The central government will allocate 71.6 billion yuan (8.8 billion dollars) from its budget for science and technology in 2006, up 19.2 percent over last year, said Zhang Shaochun, assistant minister of finance.

The State Council, or cabinet, last month said 2.5 percent of China's gross domestic product (GDP) would be set aside for research and development over the next 15 years, up from 1.23 percent in 2002.

Xu Guanhua, Minister of Science and Technology, said unless the country keeps up its investment in the science and technology sector, it will not be able hit the national target of doubling its per capita GDP by 2020.

"Without progress on science and technology, it would be very hard to reach our target of becoming a well-off society," he told a press conference on the sideline of the annual parliament session, the National People's Congress.

The government will not only allocate more money but also encourage all segments of society, including companies, to put emphasis on research and development through measures including tax incentives.

China must innovate and develop technology to keep up with globalisation, Xu said.

"With the rise of labor cost, (our) comparative advantage is weakening," he said. "We don't have any choice."

In the coming five years, the country will increase spending in key scientific infrastructure and will also invest in 16 projects including nuclear power stations and high-speed rail technology, Zhang Xiaoqiang, vice chairman of the National Development and Reform Commission said.

Other types of research will also be targeted, including biomedical sciences and coal mine technology.

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