EU fears China's rising R&D spending
Within five years China will be investing a higher proportion of its gross domestic product in research and development than the European Union, as more western companies move their R&D eastwards, the European Commission fears.
At present growth rates, the EU's public and private spending on R&D is set to rise from 1.93 per cent of GDP in 2003 to 2.2 per cent in 2010, well short of the 3 per cent target agreed by EU heads of government as part of the 2002 “Lisbon strategy”. R&D investment in China was 1.31 per cent of GDP in 2003 but is rising at a double-digit rate.
Janez Potocnik, EU commissioner for research, warned: “The Chinese trend is extremely clear. If the trend continues, they [China] will catch us up in 2009 or 2010. The conditions for R&D in some emerging markets like China are improving and it is obvious that they [European companies] are transferring some of their investments there.” Mr Potocnik's worries about Europe's unfavourable R&D environment range from excessive red tape to insufficient corporate tax incentives and continued divergences in intellectual property protection and patenting across the 25-nation EU. In response to the R&D boom in countries such as China and India, Brussels will this week table new proposals to help retain and attract research funding in the EU.
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