CHINA’S R&, D POLICY
We’re now seeing actual- world policy implications. Asked afterwards what measures the government was taking to handle the slowdown, he pointed to” money- for- clunkers” plans to switch older equipment and machinery, as well as China’s beautiful incentives for research and development spending.
This expense is real and substantial. The People’s Bank of China’s creation of a 500 billion yuan ( US$ 69 billion ) facility in April, in addition to an identical 200 billion yuan facility in 2022, makes that program not much smaller than what the PBOC has dedicated to rescuing the housing market, which is currently amounting to about 1.08 trillion yuan.
Companies that invest in research and development may withdraw twice the amount they spent from their tax payments since last year, which is a significant opportunity. R&, D saving rose 8.1 per share in 2023, accounting for about 2.6 per share of gross domestic product, according to government figures.
Despite all this support, China is still strongly in second spot. The most recent year for which data is attainable, it was only 3 % of the US$ 885.6 billion that came out of the US in 2022, which is the most recent year for which data is available.
That proportion has remained essentially unchanged for some time. Given the support for R&, D in the Inflation Reduction Act, it’s possible that America’s guide over China is, if anything, widening.