China spent over 1 trillion yuan (US$$160.8 billion) on research and development (R&D) in 2012, representing 2 percent of the country's gross domestic output (GDP).
According to a Xinhua report on Saturday, businesses operating in China invested the most in such initiatives, accounting for 74 percent of total R&D spending in the region.
Quoting China's Minister of Science and Technology Wan Gang, the report said that China's innovation capability had been "greatly boosted" in the past five years. R&D contributed 51.7 percent to China's economic growth in 2011, compared with 48.8 percent in 2008, Wan added.
A ZDNet report in 2011 noted that while Chinese IT companies' R&D spending in 2011 was behind their peers in the United States and Japan, this figure was on the rise. To encourage R&D in IT products, the Chinese government had implemented preferential policies in taxation, and merger and acquisitions for corporations with higher R&D to net sales ratios, the report added.
In another ZDNet report in 2012, market analysts noted that tech innovation would shift toward China due to market opportunities, strong capital availability, as well as government incentives around certain IT segments. Frederic Giron, principal analyst at Forrester Research, said that more technology companies were investing in China to develop R&D centers, while leveraging a pool of scientific graduates from the country's strong education system.