China's basic research spending, and personnel engaged in basic research make up only about 8% of all R&D personnel. Unless this structure changes, it will not be easy to bring the share of basic research closer to the level of major developed countries even as total R&D spending grows.
Going forward, the first things to watch are the US stopgap budget measure expiring on December 11 and China's next release of R&D statistics, for 2026. How far US research-related budgets are cut, and whether China continues to expand its allocation to basic research, will indicate the direction of research investment in both countries. For China, which has reached the point of matching the US in total R&D spending, the next challenge lies not only in expanding the scale of investment but in how far it can strengthen the businesses, talent, and research environment that support basic research.