China to overtake Japan in R&D spending
China looks set to overtake Japan to become the world's second largest spender on research and development (R&D) in 2006, according to the latest forecasts from the Organisation for Economic Co-operation and Development (OECD). But reports have called into question the OECD figures, saying that they are much higher than official Chinese figures. Based on a 20% projected growth calculation, the OECD predicts that China will spend just over €102 billion on R&D in 2006, slightly more than Japan's estimated €97 billion. The US is expected to remain the world's leading investor in R&D in 2006, spending just over €248 billion, while the EU-15 is predicted to invest just under €173 billion. China's investment in R&D, which more than doubled from 0.6% of GDP in 1995 to just over 1.2% in 2004, is growing even faster than the country's economy, says the OECD. Also on the increase is the number of researchers, which rose by 77% between 1995 and 2004. China now ranks second worldwide with 926 000 researchers, just behind the United States (more than 1.3 million). 'The rapid rise of China in both money spent and researchers employed is stunning,' said Dirk Pilat, head of the OECD's science and technology division. Indeed, China rises far above other Asian economies. According to forecasts for 2006, South Korea's research spending ranks seventh worldwide at about €18 billion, followed closely by India, while Taiwan is in 12th place with just over €11 billion. But some are questioning whether the OECD forecasts are indeed correct. According to SciDev.Net China's official national statistics for R&D investment in 2005 was about €22.5 billion. Even with a 20% projected growth for this year, the figure would not rise beyond €27 billion, just over a quarter of the amount predicted by the OECD, the news portal reports. The discrepancy between the two forecasts does however make sense, the OECD says. Its forecasts are based on the real purchasing power of the Chinese yuan within China, which is nearly four times the current exchange rate. This allows the Chinese government to get more for its money than the equivalent amount of dollars would buy in the United States, Mr Pilat told SciDev.Net. But basing calculations on real purchasing power could overvalue the currency, as much research equipment is purchased internationally, Zeng Guoping, a senior science policy advisor at the Beijing-based Tsinghua University, told the magazine. Whatever the figure, there is no doubt that China's investment in R&D is growing steadily, and to keep up with this rising star, 'OECD countries need to make their research and innovation systems more efficient and find new ways to stimulate innovation in today's increasingly competitive global economy,' says Mr Pilat.
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China