According to a report delivered on Thursday by the Jiusan Society, Chinese enterprises have seen very little budgeting for research and development for years. Annual per capita spending is just 1.2 percent of the amount in the United States, and 1.1 of that in Japan.

"That is a disconcerting figure for China as it endeavors to improve its output and quality of products by applying new and high technologies," the report said.

In large and medium-sized enterprises, the ratio of R&D spending to sales was 0.83 percent in 2002, compared with 2.5 to 4.0 percent in major developed countries.

By 2001, only 25 percent of China's large and medium-sized enterprises had set up their own R&D centers.

The report said the structure of government spending on research and development is also inappropriate. Only 7.2 percent of fiscal allocations for scientific and technological undertakings went directly to enterprises in 2001. The rest went to independent scientific research institutes and institutions of higher learning, where theoretical research is focused on to the exclusion of practical and commercial applications.

The Jiusan Society is one of China's non-communist parties, composed mainly of senior-and middle-ranking intellectuals scientists and engineers.

(eastday.com March 11, 2005)