Aiming for Parity With U.S., China Announces Increase in Science and Technology Spending

Having watched U.S. science spending stall out, China is stepping on the gas. In an effort to surpass the United States as the world’s leading scientific and technological power, the Chinese Communist Party (CCP) announced a significant increase in science and technology expenditures on March 11, coinciding with the Two Sessions, the Party’s annual political gathering.

The announced increase, along with additional expenditures for the country’s higher education system, brings Beijing significantly closer to parity with Washington in research outlays while reflecting the CCP’s efforts to plug gaps within its research and development pipeline.

Planned Funding Increase Bolsters China’s Science and Technology Ecosystem

While announcing China’s annual budget, Chinese premier Li Qiang unveiled a planned 8.3 percent increase in science and technology spending, along with a 6.1 percent increase in education spending and a 7.2 percent increase in defense spending. The announcement places Beijing second behind Washington in terms of government expenditures on research and development, with China now spending $172 billion in comparison to the United States’ current budget of $193 billion. These increases were also significantly higher than the projected 5 percent growth economic target issued at the conference.

Buttressed by these projected increases, senior CCP officials, including Xi, called on Chinese firms and institutions to embrace scientific and technological innovation. Having long pushed for China to become a global leader in science and technology, Xi emphasized the role of the country’s educational system in building China into a “science and technology great power” while he called on local officials to “seize on scientific and technological innovations.”

Xi echoed these remarks in later discussions with China’s military as he pushed the country’s armed forces to accelerate the development and application of novel technologies in pursuit of “qualitatively new combat capabilities,” as demonstrated by China’s release of the J-35A stealth fighter.

China Prioritizes Basic Research Funding to Close Gap With U.S.

Beijing views its research and development ecosystem as a key contributor to its economic and military future. Amid a stalled domestic economy and facing rigorous military modernization milestones, Beijing has poured subsidies into science and technology with the combined aim of sparking high-tech-driven growth and outclassing American military capabilities.

These efforts have led to sustained increases in funding for basic research, which has long been a point of vulnerability within China’s efforts to match the United States’ scientific output. Having increased grant funding through China’s National Natural Science Foundation, Beijing has also set ever-higher targets for research output, establishing new domestic academic journals and financing the construction of new laboratories and science-focused industrial parks. Along with driving commercial innovations, this funding is also intended to reverse the country’s legacy of underinvestment and poor management practices, which have previously contributed to waves of Chinese scientists being caught falsifying their findings and forced to issue retractions.

U.S. Must Invest in Its Science and Technology Pipeline

In response, Washington must prepare to invest in its own science and technology base to maintain its lead over Beijing. Congress should prioritize greater appropriations to the National Science Foundation and the National Institutes of Health to counter emerging Chinese innovations, particularly in advanced material sciences and biotechnology.

Along with bolstering federal funding for research, the Trump administration should focus on easing regulatory burdens on other aspects of America’s science and tech pipeline. Working with Congress, President Trump should make good on his campaign promise to ensure that foreign students receive green cards, bolstering the country’s pool of highly educated scientific talent. The administration should also prioritize opening federal lands for cyber-secure data center construction and increase both baseload electricity and grid resilience, critical aspects of AI development and deployment.

Jack Burnham is a research analyst in the China Program at the Foundation for Defense of Democracies (FDD). Johanna (Jo) Yang is a research and editorial associate at the Center on Cyber and Technology Innovation (CCTI) at FDD, where she works on issues related to nation-state cyber threats, critical infrastructure protection, and U.S. cybersecurity policy. For more analysis from the authors, CCTI, and FDD’s China Program, please subscribe HERE. Follow Jack on X @JackBurnham802. Follow FDD on X @FDD and @FDD_CCTI. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.