China and the West are in a race to foster innovation

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China and the West are in a race to foster innovation
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In the coming days Xi Jinping will preside over China’s Party Congress while America’s Congress debates how much money to devote to new research initiatives. You can be sure each will be on the other’s mind

Save time by listening to our audio articles as you multitaskThe anxiety is easy to understand. In 2008 China spent a third as much as America did on research and development and about half as much as Europe, after adjusting for differences in the cost of living. By 2014 it had surpassed Europe. By 2020 its spending was 85% of America’s.

As well as trying to disrupt the flow of technology abroad, America’s government is investing more in innovation. In August Congress approved $370bn of spending on green energy, including lots of money for research.

But on both sides of the Pacific the age of free-flowing private capital left many disappointed. The Communist Party has called the spread of big consumer-tech firms a “disorderly expansion of capital”. It has obliged China’s internet giants to follow its priorities, blocking share sales and issuing abrupt regulations to cow wayward firms. It seems to want less video-gaming and online commerce and moreMany Americans have similar misgivings.

Michael Lauer, head of extramural research at America’s National Institutes of Health , lists a handful of new programs where labs receive funding with far fewer strings attached than normal. The Other Transactions Authorities, a recentHunting for lightbulbs. Last year it launched the $1bn Advanced Research Projects Agency for Health to focus on ambitious biomedical research. The total amount of funding in this category increased from about $4bn in 2021 to nearly $6bn in 2022.

But China is trying to mend some of the failings of its system. It boosted funding for basic research by 16% last year, in an attempt to foster more breakthrough discoveries. It is also trying to reduce centralisation. In July the party announced new rules to increase scientists’ autonomy. “There is evidence that China has recognised the limits of using a blunt metric to evaluate scientists,” adds Mr Wang. “Thus universities are starting to move towards the peer-review system of the West.

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