China’s R&D spending keeps up steady rise as No 1 US seeks further funding cuts

China's R&D investment experienced an 8.2% increase in the past year, driven by a surge in fundamental science and university funding, according to the National Bureau of Statistics. This stands in stark contrast to the significant budget cuts occurring across the US research sector.

Total research and experimental development spending reached 3.9 trillion yuan (US$583 billion) in 2025, maintaining a trajectory of steady growth. China's R&D spending grew at an average annual rate of 10% over the past five years, placing it at the forefront of major economies. Only the United States and Germany outspent China in total R&D expenditure, with China surpassing Japan by 3.5 times.

Fundamental research saw the most substantial growth among the three R&D categories, expanding by 13.3% year-on-year. However, this category still accounted for only 7% of the overall national figure. Higher education institutions' R&D spending reached 340.7 billion yuan, increasing by 11% from the previous year.

Meanwhile, the US continues to slash funding for scientific research, with cuts initiated under President Trump in early 2025 affecting around 3,800 projects and a proposed 2026 budget calling for a 39% reduction in NIH spending and a 55% cut in NSF funding. Universities have responded by cutting doctoral programs and laying off staff.

In response, China's Science and Technology Minister Yin Hejun outlined plans to strengthen basic scientific research, emphasizing its importance for technological breakthroughs, national security, and strategic priorities. Beijing plans to intensify efforts to address bottlenecks in critical sectors like semiconductors, industrial machinery, and high-end instruments.

In 2025, China's R&D expenditure reached 2.8% of its GDP, surpassing the OECD average for the first time. The corporate sector drove the bulk of China's R&D investment, with enterprise spending crossing 3 trillion yuan for the first time, making up over 77% of the total. Government-affiliated research institutions, universities, and other entities accounted for the remaining 23%.

The spending was heavily concentrated in China's developed coastal provinces and tier one cities, with Guangdong, Jiangsu, Zhejiang, and Shandong provinces, as well as Shanghai and Beijing, each recording R&D investments exceeding 200 billion yuan.