PRC State Council "Decision on Accelerating S&T Development"

A report from U.S. Embassy Beijing November 1996

Summary. The State Council 'Decision on Accelerating S&T Development' outlines China's S&T development strategy for the next several decades. It decrees that S&T research must become closely tied to the market; S&T is no longer the province of the old Soviet-style institutes but the universities and private industry should do research as well. The "Decision" calls on research and institutions of higher education to create joint ventures with Chinese or foreign venture capital in order to accelerate the transfer of S&T advances to industry. State Council goals include boosting total S&T spending to 1.5 percent of GNP by the year 2000, protecting the environment, achieving sustainable development and indigenization of S&T creation capability in key areas of manufacturing technology and systems design. Additional cables in this series examine the detailed explanation of this policy in the State S&T Council report 'Science and Education for a Prosperous China' written for CPC and government officials. End summary.

State Council Decision Outlines New Chinese S&T Policy

The Central Committee of the Chinese Communist Party (CPC) and the State Council on May 5, 1995 issued their 'Decision on Accelerating Scientific and Technological Development'. This Decision became the central theme of the National Conference on Science and Technology held on May 26 - 28 at the Great Hall of the People. The opening of this conferenceboasted important S&T policy speeches by President Jiang Zemin and Premier Li Peng. The Chinese State Science and Technology Commission (SSTC) report 'Science and Education for a Prosperous China' written for CPC and government leaders who will implement the "Decision", develops in greater detail the policies described in the "Decision". The policy prescriptions of the SSSTC report gain considerable urgency in the context of a brutally frank assessment of China's difficulties and prospects.

This report the May 5 CPC Central Committee and State Council "Decision". The headers in this cable are the headers in the "Decision". The section numbers in parentheses at the beginning of each paragraph of the summary correspond to the numbered sections of the "Decision".

Put into Practice Deng's Ideology 'S&T is the Chief Productive Force'

(begin section 1) Comrade Deng Xiaoping's ideas on science and technology are an integral part of the theory of the construction of socialism with Chinese characteristics and guide China's science policy today. As the Chinese science and technology adjusts to the socialist market economy and the new S&T system, an organic relationship between S&T and the economy is developing. S&T makes very important contributions to Chinese economic construction and social progress, the strengthening of the nation, and raising the living standards of the Chinese people. Increasingly the Chinese national economy depends on S&T progress to drive growth. Yet the idea that S&T is the chief productive force has not been fully put into practice because of old thinking; old systems block the linking of S&T and the economy.

(begin section 2 - 3) China must rely on S&T to solve an array of Chinese problems such as inefficient industrial structure, technological backwardness, and low labor productivity. The strategy 'Science and Education for a Prosperous China' means putting into practice the idea that 'S&T is the chief productive force', recognizing that education is fundamental, and thus valuing highly the contributions that S&T and education make to social and economic progress. The productive force of S&T can only be unlocked by deepening S&T structural reforms to unlock the creativity and initiative of S&T workers.

(begin section 4) China should set out to achieve by the year 2010 the following goals:

-- Strengthen the S&T system and create organic links between S&T and the economy;

-- Make S&T prosperous and train a new generation of S&T workers;

-- Achieve significant gains in agricultural, industrial R&D, basic research and high technology;

-- Increase the proportion of economic growth attributable to S&T progress;

-- China's accomplishments in science and technology should approach or match those of the advanced countries in some fields

-- Considerably increase China's capability to create technology indigenously and master key industrial technologies and systems design technologies;

(begin section 5) The principle guiding China's S&T policy should be:

-- The prime mission of S&T is to solve important questions of social and economic development. Goals, organization structure, regulations, plans should reflect the organic links between S&T and the economy.

-- Reform propels S&T progress. The government should make full use of market forces to stimulate S&T progress.

-- Insist on the combination of autonomous research and the importation of foreign technology in order to enhance the transformation of S&T progress into results that can be used by industry.

-- Bearing in mind the international S&T trends and China's situation, Chinese S&T capacity should focus on limited objectives and concentrate its resources where suitable for achieving breakthroughs.

-- Respect knowledge, talent and permit people to develop their talents. In academic research insist on academic democracy, nd make important decisions in a scientific and democratic way.

