The Budget and Expenditure of the Basic Research: A Comparison between China and the United States

The innovation performance of China has gradually improved, as the gross amount of R&D input has been growing rapidly in recent years. However, the ratio of China's basic research expenditure to the country's gross R&D expenditure has been stagnating at 5% for years. Relatively low proportion of basic research in R&D expenditure has caused much concern among domestic policy makers and academic researchers in China. This paper analyzes on the budget and source of the basic research in comparative perspective mainly between China and the United States. It points out that the level of basic research expenditure in China is not only under the average level of major developed countries, but also incompatible with its current development stage. The main reason for low proportion of basic research of China is too less investment of Chinese enterprises, the resources of basic research funding rely on the investment from central government. In the end, this paper makes some policy suggestion to improve the level of China's investment in basic research by using the enlightenment from the American experience.