China's corporate R&D spending outpaces Europe's in 2018

Alibaba remained the top R&D spender in China for the third consecutive year with US$3.6b .

Chinese companies’ research and development (R&D) spending made up US$60.1b of the total global of $782b in annual investments, according to PwC’s Strategy& Global Innovation 1000 Study. The country’s spending increased 34.4% which is the largest growth globally in 2018.

It was trailed after by Europe which invested 14% in corporate R&D, whilst North America and Japan only saw single digit increases in spending at 7.8% and 9.3%, respectively.

“The number of Chinese companies on the list rose from 125 to 145,” PwC said. “Alibaba topped the list of Chinese companies’ R&D spending, with R&D expenditure of US$3.6b.”

Meanwhile, Amazon maintained its top spot as the largest corporate R&D investor for the second year in a row with US$22.6b.

By sector, the computing and electronics industry accounted for 22.5% of total R&D spending, ranking first among all sectors the study showed. The consumer industry overtook software and internet for the first time in five years as it saw the fastest growth YoY at 26.3%.

“As China forges ahead with its innovation-driven growth strategy, innovation will become the top driving force for development,” PwC Mainland China & Hong Kong consulting partner Patrick Hui said. “In addition, R&D spending has increased in all industries in China, especially in the software and internet, as well as industrial sectors.”

PwC’s Strategy& Global Innovation 1000 study analyses spending from the world’s 1,000 largest publicly listed corporate R&D spenders which are classified into nine industries and five regions based on where their headquarters are located.