China's basic research trajectory: From scaling up to system building
Chinese President Xi Jinping has urged stronger efforts and more concrete measures to reinforce basic research and enhance China’s capacity for original innovation, emphasizing the need to solidify the foundation of national scientific strength. Speaking at a symposium in Shanghai on April 30, Xi stressed that intensifying global technological competition is increasingly centered on frontier scientific fields where breakthrough innovation is becoming ever more critical.
China’s investment in basic research has continued its steady upward trajectory over the past several years, reflecting a broader reorientation toward innovation-driven development. In 2024, national expenditure on basic research reached 250.09 billion yuan (about $36.62 billion), marking a 10.7% year-on-year increase, outpacing the 8.9% growth of overall R&D spending.
This sustained expansion has pushed China’s basic research scale to second in the world, second only to the United States, where basic research constituted approximately 14%–16% of national R&D expenditure during the 2022–2023 fiscal year. Its share of total R&D expenditure rose to 6.88%, setting a record of its own. In comparison, the European Union’s research and development spending accounted for about 2.2% of GDP in 2024, with Germany’s R&D intensity exceeding 3%, according to Eurostat.
During the first 4 years of the 14th Five-Year Plan (2016–2020), China’s R&D spending grew at an average annual rate of 10.5%, exceeding planned targets and ranking among the fastest globally.
The momentum further accelerated in 2025, as data from the Ministry of Science and Technology show that China’s total R&D investment exceeded 3.92 trillion yuan (about $574 billion), accounting for 2.8% of GDP. Within this, basic research funding rose to nearly 280 billion yuan, or 7.08% of total R&D expenditure, surpassing the 7% threshold for the first time.
Building a diversified funding architecture
Alongside rising funding levels, China has been constructing a more diversified science and technology financing architecture that integrates government, enterprise, and social capital. The 2021 revised Law of the People’s Republic of China on Scientific and Technological Progress explicitly motivates enterprises to increase expenditure on basic research and encourages the non-governmental sector to invest in basic research through diverse means.
This direction has appeared in the Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development, which calls for “[encouraging] enterprises to make more investments in basic research” and promoting deeper integration of innovation chains with industry, capital, and talent chains. The framework seeks to mobilize broader societal resources while maintaining state-led coordination in strategic scientific fields.
Among the concrete institutional mechanisms are the NSFC-Huawei Joint Fund and the Energy Enterprise Joint Funds under the National Natural Science Foundation of China (NSFC). In these programs, NSFC is responsible for project selection and academic peer review, while enterprises provide matched funding. Research topics are focused on frontier scientific challenges closely tied to industrial bottlenecks and long-term technological needs.
