China surpasses U.S. in R&D spending for the first time

China has surpassed the United States in research and development (R&D) spending for the first time, according to the “Science and Technology Indicators 2026” report by Japan’s National Institute of Science and Technology Policy. In 2024, China’s R&D expenditure reached ¥97.1 trillion ($653 billion), a 13.1 percent year-over-year increase, while U.S. spending rose 6.7 percent to ¥95.3 trillion.

China’s R&D growth was largely driven by corporate investment, particularly in the computer, electronics, and optical-products manufacturing sectors. This acceleration is viewed as an effort to achieve technological self-reliance following U.S. export controls on advanced semiconductors and manufacturing equipment.

Parallel to this growth, China’s semiconductor industry is projected to generate approximately $245 billion in revenue in 2025, a 22 percent increase from the previous year. Key drivers include SMIC, which reported record revenue of $9.3 billion, and memory chip manufacturer CXMT, which saw revenue surge 130 percent to over $8 billion. The country’s National Integrated Circuit Industry Investment Fund, or “Big Fund,” raised $47.5 billion in its third phase in 2024 to support these domestic capabilities.