More Chinese manufacturers plan to increase their research and development expenditure in the next two years, according to a survey published by KPMG Monday.
The firm's report shows 93 percent of Chinese firms plan to spend at least 4 percent of revenue on R&D over the next 24 months, compared to 65 percent in the past two years.
In contrast, 59 percent of global manufacturers spent over 4 percent of revenues on R&D in the last two years, while 74 percent said they plan to do so in the next 24 months.
The report is based upon a survey of 386 senior executives, including 40 from China, across six industries - aerospace and defense, automotive, conglomerates, consumer products, engineering and industrial products, and metals.
"Many of China's manufacturers are now looking to innovation and expansion to achieve their growth targets. China's government is already taking significant steps to encourage entrepreneurship and innovation as a way to spur economic growth," said David Frey, a partner of KPMG China.
On the flipside, 48 percent of respondents highlighted R&D inefficiencies as a key challenge for their business in the next 24 months, in addition to intense competition and pricing pressures.
Meanwhile, 58 percent of respondents in China identified sales growth as one of their top strategic priorities in the next two years, followed by development of new products (53 percent) and reducing cost structures (43 percent).
