This year marks the final stretch of China’s 14th Five-Year Plan (2021-2025), placing significant emphasis on developing new quality productive forces. Introduced in 2023, this concept represents advanced productivity liberated from traditional economic growth models, characterized by high-tech, high efficiency, and high quality. Key areas include artificial intelligence, big data, and new materials.
Rising R&D Fuels Innovation
Last year, China solidified its position as a global innovation leader by climbing to 11th place on the Global Innovation Index, one of the fastest improvements among major economies over the past decade. This achievement is supported by sustained investments in research and development (R&D), with R&D expenditure reaching 2.68% of GDP in 2024, an increase of 0.1 percentage points year-on-year. Basic research funding surged by 10.5%, now accounting for 6.91% of total R&D spending, according to the National Bureau of Statistics (NBS).
Total R&D spending in China surpassed 3.6 trillion yuan (approximately $500 billion) last year, marking an 8.3% increase compared to the previous year. NBS statistician Zhang Qilong attributes this growth to favorable policies, a diversified investment environment, and stronger involvement from businesses. With an R&D intensity of 2.68%, China ranks 12th among major countries, outpacing the European Union’s average of 2.11% and nearing the Organisation for Economic Co-operation and Development’s figure of 2.73%.
New and Old Industries Embrace Tech
China’s industrial landscape is undergoing a transformative shift as emerging sectors rapidly expand. Kang Yi, commissioner of the NBS, noted that the value-added output in high-tech manufacturing above designated size grew by 8.9% year-on-year in 2024. Notably, the aerospace equipment and electronic communication device manufacturing sectors posted double-digit growth, while smart consumer equipment manufacturing surged by 10.9%, driven by soaring demand for intelligent car-mounted devices (up 25.1%) and unmanned aerial vehicles (up 53.5%).
\"New market demands are accelerating the supply of high-quality products, reshaping China's industrial pillars,\" Kang emphasized. Meanwhile, legacy industries saw robust modernization efforts in 2024, with technical transformation investments in manufacturing rising by 8%, outpacing overall investment growth. The digital economy continued its rapid ascent, with the value-added output in digital product manufacturing exceeding industrial averages and the information transmission, software, and IT service sector expanding by 10.9%.
Digital consumption innovations further spurred online retail sales of physical goods, which climbed by 6.5%. Infrastructure for next-generation connectivity advanced steadily, with China deploying 4.19 million 5G base stations by November 2024. Additionally, the country launched its first 400G all-optical interprovincial backbone network under the \"East Data West Computing\" project, establishing ultra-high-speed computing channels.
Reference(s):
cgtn.com
