China will overtake the European Union in spending on research and development within two years, the European Commission warned today.
The Commission has long urged member states to meet a target of spending 3 per cent of gross domestic product on R&D by 2010 as part of the EU's push to become a knwledge-based economy.
But a new Commission report showed EU spending on R&D in 2005 was 1.84 percent of GDP far behind target and barely ahead of the figure for the mid-1990s.
"As a result, R&D intensity in EU-27 remains at a lower level than in most of the other major world economies such as the U.S., Japan and South Korea," the report said.
"Moreover, new emerging economies such as China are rapidly catching up. If current trends persist, it is expected that China will have caught up with the EU by 2009," it said, adding Russian spending was also rising fast.