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A new China shock? The untold story of China's R&D subsidies

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  • Boeing, Philipp
  • Peters, Bettina

Abstract

China has set itself some very ambitious goals. It aims to become the world's leading nation in science and technology (S&T) before 2050. According to the 14th five-year plan, China's gross expenditures on research and development (R&D) are targeted to grow by more than 7% annually between 2021 and 2025, further increasing the current R&D-to-GDP ratio of about 2.23%. State-owned enterprises (SOEs) are likely to once again play a more prominent role in the innovation system. Importantly, they can lead state-funded research alliances with, say, small and medium-sized enterprises (SMEs) and research in-stitutions, reflecting the government's desire for both economic outcomes and political control. Serving the vision of national self-reliance, such research alliances can alleviate some of the severe scientific and technological bottlenecks that have become evident in recent years.

Suggested Citation

  • Boeing, Philipp & Peters, Bettina, 2021. "A new China shock? The untold story of China's R&D subsidies," ZEW Expert Briefs 21-10, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewexb:2110
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    References listed on IDEAS

    as
    1. Boeing, Philipp & Peters, Bettina, 2021. "Misappropriation of R&D Subsidies: Estimating Treatment Effects with One-Sided Noncompliance," IZA Discussion Papers 14852, Institute of Labor Economics (IZA).
    2. Zhao Chen & Zhikuo Liu & Juan Carlos Suárez Serrato & Daniel Yi Xu, 2021. "Notching R&D Investment with Corporate Income Tax Cuts in China," American Economic Review, American Economic Association, vol. 111(7), pages 2065-2100, July.
    3. Lily Fang & Josh Lerner & Chaopeng Wu & Qi Zhang, 2018. "Corruption, Government Subsidies, and Innovation: Evidence from China," NBER Working Papers 25098, National Bureau of Economic Research, Inc.
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