China to spend $55 billion on R&D in 2025 — Semiconductor, AI and quantum computing fields to benefit

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China set to inject $55 billion in research and development of fundamental technologies and innovating enterprises.

SMIC
(Image credit: SMIC)

According to China's Ministry of Finance, the 2025 central budget will allocate ¥398.12 billion yuan ($55 billion) for science and technology, a 10% increase from 2024. This allocation is the third-largest item in the budget, surpassed only by national defense and debt interest payments.

The increase in spending on science and technology by 10%, or $5 billion, emphasizes that China wants to accelerate its national R&D this year, which will speed up its plans for self-reliance in sectors such as semiconductors. $5 billion will not build the country a breakthrough but will rather help with existing projects, particularly in fields such as semiconductors, AI, space exploration, and quantum computing.

Also, remember that China's economy is slowing, and the government frequently disguises economic stimulus plans within large-scale initiatives like this, allowing it to avoid directly labeling it as a stimulus.

In 2024, China allocated ¥361.9 billion for science and technology expenditures, achieving 97.6% of the budgeted target. The government increased support for fundamental research to strengthen China's capabilities in cutting-edge scientific discovery and technological innovation. Investment was directed into major national initiatives, particularly in strategic sectors such as semiconductors, artificial intelligence, and space exploration. Last year, China also introduced support for Small and Medium Enterprises (SMEs), including special financing programs to assist innovative SMEs with risk-sharing mechanisms through national financing guarantee funds. In addition, tax reductions and subsidies were offered to tech enterprises to encourage innovation.

China plans to channel its science and technology spending on 'Science and Technology Innovation 2030' major projects targeting integrated circuits, artificial intelligence, and quantum computing technology. Governments tend to invest money into projects that may not pay off for years, so expect China to invest in fundamental research in the aforementioned areas. This will strengthen China's global competitiveness in these key industries in the coming years, which is particularly important for China's ongoing rivalry with the U.S.

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

11 Comments Comment from the forums
  • joeer77
    They are going to be buying old ass equipment. US export restrictions limit semiconductor equipment suppliers to technology supporting 14nm nodes and older. Perhaps they should improve US/China relations and get export restrictions lifted.
    Reply
  • rluker5
    Remember the CHIPS act?
    Has half of this one year allocation made it out to businesses over the 3? years since it was passed?
    Reply
  • bit_user
    rluker5 said:
    Remember the CHIPS act?
    Has half of this one year allocation made it out to businesses over the 3? years since it was passed?
    Isn't it based on the recipients hitting certain milestones, so they can't just take the money and pocket it?
    Reply
  • aldaia
    joeer77 said:
    They are going to be buying old ass equipment. US export restrictions limit semiconductor equipment suppliers to technology supporting 14nm nodes and older. Perhaps they should improve US/China relations and get export restrictions lifted.
    Nope, they should improve Netherlands/China relations. ;)

    ASML, a Dutch company, is currently the world's only supplier of extreme ultraviolet (EUV) photolithography equipment. Export of these products to China was blocked by the Dutch government several years ago, but considering the worsening relations between the current US administration and EU, who knows.
    Reply
  • ottonis
    I read somewhere that total amount of money spent (government and private combined) on scientific R&D is around 700 billion dollars for both US and China, with some slight advantage for the USA. European countries do also spend a lot of funding into R&D, and this is actually a great thing. By the way: more and better competition usually accelerates scientific and technological advancements, so every Dollar invested in the US-based R&D will indirectly facilitate R&D ellsewhere in the world - and vice versa.
    Reply
  • bit_user
    ottonis said:
    I read somewhere that total amount of money spent (government and private combined) on scientific R&D
    Public funding is very different than private, though. Private funding goes towards end-stage research and applied sciences. You need to complement that with public funding on basic research, or else the pipeline will run dry.

    So, I think it's misleading to add them together, like that.
    Reply
  • FITCamaro
    Admin said:
    China set to inject $55 billion in research and development of fundamental technologies and innovating enterprises.

    China to spend $55 billion on R&D in 2025 — Semiconductor, AI and quantum computing fields to benefit : Read more
    Most will go to paying their hackers to steal technology.
    Reply
  • rluker5
    bit_user said:
    Isn't it based on the recipients hitting certain milestones, so they can't just take the money and pocket it?
    Yes: https://thehill.com/opinion/4517470-dei-killed-the-chips-act/But the bottom line is institutions are receiving much more in incentives in China than the US because our gov is incompetent.
    Reply
  • spongiemaster
    aldaia said:
    Nope, they should improve Netherlands/China relations. ;)

    ASML, a Dutch company, is currently the world's only supplier of extreme ultraviolet (EUV) photolithography equipment. Export of these products to China was blocked by the Dutch government several years ago, but considering the worsening relations between the current US administration and EU, who knows.
    ASML bought their EUV technology from a US company, Silicon Valley Group, who is still there R&D branch for this technology. SVG is based out of California, so ASML can't just pretend like the US doesn't exist no matter how bad the politics are between the two countries.
    Reply
  • aldaia
    spongiemaster said:
    ASML bought their EUV technology from a US company, Silicon Valley Group, who is still there R&D branch for this technology. SVG is based out of California, so ASML can't just pretend like the US doesn't exist no matter how bad the politics are between the two countries.
    ASML bought SVG, not the technology, but the whole company, back in 2001 for 1.6 billion. Not sure if EUV was much advanced back then.
    https://www.eetimes.com/asml-acquires-svg-becomes-largest-litho-supplier/
    ASML export controls are imposed by the Dutch government. So far Netherlands, under US pressure, aligned export controls with US rules.
    https://cepa.org/article/no-carrots-just-sticks-us-bullying-allies-on-china-chips/
    Make US-EU relations bad enough (e.g. by imposing exorbitant import tarifs) and EU /Netherlands my decide to ignore US rules. Actually, as a consequence of the previous Trump era, EU passed a new law against cohercion by third countries: https://policy.trade.ec.europa.eu/enforcement-and-protection/protecting-against-coercion_enIn order to protect ASML, the Netherlands could push the EU to enforce it. This will be bad for everybody, like import tarifs are, but is the kind of things that happen when you treat your allies like enemies.
    Reply