A particularly noteworthy figure stands out on the latest 2025 Chinese economic "report card" released by the National Bureau of Statistics: in 2025, China's R&D expenditure intensity reached 2.8%, an increase of 0.11 percentage points from the previous year, surpassing the average level of OECD (Organisation for Economic Co-operation and Development) countries for the first time. R&D expenditure intensity, which is the ratio of a country's total R&D spending to its Gross Domestic Product (GDP), is an internationally recognized core indicator for measuring an economy's emphasis on and commitment to technological innovation. OECD member states are primarily composed of developed economies, and their average R&D intensity has long been regarded as the global "baseline" for innovation. China's achievement in surpassing this level is not merely a numerical feat but serves as concrete evidence of a profound transformation in the nation's development drivers, marking a critical phase where the national innovation system is transitioning from "quantitative accumulation" to "qualitative breakthrough."
This accomplishment was not achieved overnight; rather, it stems from the dual drivers of long-term national strategy and vibrant market innovation. Since the 18th National Congress of the Communist Party of China, the nation has placed scientific and technological innovation at the core of its overall development strategy, undertaking comprehensive planning and systematic deployment for its advancement, and continuously increasing investment in this area. Let us first review the historical data: China's R&D expenditure intensity steadily climbed from 1.91% in 2012 to 2.36% in 2020, and surpassed the European Union average in 2021. The intensity reached 2.69% in 2024, approaching the 2.7% mark, which laid a solid foundation for the ultimate breakthrough achieved throughout 2025.
Concurrently with the rising intensity, the absolute scale of China's R&D investment has also been growing continuously. From exceeding 1 trillion yuan in 2012, breaking the 2 trillion yuan mark in 2019, surpassing 3 trillion yuan in 2022, to reaching 3.9 trillion yuan in 2025. China's total expenditure on research and experimental development now stably holds the second position globally. This signifies that China has not only joined the ranks of global innovation leaders in terms of investment intensity but has also established one of the world's largest R&D activity systems through its massive total investment.
From a market perspective, enterprises have become the dominant force in R&D investment, accounting for the highest proportion of total societal R&D spending. Data from the National Bureau of Statistics shows that the share of enterprise contributions to total R&D expenditure has remained above 75% for many consecutive years, with their contribution to the growth of this expenditure reaching 77.1%, making them the primary driver behind the increase in China's R&D funding. Intense competition in sectors like new energy vehicles and the digital economy, in particular, has compelled enterprises to continuously ramp up their R&D investments. The fact that new energy vehicles now account for over 50% of domestic new car sales is a typical example of market success feeding back into R&D efforts.
Currently, China's R&D funding system, with enterprises as the mainstay, is functioning effectively. The latest data released by the European Commission shows that among the top 2000 companies globally by R&D investment in the 2024 fiscal year, 525 were Chinese firms, solidifying China's position as the world's second-largest R&D nation. The increasing R&D investment by Chinese companies benefits from policy incentives such as the super-deduction of R&D expenses and priority support for enterprises applying for national science and technology programs, but more importantly, it reflects strong confidence in the long-term positive trajectory of China's economic development.
Today, high-intensity R&D investment is bearing fruit across multiple industrial sectors in China. In 2025, the value-added of large-scale high-tech manufacturing as a proportion of the total value-added of large-scale industries rose to 17.1%, while the value-added of digital product manufacturing increased by 9.3% compared to the previous year. In the field of smart manufacturing, China has established over 500 exemplary smart factories, with the output of civil drones and industrial robots growing by 37.3% and 28% respectively compared to 2024. These figures indicate that China's R&D investments are being effectively translated into industrial competitiveness, driving the transformation of the economic structure towards high-technology and high value-added sectors.
Complementing the rise in investment intensity, China, for the first time, entered the global top ten in the World Intellectual Property Organization's Global Innovation Index rankings in 2025, providing further strong evidence of the efficiency of R&D output.
From a global perspective, China's R&D intensity surpassing the OECD average is reshaping the global innovation landscape. China has transformed from a "technology follower" into a "significant contributor" to global innovation. According to the latest report from the OECD's Main Science and Technology Indicators database, calculated using purchasing power parity, China's total R&D expenditure has rapidly grown from representing 72% of the U.S. level a decade ago to 96%, now roughly on par with the United States. Even more striking is the growth rate of China's R&D spending. China's R&D expenditure increased by 8.7% year-on-year in 2023, significantly outpacing the growth rates of the OECD (2.4%), the United States (1.7%), and the European Union (1.6%). In April 2025, a report titled "China Is Catching Up in R&D, and May Already Be Leading" by the prominent U.S. think tank Information Technology and Innovation Foundation pointed out that although the total U.S. R&D expenditure remains slightly higher than China's, its growth rate has noticeably slowed, while China has maintained a stable and relatively high growth rate. This trend has raised concerns about U.S. competitiveness in science and technology innovation, while simultaneously highlighting China's rapid ascent in the R&D domain.
Of course, surpassing the OECD average in R&D intensity is merely a starting point; China's scientific and technological innovation still faces multiple challenges. Standing at this new height, our focus should extend beyond the single dimension of "investment intensity" to concentrate on how to further optimize the investment structure, enhance innovation efficiency, and improve the innovation ecosystem, ultimately translating the vast R&D resources into more "zero-to-one" original breakthroughs and core competencies that will lead the development of future industries.
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