Global Times | Listed firms’ R&D focus shows how innovation boosts Chinese brands’ global edge
The half-year earnings reports released by Chinese listed companies recently show a trend - they are increasing research and development (R&D) spending amid the country's emphasis on boosting technological innovation. As some countries are resorting to protectionist measures to shield domestic businesses from competition, Chinese companies' approach is expected to help them further build up their competitive edges in the global market.
Many Chinese listed companies significantly increased their R&D spending in the first half of the year, providing strong internal momentum for high-quality development. Companies are channeling funds into "chokepoint" technologies where domestic breakthroughs are most needed, CCTV News reported on Tuesday.
The mid-year financial report of Shenzhen-based T&S Communications Co, a ChiNext-listed optical communications company, showed that it allocated nearly one-quarter of its net profit to R&D while securing rapid profit growth during the period. This level of investment highlights how Chinese technology firms see innovation spending as the engine of sustainable growth.
In the first half of 2025, A-share firms invested more than 810 billion yuan ($113 billion) in R&D, up 3.27 percent year-on-year and nearly 2 percentage points faster than the same period last year, according to Securities Daily. The acceleration suggests that enterprises are actively positioning themselves for future markets despite external headwinds, laying the foundation for the country's long-term technological competitiveness.
Admittedly, in the short term, aggressive R&D outlays can weigh on margins. But in the long run, such spending raises the value of firms by strengthening their technological edges.
The Securities Daily reported that among the six A-share companies that each invested more than 10 billion yuan in R&D in the first half, electric vehicle giant BYD spent 30.88 billion yuan - an increase of 53 percent from last year, outpacing its profit growth.
BYD's gross profit margin edged down from 18.78 percent to 18.01 percent in the first half, according to the Wall Street Journal. Yet the company's increase in R&D investment is aligned with China's push to move beyond "unhealthy competition" and toward innovation-driven competitiveness. This move is beneficial for the company to consolidate its market leadership in the global competitive landscape.
The relatively high growth rate of R&D spending by Chinese listed companies will help them to secure next-generation technologies and patents. Patents can safeguard innovation, enhance pricing power and improve bargaining leverage for Chinese companies in global markets.
In the first half of the year, China held 5.01 million valid invention patents, up 13.2 percent year-on-year. Of these, enterprises accounted for 3.73 million, or 74.4 percent of the total, according to the China Intellectual Property News.
The shift ties into China's strategy of nurturing new quality productive forces. By boosting R&D and upgrading the industrial structure, companies aim to capture leadership in emerging sectors - from advanced manufacturing and green technologies to digital solutions.
The steady performance of China's foreign trade amid global uncertainties proved that this approach is already bearing fruit. In the first half of 2025, China's exports of high-tech products rose 9.2 percent, marking nine consecutive months of growth. Within this category, the share of exports under Chinese independent brands climbed to 32.4 percent, up 1.2 percentage points from a year earlier. This growth despite external headwinds in global trade highlights how innovation is not only sustaining exports but also upgrading companies' position toward higher value-added segments in global supply chains.
For China's listed companies, R&D is no longer just an accounting entry - it is the anchor of long-term valuation and global competitiveness. Short-term profit compression is the price of securing future leadership. The surge in corporate R&D validates the national strategy of innovation-driven growth.
As global demand fluctuates and supply chains encounter disruptions, Chinese firms are racing to secure patents, develop proprietary technologies, and redefine their role in the global economy. The strong performance of Chinese tech and innovation companies in the capital market demonstrates investor recognition, showing that "technology dividends" are set to reshape the global supply chain's perception of Chinese brands.