A record R&D budget
China's research and development spending exceeded $583 billion in 2025, up 8.2% year over year, according to the National Bureau of Statistics. Over the five years through 2025, spending grew at an average annual rate of 10%.
Basic research saw the largest percentage increase, rising 13.3% to roughly $40 billion, though it still accounts for just over 7% of total R&D spending. Research spending at higher education institutions rose 11% to about $48 billion.
Diverging paths with the US
China's R&D intensity, measured against GDP, reached 2.8% in 2025, surpassing the OECD average for the first time. Its total spending was 3.4 times Germany's and 3.5 times Japan's.
In the US, the administration's proposed 2026 budget calls for steep cuts to federal research, including 39% for the National Institutes of Health and 55% for the National Science Foundation. According to the report, about $3 billion in NIH grants were frozen or terminated in early 2025, affecting roughly 3,800 projects.
Where the money goes
Businesses remain the main source of funding: enterprise spending exceeded about $420 billion for the first time, more than 77% of the national total. Investment is concentrated in Guangdong, Jiangsu, Zhejiang and Shandong provinces, as well as Beijing and Shanghai.
Science and technology minister Yin Hejun has called stronger fundamental research a prerequisite for major technological breakthroughs. Beijing is targeting bottlenecks in semiconductors, industrial machinery and high-end scientific instruments.
