Rapid increase in company spending on R&D: report

Chinese companies are increasing their spending on research and development (R&D) at a faster rate than in developed countries, according to a report released Wednesday by consulting firm Booz & Company.

The company's annual Global Innovation 1,000 Study showed the growth in R&D spending by companies in China and India combined was 27 percent from 2010 to 2011, far higher than the levels of 5.4 percent in Europe and 2.4 percent in Japan.

In China, companies' total R&D spending reached $14.8 billion in 2011, an increase of 34.5 percent from 2010, and the figure is expected to reach $65.1 billion in the next five years.

Meanwhile, the number of Chinese companies listed in the report's top 1,000 innovative companies was 47 in 2011, up from 40 in 2010.

The survey polled 1,000 listed companies around the world with the highest expenditure on R&D in 2011.

"The growth shows Chinese companies are paying more attention to R&D," Steven Veldhoen, partner at Booz & Company, said Wednesday.

However, the survey also showed that the R&D spending by Chinese companies only accounted for 2.5 percent of the global total, compared with 37.9 percent in North America and 23.3 percent in Japan.

"The main reason is the differences in industrial structure, as China still depends on labor -intensive industries, but other countries have shifted their focus to high-tech industries," Bill Peng, principal at the company, told the Global Times.

Industries with the greatest R&D investment globally were computing and electronics, health and automotive, but in China the main sectors for innovation are the chemical, energy and IT sectors, Peng noted.

The report found that PetroChina Co is the largest R&D spender among Chinese companies, and it ranked 70th in the global innovation list.

In 2011, the company's R&D spending was $2.04 billion, up from $1.75 billion the year before, but this figure amounted to only 0.66 percent of the firm's sales income, the lowest proportion among all the Chinese companies in the report.