China's R&D spending falls in US dollar terms for 1st time in 13 years

China’s annual private sector investment in research and development in US dollar terms fell for the first time in 13 years, hurt by a weaker yuan and tight credit policies, according to a new report.

China’s largest listed companies spent a combined US$45.2 billion on R&D over the past year, down 3.3 percent year on year, said the report covering the world’s 1,000 largest listed firms released this week by PwC consultancy Strategy&.

Strategy& attributed the fall in R&D to the weaker yuan last year and tight credit policies impacting investment in the industrial sector, which spends more on R&D than any other sector in the country.

But in yuan terms, R&D spending rose 8 percent year on year, but it was down from double-digit growth shown in last year’s report.

Globally, R&D investment by the 1,000 largest listed companies rose 3 percent year on year to exceed US$700 billion for the first time.

For the first time, a Chinese company — Alibaba — made the global Top 10 Most Innovative Companies list with annual R&D investment of US$2.5 billion.

Strategy& excluded Huawei from the list due to its status as a non-public company. Huawei is the biggest spender in China and the 8th largest in the world, with US$11 billion.