Seems like they already do:

"Research and development (R&D) funding of China reached 3.6 trillion yuan ($496 billion) in 2024, with an 8.3% increase year-on-year, the South China Morning Post reported on Friday.

Investments in basic research increased by 10.5% from 2023 to 249.7 billion yuan ($34.46 billion) in 2024, or 6.91% of the total R&D spending."

Private companies in China also do a lot of basic research, here is a quote from the Huawei founder:

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Q: How do you view basic research?

A: When our country possesses certain economic strength, we should emphasize theory, especially basic research. Basic research doesn't just take 5-10 years—it generally takes 10, 20 years or longer. Without basic research, you plant no roots. And without roots, even trees with lush leaves fall at the first wind. Buying foreign products is expensive because their prices include their investment in basic research. So whether China engages in basic research or not, we still have to pay—the question is whether we choose to pay our own people to do this basic research.

We spend roughly 180RMB billion a year on R&D; about 60 billion goes to basic research with no KPIs, while around 120 billion is product‑oriented and is assessed.

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