Within five years China will be investing a higher proportion of its gross domestic product in research and development than the European Union, as more western companies move their R&D eastwards, the European Commission fears.

At present growth rates, the EU's public and private spending on R&D is set to rise from 1.93 per cent of GDP in 2003 to 2.2 per cent in 2010, well short of the 3 per cent target agreed by EU heads of government as part of the 2002 “Lisbon strategy”.