
AsianScientist (Sep. 5, 2014) – China’s budget management is lagging behind countries which spend similar amounts on research and development (R&D), and recent reform has not gone far enough, say researchers in a paper published in Science.
In almost 20 years, China’s R&D expenditure as a percentage of its gross domestic product has more than tripled, reaching 1.98 percent in 2012. This figure surpasses the 28 member states of the EU, which collectively managed 1.96 percent.
However, despite this, China saw a sharp decline in money spent on scientific research, in particular applied research. Basic research funding plummeted from 5.2 percent in 1995 to 4.7 percent in 2011, and applied research funding fell from 26.4 percent to 11.8 percent in the same years.
In collaboration with Dr. Sun Yutao from the Dalian University of Technology, Dr. Cao Cong from the University of Nottingham acknowledges a recent move by the Chinese government to increase transparency of its R&D expenditure, details of which have benefited the research.
“China’s recent requirement that central government agencies release their departmental annual reports indicates that the nation is catching up to international norms in disclosing the government’s expenditure, including its R&D expenditure profile, emphasizing not only aggregate statistics but also the structure of, and government’s contribution to, the expenditure,” the researchers said.
Although recent reforms have decentralized distribution of China’s R&D spending, through a series of agencies—which the authors acknowledge could be advantageous—they also present new challenges, including a lack of top-level design, effective coordination, and transparency in budgeting and spending. This has led to a both an overlap between agencies or even a rush to spend funds in certain programs.
While the improved transparency goes some way to bringing China’s R&D reporting processes in line with international norms, the authors criticize the fact that the Chinese government embeds its R&D expenditure in its broader S&T expenditure statistics. Instead, they argue, China’s government should switch its reporting from S&T to R&D expenditure, as well as ensuring the government’s R&D expenditure is cited in the country’s R&D statistics.
“It is a key step to bringing transparency to government R&D funding and helping reduce corruption, as well as harmonizing with international norms,” explained Dr. Sun and Dr. Cao.
The authors believe the shift from spending on predominantly applied research to development research may be attributed to China’s innovation policy, which favors development over scientific research.
Dr. Cao said: “The low share of scientific research expenditure has negatively affected China’s innovation capability and may jeopardize China’s ambition to become an innovation-oriented nation. Shrinking of applied research is a serious problem, because applied research links basic and development research.”
The authors recommend that, ultimately, if China wants its research and development to compete on a world stage, its government needs to increase its contribution from 21.7 percent in 2011 of gross expenditure in R&D to 30 percent by 2020, bringing it in line with competing nations.
The article can be found at: Sun and Cao (2014) Demystifying Central Government R&D Spending in China.
——
Source: University of Nottingham; Photo: Cory M. Grenier/Flickr/CC.
Disclaimer: This article does not necessarily reflect the views of AsianScientist or its staff.