Innovation In China Hampered By Corruption

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Bo Xilai China 2013 2
China's former Chongqing Municipality Communist Party Secretary Bo Xilai looks on during a meeting at the annual session of China's parliament, the National People's Congress, at the Great Hall of the People in Beijing, March 6, 2010.

Corrupt officials in China may be robbing the Chinese of more than their hard-earned cash -- an investigation in Guangdong points to the detrimental effect corruption may be have on innovation there.

In March, the deputy party secretary of the Guangdong provincial science department, Zhang Ming, was added to an investigation that includes more than 50 officials suspected of taking bribes from companies and researchers in exchange for government research and development (R&D) subsidies and grants worth millions of dollars, the Economist reported on Thursday. By some reports, the officials under investigation pocketed as much as 30 percent of the subsidies that they oversaw.

China has been spending more on its research and development budgets in recent years, a trend that increased as the world’s second largest economy expanded and became wealthier. By 2012, China was spending 1.98 percent of its GDP on R&D, beating the European Union’s 1.97 percent. Research and Development spending grew to $168 billion that year, more than tenfold the $10.8 billion it spent in 2000.

But more money devoted to R&D also makes subsidies and grants attractive targets for graft, and experts believe that the bureaucrat-managed system for allocating research grants is smothering China’s capacity for innovation.

“To obtain major grants in China, it is an open secret that doing good research is not as important as schmoozing with powerful bureaucrats and their favorite experts,” wrote Rao Yi of Peking University and Shi Yigong of Tsinghua University, both prominent Chinese scientists, in an editorial in Science. A great deal of time is spent on building these connections, consequently, instead of in the lab working on research, the scientists wrote, according to the Economist.

With the current administration’s well-publicized anti-corruption campaign, R&D may be one of the first sectors to change, as the central government is dissatisfied with the return on its investment. On March 12, the State Council released guidelines on the allocation of research funding, a first step in rooting out corruption in the research community. 

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