Chinese internet companies’ continuous research and development improvements are driving their emergence as first-tier international players with core technologies, analysts said.
Xie Shaofeng, director of the Informatization and Software Service Division at the Ministry of Industry and Information Technology, said domestic internet companies are making steady progress in R&D, with a string of internationally competitive players emerging in the fields of cloud computing, big data, artificial intelligence and other technologies.
Last year, China’s top 100 internet companies’ combined R&D spending exceeded 100 billion yuan ($14.6 billion) for the first time, hitting 106 billion yuan as spending rose 41.4 percent year-on-year, according to a report released by the MIIT’s information center and the Internet Society of China.
These leading online companies have 197,000 R&D staff in total, accounting for 19.4 percent of their headcount, said the report, titled China’s Top 100 Internet Companies.
As of 2017, the enterprises boasted 22,000 patents, 13,000 of which are invention-related, including globally influential tech.
“More efforts will be made to pursue breakthroughs in general processors, fundamental software and other crucial technologies. We will also accelerate steps to draft common standards to further the development of the internet,” Xie said.
Thanks in part to heightened R&D capabilities, last year, China’s top 100 companies, led by e-commerce heavyweight Alibaba Group Holding Ltd, raked in 1.72 trillion yuan in revenue, up by 50.6 percent year-on-year, according to the report.
The companies’ combined profits in 2017 exceeded 270.7 billion yuan, marking a surge of 82.6 percent year-on-year. Although Alibaba and second-placed social networking behemoth Tencent Holdings Ltd accounted for 60 percent of all the profits, 11 of the businesses saw profit margins exceeding 40 percent.
Li Dewen, deputy director of the MIIT’s information center, said cyber technologies are where investments are most intensive, innovation most active, and application most widespread.
“As the core engine of innovation, Chinese internet companies have already made breakthroughs in many areas. But more efforts are needed to tackle common bottlenecks that are limiting the development of whole industries,” Li said.
Companies are scrambling to get ahead in that direction. Alibaba, for instance, has appointed a group of seasoned scientists to spearhead its efforts in AI, a move that will further galvanize the company’s technological capabilities.