Public financing for science, technology and innovation

Marina Yue Zhang and Zuanxu Chen

Chapter 16 in Handbook of Public Finance in China, 2026, pp 357-385 from Edward Elgar Publishing

Abstract: This chapter delves into China's public financing strategies for science, technology, and innovation. Enshrined in national initiatives, China's strategic approach to technology and innovation has relied heavily on the absorption and secondary innovation of imported technology, which has facilitated China's catch up in science and technology in the past. However, this model has limitations and hence necessitates a shift towards investments in basic science and original innovation, which require public financing. Amid domestic and international challenges, China's journey towards high value-added innovation, especially in critical technological fields such as semiconductors, artificial intelligence, and clean energy transitions, hinges on technological breakthroughs and mass industrialisation. This chapter scrutinises China's public financing schemes designed to foster technological independence in strategic sectors, their impact on R&D and innovation, and their broader significance in addressing China's domestic and geopolitical challenges.

Keywords: Public financing; Science and technology; Mass entrepreneurship and innovation; Industrial subsidies; Government venture capital; Government guidance funds (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035311705
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