Chinese Companies Lead Global R&D Growth in 2016, Alibaba Tops Innovation Rankings, Huawei Nears Top Ten

PwC’s management consulting arm Strategy& released its 2016 Global Innovation 1000 research report, showing that Chinese enterprises led the world in R&D spending growth, with Alibaba topping the Chinese innovation ranking and Huawei, a non‑listed company, entering the global top ten for the first time.

In 2016, 130 Chinese companies were included in the Global Innovation 1000 list (up from 123 in 2015), with total R&D expenditure reaching $468 billion, an 18.6% increase over the previous year’s $394 billion. Chinese firms’ share of R&D spending among the top 1000 rose from 5.8% in 2015 to 6.9% in 2016.

This year’s ranking saw Alibaba and ZTE surpass PetroChina to take the top two spots on the Chinese list, marking the first time since 2005 that PetroChina lost its leading position. China Power Construction Group and JD.com entered the Chinese top‑20 innovation list for the first time, ranking 16th and 20th respectively.

Although Huawei is not listed because it is not publicly traded, its 2016 annual report shows R&D spending of 59.6 billion RMB (≈$94.8 billion) in 2015; if included, Huawei would top the Chinese companies and rank 9th globally in 2016 (16th in 2015), placing it between Novartis and Johnson & Johnson, marking Huawei’s first entry into the global top‑10 R&D spenders.

According to Xu Jin, senior partner and head of digital strategy consulting for Greater China at Strategy&, Europe and Japan’s innovation spending declined in 2016, while China’s grew by 18.6%, outpacing North America’s 8% increase. He noted that innovation has become a national development strategy in China, with firms shifting from cost‑competition to technology‑driven competition, leveraging technical advantages for global success.