Communiqué on National Expenditures on Science and Technology in 2005

National Bureau of Statistics
Ministry of Science and Technology
Ministry of Finance

14 September, 2006

In 2005, China’s total expenditures on research and development (R&D) continued to maintain a rapid growth. The input intensity reached the highest level in the history. The dominant position of enterprises in R&D input was further consolidated. Science and technology (S&T) funds allocated by national finance have increased steadily, while S&T funds allocated by local finance grew rapidly.

I. Input of R&D funds

In 2005, total R&D expenditures reached 245.0 billion yuan, jumping 48.37 billion yuan as compared with previous year, up by 24.6 percent, a ratio of 1.34 percent to gross domestic product (GDP). The average R&D expenditure per capita by R&D personnel (full-time work) was 180 thousand yuan, 9,000 yuan more than the previous year.

In terms of different types of activities, the expenditure on basic research hit 13.12 billion yuan, increased 11.9 percent year-on-year; the expenditure on applied research stood at 43.35 billion yuan, increased 8.2 percent; the expenditure on experimental development totaled 188.53 billion yuan, climbing 30.1 percent. The proportion of the above three items was 5.4, 17.7 and 76.9 percent respectively.

In terms of different executive departments, the expenditures by all types of enterprises reached 167.38 billion yuan, a year-on-year increase of 27.4 percent; the expenditures by research institutions subordinated to the government departments arrived at 51.31 billion yuan, grew 18.9 percent; the expenditures by universities amounted for 24.23 billion yuan, climbing 20.6 percent. The proportion of expenditures among enterprises, research institutions and universities was 68.3, 20.9 and 9.9 percent respectively. The proportion of enterprises increased 1.5 percentage points over the previous year. The dominant position of enterprises in technological innovation input was further consolidated.

In terms of different sectors, there are six sectors1 having input intensity exceeded 1.0 percent in R&D funding. The proportion of special equipment maufacturing reached 1.6 percent, while 1.5 percent for pharmaceutical manufacturing, 1.4 percent for electric machinery and equipment manufacturing and transportation equipment manufacturing; 1.3 percent for general equipment industry , 1.2 percent for communications equipment, computer and other electronic equipment manufacturing.

In terms of different regions, there were seven provinces and municipalities with R&D expenditures more than ten billion yuan, that are Beijing, Jiangsu, Guangdong, Shanghai, Shandong, Zhejiang, and Liaoning. The total expenditures of these seven provinces and municipalities reached at 158.72 billion yuan, accounting for 64.8 percent to national total expenditures.

II. S&T funds allocated by finance

In 2005, S&T funds allocated by national finance amounted to 133.49 billion yuan, a year-on-year increase of 23.96 billion yuan, and rose 21.9 percent, sharing 3.9 percent to national financial expenditure. Of this total, S&T funds allocated by central finance valued at 80.78 billion yuan, increased by 16.7 percent over the previous year, accounting for 9.2 percent to the central financial expenditure; S&T funds allocated by local finance totaled 52.71 billion yuan, a year-on-year increase of 30.8 percent, accounted for 2.1 percent to local fiscal expenditures.

Note: 1. The top six sectors only comprise the data of large and medium-sized industrial enterprises.

2. The financial expenditures on capital construction of scientific research in this communiqué was calculated in accordance with the share of government funds in the total capital construction of scientific research and the total funds raised in S&T activities. According to the same method of calculation, the financial expenditures on capital construction of scientific research in 2004 was 9.59 billion yuan.

Explaination for Key Indicators:

Expenditures on R&D: refers to the actual expenditures spent in basic researches, applied researches and experimental development by executive units within statistical year. Including personnel fees, material costs, purchasing and construction fees of fixed assets, management fees and other expenses that actually spent in R&D activities.

Basic Research: refers to the experimental researches and theoretical researches in order to obtain new knowledge on basic theory regarding phenomenon and observed facts (exploring essence and kinetic discipline of objective thing, achieving new development and neodoxy), it does not aim at any special or specific application or use.

Applied Research: Refers to creationary researches in order to confirm the possible uses of basic research results, or exploring new methods (principal), or new approaches to be adopted so as to achieve scheduled objective, Applied research aimed at a specific purpose or goal.

Experimental development: refers to new craftwork, system and service established in order to produce new products, materials or installations, and systematic work carried out to substantially improve the existing craftwork, system and service, by utilizing the knowledge obtained from basic research, applied research and practical experiments.

Expenditure input intensity on R&D by Sector: Refers to the ratio of R&D expenditures to the sales revenues.

S&T funds allocated by Finance: Refers to all funds directly used in S&T activities allocated by financial departments at all levels within statistical year, including operating expenses for science, expenditures in S&T promotion (refers to the expenses approproiated from the government budget for the S&T expenditure, including new products development expenditure, expenditure for termediate trial and subsidies on important scientific researches.), expenditures on capital construction of scientific research, and other relevant operating expenses in scientific researches.