China's Science and Technology Policy for the Twenty-First Century -- A View From the Top

A Report from U.S. Embassy Beijing November 1996

Summary The Chinese State Science and Technology Commission produced a report 'Science and Education for a Prosperous China' which provides a unique top-down view of Chinese government S&T policy. The book, published by the CPC Central Party School, is a text that teaches CPC and Chinese government officials how to implement the decisions of the May 1995 national conference on S&T policy. The book brutally assesses China's environmental, food production, overpopulation, military and health challenges in the coming century and details S&T strategies the Chinese leadership intends to marshall to enable China to feed its people when the Chinese population peaks at 1.6 billion in the year 2030. Embassy will issue a series of cable reports summarizing and commenting on this important Chinese policy document. End summary.

"Science and Education for a Prosperous China: Important Policy Decisions as China Moves into the Twenty-First Century" [Kejiao Xingguo] is a 500 page report on China's acute economic and environmental problems and S&T policies which will help solve these problems. The volume was drafted by the State Commission for Science and Technology and approved by the top leadership.

"Science and Education" is the product of the May 26 - 30, 1995 Chinese National Conference on S&T which was attended by China's top leadership and 6000 delegates from throughout China. U.S. Embassy science section officers were not allowed to observe this conference. The volume, which can be purchased through the bookstore of the Communist Party of China (CPC) Central Party School in Beijing, was published by CPC Central Party School in June 1995. The report, which became available to the Embassy only recently in a Chinese language version only, is a study guide for Chinese government and Communist party cadres who are implementing S&T policy throughout China.

The report lays out China's S&T policy from today into the early twenty-first century. The report includes:

a) The State Council "Decision on Accelerating S&T Development"

b) speeches by Chinese leaders on S&T, and

c) a 400 page review of the new S&T policy intended to explain and promote the new S&T policy among CPC and government cadres.

"Science and Education For A Prosperous China" examines how can China feed itself, the floating population challenge, what China should learn from the S&T policies of other countries, and lessons Chinese military S&T should draw from the Gulf War, and the overall strategy Chinese S&T should follow after WTO accession when it will face ferocious international competitors on its theretofore protected domestic market.

Decision of the CPC Central Committee and State Council on Accelerating S&T Progress

The CPC Central Committee and the State Council, on May 6, 1995, just prior to the opening of the conference issued the 'Decision of the Central Committee of the Chinese Communist Party and the State Council on the Acceleration of Progress in Science and Technology'. The 'Decision' sets the goal of overall (both public and private) to attain Chinese R&D spending equivalent to 1.5 percent of GDP by the year 2000. It urges Scientific academies and institutes of higher education to set up high tech companies. The 'Decision' notes that science and technology are the chief forces of social and economic development. The leadership wants to direct Chinese science and technology problems such as population control, feeding China's people, the environment (including pollution abatement technologies), and public health (such as pharmaceuticals development).

The 'Decision' calls for a reform of the Chinese science and technology structure to meet the needs of the socialist market economy. Science should move out of the institutes into private enterprises. Government research institutes should enter into cooperative ventures with Chinese and foreign companies, decide by themselves what direction their research should take, and become responsible for whatever profits or losses they incur. The flow of personnel, information, and capital must become faster and smoother so that companies (as well as government research institutes and universities which have created their own high tech companies) can orient their research programs according to market needs (and consequently to what the market is willing to fund).

China's Leadership Speaks -- Assessing the Role of S&T in 21st Century China

President Jiang Zemin: Let the Market Support Applied Research

CPC Secretary Jiang Zemin told the conference on May 26, 1995 that S&T is the key to China's economic progress. Jiang reminded the delegates of the words of Deng Xiaoping -- "Science and Technology are the Chief Productive Forces". "The superiority of the socialist system should be and indeed can be clearly seen in how socialism accelerates the development of productive forces through the rapid advance of science and technology". Jiang called for a massive restructuring of China's science and technology research institutions. Jiang called for continued government support of basic research while applied research should move out of government-supported industry into private research laboratories. Jiang's slogan for restructuring "Stabilize on one side, but let the other side be free" ("wenzhu yitou, fangkai yipian") was echoed by Premier Li Peng and other leaders who spoke at the conference.

President Jiang Zemin: China Needs Indigenous S&T Capability

"We must understand clearly that the world's most advanced technology is not for sale. Science and technology advances rapidly with each passing day; any advanced technology soon becomes obsolete. New ideas are the very soul of national progress and are indispensable to the development of any country. If we do not have our own autonomous ability to create innovation and just depend on technology imports from abroad, we will always be a backward country. A people which does not possess the power to innovate will never take its place among the advanced nations of the world. As a great, independent socialist country we must, in the field of science and technology, be masters of our own fate. Our country already has a fairly respectable scientific base and a fair ability to create new science and technology on own. As we continue to learn from others and to import advanced foreign technology, we must remain focused on raising China's ability to do research and development on its own."

