The country's spending on innovation is now growing at 25.5 percent a year, compared to a fall of 4 percent in the US in 2009. Growth in major European economies, such as Germany and France, has remained in the single figures.

Even greater sums have been poured into infrastructure development. An estimated 700 billion yuan ($105 billion) was the budget for high-speed railway construction in 2010, Ministry of Railways Chief Engineer He Huawu said.

But the breakthroughs are not merely the result of increased funding.

China has over the past few years transformed from a country that imported technologies to one that leads in innovation. It is now competing for overseas high-speed railway projects - even in the US, which leads the world in freight railway technology but has almost no high-speed rail expertise.

"That's a mark of how well and quickly the technology has been adopted by Chinese companies, who have traditionally only been able to compete on price in bidding for railway and other basic infrastructure projects in the developing world," the Associated Press reported.

The Ministry of Railways started out with the strategy of "innovating on the basis of imported technologies to form our own system", He, with the ministry, had said earlier.

The ministry had filed 947 patent applications in the country by March 2010 and had also started filing applications for intellectual property rights abroad.

Wang Mengshu, professor at the Research Center of Tunnel and Underground Engineering at Beijing Jiaotong University and a member of the Chinese Academy of Engineering, believed: "China has the most advanced high-speed railway technology."

The ministry's plans called for the country's railways to extend for more than 120,000 km by 2020. About 16,000 km will come from new high-speed rail construction.

China has launched three manned spaceships and two unmanned lunar orbiters in recent years. It aims to build a space station by 2020, and will launch two spacecraft - Tiangong-1 and Shenzhou VIII - in 2011 to test its docking technology.

Sun Jiadong, the Beidou program's chief designer, said in an earlier interview: "The rise of China as a big economy and the advancement of technology have laid the foundation for us to pursue progress in aerospace technology... It is important to find our own exploration path based on China's own situation."

Andrew Moody and Tan Zongyang contributed to this story.