Ready to be world's largest spender on R&D

The NBS said China's R&D expenditure accounted for 2.54 percent of GDP last year, which is 0.11 percentage point higher than the previous year. Though the figure is close to the average of 2.67 percent for Organization for Economic Cooperation and Development economies, it gave China 13th place globally, far behind some developed economies like the United States, which tops the table.

"Although the R&D intensity of China has been continuously increasing, the country's investment in basic research is insufficient, which directly leads to a relative lack of innovations based on complex, underlying supporting technologies and scientific research," said Liu Qiao, dean of the Guanghua School of Management of Peking University, in a note.

Liu said China's position index in the global value chain in 2018 was 0.01 while the US' was 0.29. This means, the US continues to be at the absolute upstream of the GVC and has strong control over core technologies and raw materials. This gives it the power to create constraints for other countries and economies downstream in the GVC.

"To change this situation, China must increase investment in basic R&D and promote Chinese industries to move upstream in the global value chain. Only when breakthroughs are achieved in basic research can we truly break developed countries' vice-like grip on key technologies," he said.

Wu Hequan, an academician at the Chinese Academy of Engineering, said basic R&D has a high degree of uncertainty, and requires space for trials and errors before success can be attained.

"But if everyone aims for success, there will be few opportunities for disruptive innovations," Wu said. "Thus, it requires joint efforts from researchers, the government and social forces like companies."

To encourage such R&D and support full-time research professionals under 45 working in China, Ma Huateng and a group of renowned scientists initiated the Xplorer Prize, for those working in fields like mathematics, physics, chemistry, new materials, astronomy, geoscience, advanced manufacturing and other frontier technology areas.

Each prize winner receives 3 million yuan over a period of five years — unprecedented in scale for scientific awards in China. Researchers and scientists who are awarded the prize are free to use the money in the way they deem fit.

In late September, a cohort of 48 young scientists was awarded this year's Xplorer Prize. One of them is geologist and planetary scientist Joseph Ryan Michalski, an associate professor at the University of Hong Kong and a US national, the first non-Chinese to win the prize for his studies on Mars. As of September, 248 young scientists had been awarded the prize. The research achievements of seven awardees have made it into the Top 10 of China's annual scientific advances.

Zhou Huanping, a professor at Peking University and an Xplorer Prize winner, said she gathered more confidence to shift her R&D focus from "short-term and easy projects" to those with "higher uncertainties but greater significance".

Xi Dan, senior vice-president of Tencent, said: "Tencent's aim is to make the most of the flexible advantages of social funds, strive to become a useful supplement to nationally funded basic scientific research.