China’s expenditure on technology research and development rose 10.6% to CNY1.57 trillion in 2016, the fastest annual growth since 2014, as the nation increases its investment in new driving forces to stabilize the economy. The National Bureau of Statistics (NBS) said the growth rate rebounded for the first time after declining for four years. It was 8.9% in 2015 and 9.9% in 2014. The expenditure accounted for 2.11% of last year’s total gross domestic product (GDP), compared with 2.06% in 2015. It has exceeded the average level of 2.08% in the EU, while the ratio for OECD countries was 2.40%.

R&D expenditure includes labor costs, raw material cost, and expenses on fixed-asset construction and management, the NBS said. Pan Jiancheng, Deputy Director of the Bureau’s Economic Monitoring Center, said the increasing proportion of R&D expenditure to GDP indicates that the driving force of economic growth is switching to a focus on innovation from the traditional factors of exports and investment. The government will also encourage companies to invest more in research.

NBS Director Ning Jizhe said at a news conference that investment in manufacturing technology upgrading was faster than overall investment growth during the past year. New driving forces, including new industries and business models – such as the shared economy and online sales – contributed 14.8% of the country’s total GDP in 2015. “The ratio was expected to be higher in 2016,” said Ning. Since July 2016 R&D expenditure has been added to GDP figures based on the requirements of the United Nations System of National Accounts, the China Daily reports.