China's private sector has become a key pillar of the country's innovation ecosystem, contributing over 50 percent of research and development (R&D) expenditures and personnel and over 70 percent of technological breakthroughs.

Total R&D expenditures for the top 1,000 private firms in 2023 reached 1.39 trillion yuan ($197.5 billion), up 4.78 percent compared to a year before. The manufacturing sector emerged as a major contributor, following by information transmission, software, IT services and the construction sector. The number of valid patents has been steadily increasing, reaching 1,119,407 in 2023.