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China: a scientific superpower in the making

fact sheet
19 November 2021
china R&D

Shanghai skyline (photo: Erik van 't Woud/ANP)

Image
Toeristen poseren voorde  skyline van Shanghai
Exchanging knowledge is beneficial for a country like the Netherlands. Unsurprisingly, international cooperation is one of the pillars of Dutch science policy. However, international cooperation also involves risks. In recent years, the Netherlands and the European Union have increased their focus on knowledge security. Previously, the Rathenau Instituut emphasized the importance of conscious strategic international collaborations, especially for scientists, institutions, and the Ministry of Education, Culture, and Science. In this way, we avoid becoming dependent on foreign funding and we can limit the risk of external influences on research. Cooperation with researchers from undemocratic and unfree countries is growing and geopolitical relations are shifting. To illustrate this, we will look at the phenomenal size and growth of scientific research in China. We compare China with the US, the EU, and the Netherlands and look at the increasing cooperation between Dutch and Chinese scientists.

In short

  • China is catching up to and even overtaking the EU through impressive growth in R&D investments.
  • Worldwide, China has the largest number of researchers and scientific publications and is growing faster than the EU, the US, and the Netherlands.
  • With the rapidly growing cooperation of Dutch and Chinese researchers, informed and responsible choices are essential.

Phenomenal growth in Chinese R&D investments

Over the past 25 years, investments in research and development (R&D) in China have increased structurally and phenomenally (see Figure 1.1). Whereas in 1996, China was still at the same level as the Netherlands, in 2019, China's total R&D funding is higher than that of the 27 countries of the European Union together. The US is still the largest absolute investor in R&D during this entire period, but China is approaching the level of the US. Over the period 1996-2019, R&D expenditure in China grew the
strongest by far: 2,722%, compared with 117% in the US and 85% in the Netherlands.

In the coming period, both the US and China plan to increase their investments in R&D. According to the Chinese National Bureau of Statistics, the Chinese state will increase the R&D budget by 7% annually in the coming years (Shead, 2021; Normile, 2021). Both the US and China plan to invest mainly in research that focuses on technology (National Security Commission on Artificial Intelligence, 2021).

In addition, China shows a substantial structural increase in the total expenditure on R&D as a percentage of the GDP (see figure 1.2). With an increase from less than 1% of the GDP in 1996 to 2.23% in 2019, China exceeds the Netherlands (2.18%) and the EU (2.12%). In addition, the tax benefit for companies to invest in R&D in China (0.07% of GDP in 2017) is lower than in the Netherlands (0.14% of GDP in 2018) and in the US (0.08% of GDP 2018).

At USD 375 in 2019, R&D investment per capita in China is still considerably lower than in the US, the Netherlands and EU countries (see Figure 1.3). Incidentally, China's population is also over four times larger than that of the US and three times larger than that of the EU (and over 80 times larger than that of the Netherlands). Here too, China shows the strongest growth. In 2019, for example, China invested over 30 times more in R&D per capita than in 1996. The other economies (US and EU) are showing solid growth for the same period, but not nearly as strong as China (about three times as much).
 

Limited international research funding

Across all economies, companies are the largest source of R&D funding (Figure 2.1). In China, companies made up 76% of total R&D investment in 2019. In the Netherlands, the US and the EU this percentage is much lower, around 60%. This is partly due to the difference in economic structure. In China, the importance of the manufacturing industry in the economy (38%) is much greater than in the US (18%) and the Netherlands (17%), where the service sector, which is less R&D-intensive, plays a relatively larger role (see Figure 2.3).

In China, about 20% of research funding comes from the government. Only a minor part comes from abroad (0.1%). In the other economies, in addition to companies, other stakeholders such as universities, private and non-private organisations and stakeholders from abroad play an important role. For example, 10% of Dutch R&D funding comes from abroad. It should be noted that in China, the division between public and private is less clear, which makes it less transparent which parties are behind Chinese financial flows. The Chinese state also exerts influence on companies through legislation and by making them partly state-owned (hybrid) (Witt & Redding, 2014; Hoffman & Kania,
2018). According to an independent advisory organisation to the Australian government (FIRB), hybrid ownership of companies (part state ownership) will become the norm in the Chinese market (Grigg,
2019).

Figure 2.2. also shows how R&D funding is divided by type of research. China and the US, for example, place a strong emphasis on experimental research. The Netherlands places relatively more emphasis on applied and fundamental research.
 

Largest number of researchers worldwide

China has the largest number of researchers worldwide. The growing investments in R&D have resulted in a strong increase in the number of researchers per 1,000 employees. Here, too, China is growing the fastest (see Figure 3). Nevertheless, the number of researchers per 1,000 employees in China is still low. There is still potential for further growth. With more than ten researchers per 1,000 employees, the Netherlands is also ahead of the US and the EU. This is despite the relatively low percentage of GDP that the Netherlands allocates to R&D. The WBSO (promotion of research and development) may contribute to this. With this scheme, the Dutch government makes it fiscally attractive for companies to use its workforce for research (RVO). Fiscal measures to stimulate research have also recently been introduced and scaled up in many other countries, such as the US and China.

Image 1. Number and development of researchers in FTE.

Bubble graph annual growth researchers
Data US up to and including 2018, for China only number of researchers per 1,000 persons employed. The size of the circles indicates the total number of researchers in FTE for the year 2019 (except for US: 2018).

