China leads the world in R&D spending growth: PwC
November 6, 2018 Category China News Round-up, Weekly
China’s spending on research and development (R&D) grew the most globally in the 12 months to June 2018, according to a report by PricewaterhouseCoopers (PwC). As China eases away from its dependence on heavy industries and pushes to be a global leader in hi-tech sectors under the “Made in China 2025” plan, spending on R&D from electronics to science is growing. Though U.S. companies currently spend the largest amount of money on R&D, the figure invested by their Chinese counterparts grew the most worldwide in the year through June 30. Chinese companies spent 34% more on R&D to reach USD60 billion, according to the 14th annual PwC Strategy & Global Innovation 1000 study. The country’s overall R&D investment made up 8% of the global total, up from 6% last year. The report analyzed the world’s 1,000 largest publicly-listed companies that spend the most on R&D, and account for 40% of global expenditure.
“As China forges ahead with its innovation-driven growth strategy, innovation will become the top driving force for development,” said Patrick Hui, Consulting Partner at PwC mainland China and Hong Kong. “Twenty more Chinese companies entered the Global Innovation 1000 list compared with last year,” raising the total to 145. North America, meanwhile, saw a 5% decrease in the number of companies included on the list. Among Chinese companies, Alibaba Group Holding was the top R&D spender for a third straight year, investing USD3.6 billion, about 6% of China’s total. “R&D spending has increased in all industries in China, especially in software and internet as well as industrial sectors,” said Hui. Overall worldwide corporate spending on R&D rose 11% from the previous year to reach USD782 billion, and all regions saw an increase, according to PwC. Europe saw a 14% rise in spending, Japan 9%, and North America 8%.
Among industries, computing and electronics saw the most expenditure, accounting for 23% of all R&D dedicated money, led by Amazon and Google’s parent Alphabet as the top two global spenders. In terms of growth, the consumer industry overtook the software and internet sector for the first time in five years, with a 26% increase in R&D spending, while health care is set to be the biggest spending sector by 2020, the South China Morning Post reports.
Meanwhile, China overtook the U.S. in the number of start-up tech companies worth at least USD1 billion. China’s total expanded by 34 to 181 in the third quarter, according to Shanghai-based Hurun Report. The valuation of its biggest unicorn, Ant Financial, has exceeded its counterparts in the U.S. – Uber and Airbnb. “These unicorns, mostly in the new economy, are the fastest-growing companies with the most potential to grow big against a slowing economy,” Hurun’s Rupert Hoogewerf said.
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