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China May Soon Surpass the United States in R&D Funding

Feb 21, 2018

The U.S. National Science Board (NSB), which in January stated that China was catching up to the United States in research and development (R&D) expenditures, said in a 7 February statementthat if current trends continue, the board “expects China to pass the United States in R&D investments by the end of this year.”

The 18 January reportScience and Engineering Indicators 2018, had been presented earlier to Congress by NSB, which develops the indicators, advises the president and Congress, and governs the U.S. National Science Foundation. An NSB spokesperson told Eos that in the 6 years that the board has been conducting briefings of the biennial Indicators reports on Capitol Hill, “a key theme has been that China is catching up.”

China in 2018 will surpass the United States in research and development expenditures if current trends continue, according to the U.S. National Science Board (NSB). This new figure, released on 7 February, is drawn from the data in NSB’s Science and Engineering Indicators 2018 report and from the  National Patterns of R&D Resources, 2017 report of the National Science Foundation’s National Center for Science and Engineering Statistics. The figure was not included in the 18 January release of 2018 Indicatorsreport. Credit: Science and Engineering Indicators 2018

She continued, “Now we’re at the point where next time NSB does the briefing, in 2 years, the Board will be saying that China caught us. The Board felt this is a significant development that is worthy of pointing out to Congress.”

Chinese Reaction to the Report

Futao Chen, minister counselor for science and technology at the Chinese Embassy, Washington, D. C. Credit: Photo courtesy of Futao Chen

China’s rapid advance in R&D, as highlighted in the Indicators report, is only natural given the country’s economic growth and the size of its population, according to a senior science and technology official with the Chinese Embassy in Washington, D. C. However, although the official welcomed China’s growth, he said that China’s R&D expenditures are far less than the report states, and he downplayed China’s leadership in R&D.

The official, Futao Chen, minister counselor for science and technology at the embassy, also said that China welcomes more scientific cooperation with the United States. He added that the United States has nothing to worry about with regard to his country’s growth if China is viewed as a partner rather than as a rival.

“I don’t know how soon that will be, but it seems likely in the future we will be able to [overtake] the United States in terms of the overall input in research and development. But, for me, that’s absolutely normal, nothing surprising,” Chen told Eos in a recent interview at the embassy. He said it would be beneficial overall if the United States increased its own research budget and added that China’s research expenditures likely would slow down as economic growth slows.

Differences in Measuring Growth

The congressionally mandated Indicators report shows that the United States still leads the world in gross domestic expenditures on R&D, spending $496.6 billion—2.7% of its gross domestic product (GDP)—in 2015, the most recent year available for many indicators. However, the same report shows that China’s $408.8 billion (2.1% of its GDP) has now surpassed the European Union’s $386 billion and that Chinese R&D soared by about 18% annually between 2000 and 2015, whereas U.S. expenditures rose about 4% annually.

Chen said that China’s growth in research and development expenditures is much smaller than stated in the report.Chen, who previously served as inspector of the Department of Basic Research with the Ministry of Science and Technology of China, said that he agrees with the overall conclusions of the report. However, he said that China’s growth in R&D expenditures is much smaller than stated in the report, which converted foreign currencies into U.S. dollars via purchasing power parity (PPP) exchange rates.

The NSB report outlines pros and cons of using PPP, noting that PPPs are the preferred international standard for calculating R&D comparisons between countries. However, “PPPs for large developing countries such as China and India are often rough approximations and have shortcomings,” the NSB report states.

Chen agreed, saying that PPPs are not the optimal way to compare expenditures of different countries that have, for example, different cultures and consuming habits. “If you use PPP, China’s capability for research and development is overexaggerated,” he said.

For example, when it comes to actual money spent, Chen noted that in 2017, China’s R&D expenditure was 1.76 trillion yuan, or US$278 billion. In 2015, its R&D spending was 1.42 trillion yuan, or US$206.05 billion, according to data from China reported by Reuters. NSB’s estimates of China’s R&D spending, based on PPP, are nearly double what Reuters reports for the same year.

“Still Far from Becoming a Superpower”

The report shows that in education, China awarded 22% of the world’s science and engineering (S&E) bachelor’s degrees in 2014 compared with 10% in the United States. China awarded about 34,000 S&E doctoral degrees compared to about 40,000 in the United States.

In 2000, however, China awarded fewer than 10,000 of the world’s S&E doctorates, whereas the United States awarded about 25,000. Indicators also shows that in 2016 China overtook the United States in the number of S&E articles published, with China publishing 18.6% of the total compared with 17.8% for the United States.

However, Chen downplayed China’s number one spot in articles published, saying that the volume is there but that the quality of papers, judged by the number of citations, is still below the world average. Referring to China as a leader because of the number of publications is not accurate, he said.

“If there are tens of leaders, yes, we are one of them. But if there is only one leader, the United States is absolutely still the leader” in research output, Chen said. “I don’t think it’s fair to call China a superpower. We’re growing fast, which is not bad, I think, but we are still far from becoming a superpower.”

Dealing with Climate Change

“If there are tens of leaders, yes, we are one of them. But if there is only one leader, the United States is absolutely still the leader.”Chen also demurred about China stepping up to be a leader in climate change efforts, following the Trump administration’s planned withdrawal from the Paris climate agreement.

“I don’t think China has the intention to step in as a leader in that area, but we think that it is a major concern for the world,” he told Eos. “China as one of the major production countries in the world, we have our responsibility, and we have the willingness to devote more of our resources to solve the problem.”

No Cause for Concern

Chen said that he doesn’t understand why China’s growth should be viewed as a concern to other countries. He mentioned, for instance, that a Washington Post article about the Indicators report cited the congressionally established U.S.-China Economic and Security Review Commission and its concerns about threats to the United States from China’s growth. The commission’s 2017 report to Congress, for example, noted the Chinese government’s comprehensive approach to develop key dual-use technologies “to build national champions and advance its military capabilities.”

However, Chen dismissed that concern as “the simple judgment that China’s growth in research and development will definitely interpret into military power growth and things like that.”

He said that China’s growth in R&D provides many reasons for China and the United States to cooperate scientifically, do more research together, and have more scientific and personal exchanges. Chen noted that the United States is currently China’s largest partner in terms of scientific research and that the two countries are currently actively negotiating an extension for the China-U.S. Science and Technology Cooperation Agreement.

“Scientists from different corners of the world should keep in close contact. That’s the basis for scientific advancement.”He also bristled at limitations imposed by Congress that prohibit the White House Office of Science and Technology Policy and NASA from coordinating joint scientific activities with China, saying that “scientists from different corners of the world should keep in close contact. That’s the basis for scientific advancement.”

“If you deem China as a partner who will be able to cooperate with you, there’s nothing wrong, nothing to worry about,” Chen said regarding China’s growth in science and technology. “But certainly, if you make the prejudgment that China is a rival, then you may feel surprise or you may feel some unease.”


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