China overtakes US in scientific output

The development of China as a new scientific world power is also reflected in its increase in scientific publications (see Figure 3). These are English publications listed in the Web of Science database of Clarivate Analytics. China's strong upward trend since 2009 came to a head in 2019, when, for the first time, China produced the largest number of scientific publications worldwide. The other reference countries also show an increase, but nowhere near the level of China. Up to and including 2018, the USA still produced the largest number of scientific publications worldwide. Between 2009 and 2018, the number of publications in the US grew a lot less (30%) than in China (276%) - yet another way in which China surpassed the US. In the Netherlands, the number of scientific publications grew by 53%.

Output growth is above average in all domains

The impressive increase in the number of Chinese publications is visible in every field of science (Figure 4). At 1,844%, the percentage increase is strongest in agricultural sciences. Across disciplines, we see that China gives a boost to the average publication increase of the reference countries. This effect is greatest in engineering and least in social sciences.
 

Citation impact increases, but remains below world average

Figure 5 shows that, in terms of citation impact score (an indicator of scientific quality and relevance), China exhibits the strongest development of all the reference countries. In the period 2000-2018, the citation impact score of Chinese science grew by 54%. Nevertheless, in terms of citation impact, in
2018, China is still below the world average. The Netherlands is among the world leaders, just below Switzerland and the United Kingdom.

Our factsheet on the 'Development of the scientific research profile of the Netherlands' shows that, in every scientific domain, the Netherlands is in the Top 5 with regards to citation impact. This is not the case for China, despite its astronomical growth. There are, however, a few disciplines where China surpasses the Netherlands in terms of citation impact. These are instrumentation sciences (China on 4, NL on 11) and computer sciences (China on 6, NL on 12). According to the China report of the European
Commission, China mainly wants to grow in technological scientific disciplines such as: new generation IT, high-end numerical control machinery, and aerospace engineering. By investing in this, the Chinese government wants to acquire a more dominant position within the technological science domain, and make itself less dependent on other countries (Alves Dias et al., 2019).

International cooperation in China still underdeveloped

Looking at developments in the number of international co-publications as a percentage of the total number of publications, we see an increase for all reference countries (Figure 6). In the Netherlands, the share of co-publications increased from 55% in 2010-2013 to 65% in 2015-2018. In China, the share of international co-publications is the lowest of the reference countries at 27% in 2015-2018. Since 2010, China's share of international publications has increased by 3 percentage points   

Number of Dutch-Chinese co-publications quadrupled

The figure below shows that the number of Dutch-Chinese co-publications has increased by 400% in the past decade: from 894 in 2010 to 4,459 in 2020. The three domains in which the Netherlands and China collaborated the most in 2020 are: environmental sciences (411 co-publications in 2020), multidisciplinary materials sciences (333 co-publications) and astronomy and astrophysics (272 co-publications).

In conclusion

The phenomenal growth and the unparalleled manpower in Chinese science results in the largest and strongest growing number of scientific publications worldwide. The Chinese state plans to stimulate
this growth in R&D even further. For example, there are plans to increase R&D investments by 7% annually over the next five years. The largest consumer of this increased research budget will be the
technology sector.

Scientific quality, measured by citation impact, is also improving significantly. However, there is still more to be gained for China in this area. International scientific cooperation can play an important role
here, from which both Chinese and Dutch scientists can benefit. The rise of China as a scientific superpower can offer opportunities for scientific cooperation and for solving global issues. But
scientific cooperation also involves risks. This certainly applies to cooperation with researchers from countries such as China, which score low on the Democracy Index and the Freedom Index (Economist
Intelligence Unit, 2020; Vasques & McMahon, 2020).

While decentralisation seems to be taking off in China, some sectors, including science, are still centrally governed with a high dependence on state policy and state control (Benner, 2018, Kirby & Van
der Wende, 2019). The sources of funding for Chinese science are less diverse than those in the Netherlands and the other reference countries. Funding from abroad and by private non-profit
organisations does not seem to play a significant role. Although companies are the largest financiers of Chinese science, there are indications that the Chinese state also exerts influence through this channel. While the number of state-owned companies is decreasing, the number of hybrid companies (mixture of private and state ownership) is increasing. The dominant presence of the Chinese government within science can lead to undesirable influence and there are indications that members of the Communist Party of China are entering (international) science as researchers to serve the interests of
the party (Joske, 2018).

In the Bericht aan het parlement on knowledge security in higher education and science, the Rathenau Instituut already indicated that international cooperation and international mobility of scientists are of great importance to the Dutch knowledge economy. At the same time, there must be sufficient awareness of the risks involved at all levels: for the individual researcher, for research institutions and for the Netherlands as a whole. In earlier research, the Rathenau Instituut described examples of such risks. These include knowledge that can be used for both civil and military purposes (dual use) or risks in the field of economic interests (intellectual property) and ethics (human rights) (Rathenau Instituut, 2019). In the Message to Parliament, we shared several insights and suggestions for ensuring knowledge security in international cooperation.

The European Commission sets conditions for so-called 'third' countries to participate in the new Horizon Europe research programme. Non-EU and EEA countries must:

• have high qualifications in science, technology and innovation;
• commit to a rule-based, open market economy, including a fair and equitable approach to intellectual property rights and respect for human rights, supported by democratic institutions;
and
• promote active policies to improve the economic and social well-being of citizens.

(EU regulation on Horizon Europe, adopted 28 April 2021: Article 16).
 

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