Innovation China: The Middle Kingdom Boosts R&D Funding on Emerging Technologies by 159% to $18 Billion

China’s 12th Five-Year Plan brings unprecedented focus on innovation, efficiency, and infrastructure, identifying seven strategic and emerging industries for development, says Lux Research

BOSTON--()--China’s 12th Five-Year Plan, rated the most holistic plan for technology development anywhere in the world, reflects its quest to transform from a manufacturer into an innovator, as the rising Asian giant raises R&D funding for emerging technologies by 159% to $18 billion, according to a Lux Research report.

With dramatically expended emphasis on innovation, efficiency, and infrastructure, the plan is critical for technology scouts and new business development executives around the globe as China opens research funding to foreign companies, said the report titled, “Profiting from Predictable Policy: Interpreting China's 12th Five Year Plan for Emerging Technology.

“China is the largest manufacturing country in the world. Due to the weakening market demands in the developed countries, the traditional development model, which relies on manufacturing and real estate industries, has faced a big challenge,” said Xavier Xie, Lux Research Analyst and, with Richard Jun Li, the lead author of the report. “To achieve a sustainable growth, China has determined to focus on seven strategic and emerging industries: environmental technology, new energy, new energy vehicles, advanced equipment, biotechnology, new material, and information technology.”

Lux analysts closely studied the 12th Five-Year Plan and spoke to top Chinese government officials. Among their findings:

  • R&D funding will grow at an unprecedented rate, but miss targets. In the 12th Five-Year Plan, China is raising R&D funding for emerging technologies by 159% to $18 billion as the global manufacturing powerhouse bids to transform itself into an innovator. Still, it will miss the goal of 3% of GDP, a ratio maintained by several developed countries to maintain their edge in technology.
  • Environmental technology and new energy are focus sectors. China plans to combat environmental challenges by focusing on sustainable growth. Around 48% of its planned $18 billion investment on emerging technologies will go to environmental technologies, followed by 32% and 12%, respectively, for new energy and smart grid sectors.
  • Foreign joint ventures will be welcomed. China is so keen to emerge as an innovation hub that it is ready to shed its secretive approach and partner with foreign companies. A director in China’s Ministry of Science and Technology says they will support joint research programs developed by foreign research labs or multinational companies with their Chinese counterparts. This will create unforeseen opportunities for western companies.

Hear more views on this subject at the complimentary Lux Research webinar on March 13th at 9:00 EST. Click here to reserve your webinar seat to “The Chinese 12th Five-Year Plan on Strategic Emerging Industries.” The report, “Profiting from Predictable Policy: Interpreting China's 12th Five-Year Plan for Emerging Technology” is part of the Lux Research China Innovation Intelligence service.

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Lux Research, Inc.
Carole Jacques, 617‐502‐5314

Release Summary

China's 12th 5-Year Plan reflects China's shift from a manufacturer to an innovator, as they raise R&D funding for emerging technologies by 159% to $18B, according to Lux Research.


Lux Research, Inc.
Carole Jacques, 617‐502‐5314