China surpasses US as global leader in experimental development, US maintains dominance in total R&D expenditures

The U.S. continues to be the global leader in total R&D expenditures, spending $483 billion (adjusted to 2010 purchasing parity dollars) in 2017 compared to China’s expenditures of $443 billion. However, according to a recent publication from the National Science Foundation, China surpassed the U.S. in expenditures on experimental development in 2014 and has since continued to increase its lead. In 2017, China spent more than $370 billion on experimental development compared to just over $300 billion in the United States.

Defined as the systematic work of producing new or improved products and processes based on knowledge gained from previous research, experimental development makes up the lion’s share of total R&D expenditures in both countries. For example, applied research — original investigation geared towards acquiring new knowledge for specific objectives — accounted for approximately $100 billion in the U.S. and nearly $50 billion in China. Similarly, in 2017 the U.S. spent over $80 billion and China spent $24 billion on basic research — theoretical work undertaken to acquire new knowledge about the underlying foundations of phenomena without any particular application in mind.

Each country has experienced relatively steady increases in each R&D category since 1991 — the earliest year for which data on China is available. However, investments across all categories in the U.S. have increased at rates far lower than in China which has also seen nearly zero annual reductions in any category. More specifically, the U.S. has increased its total R&D investments over this period by approximately 100 percent, but has experienced periodic reductions in expenditures while China has seen virtually continuous annual growth equating to a nearly 3,000 percent increase from 1991 to 2017.