Premier Li Peng: Raise R&D Spending to 1.5 Percent of GDP

Premier Li Peng called for thorough restructuring of S&T institutions. The government wants to gradually reduce the number of S&T institutions supported by the national treasury while managing a smooth transfer of displaced personnel to other S&T jobs. Most S&T institutions should create their own enterprises or cooperate with medium and large enterprises. Li set the goal of total Chinese R&D spending (public and private) to reach 1.5 percent of Chinese GDP by the year 2000. Li claimed that China has made progress in intellectual property rights protection and plans to go further. "We resolutely oppose, however, any foreign country interfering in Chinese internal affairs in the name of intellectual property rights protection", said Premier Li Peng.

State Councilor Song Jian: S&T Creates 60 Percent of GDP Growth In Developed Countries

State Science and Technology Commission Chairman Song Jian reminded the delegates from throughout China of the one hundred years of insults and humiliations at the hands of foreigners China had suffered since the 1842 Opium War. Those experiences taught the Chinese people the importance of science and technology. Today, progress in science and technology now accounts for 60 percent of the growth in the developed countries. The governments of the developed countries are making important investments in technology, especially in information networks. Song acknowledged that although the Chinese people are intelligent and hard working, their labor productivity is only one-fortieth the level of the advanced countries. Only progress in science, technology and education will enable China to boost its productivity and improve the lives of its people. In the middle of the next century China will depend upon advances in science and technology to feed its peak population of 1.6 billion people.

Today the state sector alone employs 1.5 million scientists and engineers along with 18 million technicians. Over the next ten years about ten percent of China's R&D personnel will be working on basic research. Competition will bring about the optimal allocation of research workers. It will end the iron rice bowl and lifetime tenure enjoyed by some research workers. Only by binding science and technology more closely to the economy will China be able, like the advanced countries, to depend upon science and technology to provide most of the nation's economic growth.

Embassy Beijing Comment

These statements confirm with authority that China has had a policy over the last four years regarding restructuring of support for scientific research by weaning bloated establishments such as the Chinese Academy of Sciences. It also affirms a policy of getting the private sector engaged and in supporting applied research through the play of market forces. President Jiang Zemin underlined Chinese government determination to promote innovation and indigenous technology in Chinese industry. Even though Chinese policies for technology transfer from abroad has for some time embodied this philosophy, this is the first time we are aware that the Chinese leadership has articulated this technology indigenization policy so bluntly.

In Embassy's view, China's performance thus far on market-oriented applied research has been poor. The Torch Program, which is the State Science and Technology Commission effort to breathe innovation into state sector industries has had very few successes. The Torch Program appears oriented towards the support of pet projects rather than enabling industry to respond to market forces. One facet of the Torch Program has been the promotion of science parks in the expectation that the parks will breed innovation. Our contacts tell us that the results thus far to both these approaches have been disappointing. Our rejoinder up to now has been that there is insufficient competition in the market to drive innovation since the central government is reluctant to gut the state enterprise dinosaurs that host parasitic employment to favor species better adapted to survival in the new market environment.

In addition, Embassy has emphasized to interlocutors that two other elements appear to be missing in China. One is intellectural property protection that rewards innovators. The other are capital markets, venture capital in particular which is looking to support product development into the market.

A third one is market access to competitive products from abroad. China here faces a dilemma: it needs to open its markets to the outside world to spur competition and innovation among Chinese companies but if the Chinese market becomes dominated by foreign products, how will China ever develop the indigenous technology its industries need to become competitive on world markets? The rest of the report has answers to this particular question in the context of China's WTO accession.

"Science and Education for a Prosperous China" Series

ìScience and Education for a Prosperous Chinaî written by the State Science and Technology Commission (SSTC) (overview) elaborates on the national science policy propounded in the CPC Central Committee and State Council "Decision on Accelerating the Progress of Science and Technology" and in speeches by President Jiang Zemin and Premier Li Peng Chinese S&T Policy: A View From the Top . Reports in this series summarize and comment at greater length this 400 page document written for Chinese Communist Party (CPC) and Chinese government officials. The reports summarize and analyze the economic, food security (including the Lester Brown "Who Will Feed China?" controversy and Chinese Critics Confront Lester Brown) , the challenges of absorbing and creating technology and military aspects of the new Chinese S&T policy which emerged from the May 1995 conference. The reports also summarize and analyze the environmental portion of the SSTC volume. The SSTC volume examines S&T lessons China can draw from the S&T policies of other countries as well as lessons China draws from its own S&T experience since 1949. The report Chinese S&T and the Challenge of WTO Accession reviews the effect of S&T on the risks and rewards China will encounter when it joins the WTO.