China’s expenditure on research and innovation has been increasing steadily over the past two decades and it will continue to increase by more than 7% annually in the coming years, of which more than 8% will be devoted to basic research, i.e. an increase from around 6,2% in 2020, or approx. 23.1 billion USD.
The figure below shows our “graphic interpretation” of China’s innovation-driven strategy for new development competitiveness (Part II) from the 14th FYP. Here, innovation is of the highest strategic importance for China’s high-quality transformation and for “self-reliance” and “self-strengthening”.
At the heart of the strategy, it is not only the continuous increase of expenditure, but also fundamental adjustments and modernisation of incentive structures and governance to motivate research and innovation as well as research infrastructure and innovation ecosystem to support and facilitate exploration, implementation and uptake.
While China’s enterprises already account for more than 70% of the total research and innovation expenditure, the key role of enterprises is further highlighted to encourage deeper engagement in basic research as well as more breakthroughs in cross-sectoral and systemwide innovations.
In the 11th FYP (2006 – 2010), a “national innovation system” as an OECD-inspired concept was introduced to China’s 1st Medium- and Long-Term Development Plan for Science and Technology. One decade later and in the spirit of a new “whole-of-nation” science and innovation system, we see that the process of pursuing an innovation-driven China will not only be accelerating, but is also deepening and diversifying – with new thinking, new experimenting and new co-creation.
Nannan Lundin, Linnea Yang, Jessica Zhang and Matilde Eng
 China’s 2021 Government Work Report
 2020 China Statistical Yearbook on Science and Technology
The red part of the top picture is from Science and Technology Daily.