Chinese firms' R&D spending rises the highest

The growth rate of R&D spending by companies in China and India led all geographic regions last year though they lagged behind in actual spending, a study by global management consultancy Booz Allen Hamilton found.

The company's third annual study of the world's 1,000 largest corporate R&D spenders, titled "Global Innovation 1000", found that these corporations increased their research and development spending last year by twice the amount in 2005.

The study found that Chinese companies are racing to catch up with R&D spending in developed markets, showing they have taken the cue from the government to ratchet up their efforts to make China a knowledge-based economy.