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[BEIJING] China will overtake Japan to become the world's second biggest spender on research and development by the end of 2006, according to a forecast released on Monday (4 December).

But the estimates by the Organization for Economic Cooperation and Development (OECD) conflict with official Chinese figures, and a senior Chinese science policy advisor warns the report might have overestimated China's spending.

The OECD says China will have spent over US$136 billion on research and development (R&D) in 2006, more than Japan's predicted US$130 billion.

If correct, this makes China the world's second biggest spender on R&D behind the United States, estimated to invest US$330 billion this year.

But the OECD figure is quite different to the official Chinese figures. According to China's National Bureau of Statistics, the country's R&D spending in 2005 was about US$30 billion.

With a 20 per cent projected growth for this year, it should reach $36 billion by the end of 2006, just over a quarter of the amount predicted by the OECD report.

The OECD report is based on China's R&D investment from 2000-2004, with an average projected annual growth of 20 per cent.

Dirk Pilat, head of the organisation's science, technology and industry division, told SciDev.Net that the figure in the OECD report is based on the real purchasing power of the Chinese yuan within China, which is nearly four times the current exchange rate.

This allows the Chinese government to get more for its money than the equivalent amount of dollars would buy in the United States.

But Zeng Guoping, a senior science policy advisor at the Beijing-based Tsinghua University, warned that basing calculations on real purchasing power could overvalue the currency, as much research equipment is purchased internationally.

Speaking to SciDev.Net he said that China has enjoyed perhaps the fastest growth in R&D spending in the world.

But if China wants to remain competitive, he said, it will have to increase its spending on basic science research — for instance in physics, chemistry, genome sequencing and mathematics — from its current 5 per cent of the total R&D budget.

The OECD report also showed that the number of science researchers in China has grown by 77 per cent between 1995 and 2004, reaching 926,000. This is not far behind the 1.3 million researchers in the United States.

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