Shanghai Provides Up to $1.4M to Help Firms Address R&D Investment Challenges

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Shanghai has become the first city in China to implement policies aimed at boosting corporate investment in fundamental research to secure a leading position in technological innovation, offering annual subsidies of up to 10 million yuan (approximately $1.4 million).

Businesses that dedicate over 100 million yuan (around $13.9 million) annually to basic research are eligible for a 10 million yuan subsidy. These measures, unveiled yesterday, span areas such as participation in decision-making processes, investment incentives, and ecosystem development.

Additionally, companies investing between 50 million yuan and 100 million yuan can qualify for a 5 million yuan (about $696,500) subsidy, while those spending between 10 million and 50 million yuan will be awarded 2 million yuan. The city also introduced new management guidelines for basic research under the Explorers Program to foster deeper collaboration among enterprises, universities, and research institutions.

These initiatives are designed to address practical challenges faced by tech companies in innovation and to resolve the structural issues surrounding basic research investment in Shanghai, according to Qu Wei, deputy director of the Shanghai Science and Technology Commission. The measures aim to provide both encouragement and guidance at the institutional level to help find solutions to local industry problems.

Last year, basic research accounted for 11 percent of Shanghai’s total R&D expenditure, surpassing the national average of 6.9 percent, though it still falls short of global norms. Compared to other global centers of technological innovation, Shanghai’s basic research capacity needs strengthening, with domestic firms still developing their ability to support fundamental research and lead collaborative innovation efforts, Qu noted.

Since its launch in 2021, the Explorers Program has attracted 22 top tech companies that contribute scientific questions, develop guidelines, and co-invest alongside the Shanghai Science and Technology Commission to advance scientific R&D. Companies such as the Shanghai Nuclear Engineering Research & Design Institute have successfully connected basic research to industrial applications through this initiative.

Another new effort involves establishing the Shanghai Qiyuan State-Owned Assets Innovation and Source-Generating Public Welfare Foundation, marking the first basic research-focused public welfare fund within the national system of state-owned asset supervision and administration. Initiated by 16 state-owned enterprises in Shanghai, the foundation will prioritize cutting-edge and interdisciplinary fields like quantum technologies, controlled nuclear fusion, and neuroscience. Its goal is to connect innovative scenarios, incubators, industrial funds, and other resources while nurturing the brightest young talents.

Shanghai also plans to increase the involvement of industry experts in municipal technological programs, support joint research platforms between universities and businesses, and develop more diversified investment systems, according to Zhao Zhen, deputy director of the city’s education commission.