Energetically Promote Agricultural and Rural S&T

(begin sections 6 - 8) China must rely on S&T progress to ensure that its growing population is adequately clothed and fed. China should, where appropriate, import foreign improved crop varieties and technologies. S&T should account for 50 percent of the growth in agricultural production by the end of the century. Special emphasis should be placed on the development of new crop varieties, preventing natural disasters, agricultural environmental protection, water-conserving irrigation techniques and more efficient methods for applying fertilizer. Improve the level of S&T work in the countryside so as to foster the development of rural industry that can absorb surplus agricultural workers.

S&T Progress For Industrial Quality and Efficiency

(begin sections 9 - 12) S&T is the key to reforming the industrial structure, boosting labor productivity, increasing economic profitability, and creating new generations of industrial products. Industry, universities and research institutes should join together to create corporate entities which will speed the transformation of new S&T into results useful to industry. China should develop information networks and utilize information networks to boost the productivity of the manufacturing, financial and other sectors.

Develop High Technology and High Tech Industry

(begin sections 13 - 15) The Chinese government should give high priority to the support of tech industry through tax, loan, and purchasing policies. The performance, quality, and market competitiveness of Chinese high tech products should be improved so that high tech becomes one of the main strengths of the Chinese economy. The government should encourage medium and large enterprises to work closely with research institutes and universities to develop high tech products. Research institutes and universities should form high tech companies. Private companies too are an important force in the high tech field and should be encouraged. China should try to approach or reach the level of the most advanced countries in the fields of electronic communications, biology, new materials, new energy sources, aeronautics and oceanic studies. China ought to improve the utilization of high technology by China's defense industry, especially for weapons development and ought to place special stress on dual use technologies and the transfer of military technology to civilian use.

S&T Progress Spurs Social Development

(begin sections 16 - 17) Fully implement 'China's Agenda 21' commitments. Rely on S&T to control population growth, improve the educational level of the Chinese population, rationally develop China's natural resources, protect the environment, and achieve economically and socially sustainable and harmonious development. China must protect the environment, the ecological balance, and its natural resources. China should concentrate on several strategic fields for social development such as population, resources, medicine and public health. We must insist on the principle that economics, the environment and social benefits are all aspects of a whole. We must protect the environment and use our resources in a sustainable manner. China should develop clean energy and clean manufacturing technologies.

Strengthen Basic Research

(begin sections 18 - 20) Basic research creates great social and economic transformations and gives birth to new technologies. It should be oriented towards national goals and joining in the progress of world science. Researchers should be involved in teaching -- people should be allowed to hold teaching and research positions at the same time. Basic research should be strengthened in China's institutions of higher education.

Create New S&T System Suited to Socialist Markets

(begin sections 21 - 22) A new S&T system suited to the needs of the socialist market system and the objective laws of S&T development will release the productive forces of S&T. According to the principle 'Anchor at one end and let the other end be free' (wenzhu yitou, fangkai yipian) the state should support basic research but applied research should find support from the market. Each government department, enterprise and local S&T organizations should unite to promote local economic development. Some of these organizations could make use of foreign investment to make joint ventures with foreign investors. These enterprises, which are responsible for their own profits and losses, can make all business decisions on their own. The S&T personnel system should be reorganized to enable S&T personnel to move among organizations. This will unlock the creativity and initiative of scientific workers.

(begin section 23) The flow of information needs to be improved by creating technology transfer and exchange organizations. Two way networks need to be created between the technology supply side and the industry demand side. In this way science and technology work will respond more closely to the needs of the market. Competition needs to be introduced into the science and technology work and management system. There must be fair competition in scientific research in all areas, be it central government, local government or industry. Work should be awarded to units after open bidding. Employment and promotion of scientific and technical workers must be the result of open competition. A science and technical system with open competition, cooperation, and movement of personnel among organizations will be a science management system that brings out the best in people.

(begin section 24) Give scientific and technological institutions autonomy. Create a system of organization in which responsibility is clear, science is separated from administration, which is characteristized by 'openness, personal mobility, competition and cooperation'. Professional and temporary contract workers should work together. Science and technology workers income should be linked to the economic benefits of their work. The serious weakness of many managers and divided authority should be corrected. Science managers at all levels should improve their coordination and cooperation with economic departments.

(begin sections 25 - 26) China should strengthen and make more complete its lawsmaking and enforcement of regulations on science and technology in line with the 'PRC Law on Progress in Science and Technology'. Legislation should protect intellectual property so that the legal rights of scientific organization, scientific and technical personnel and inventors are not violated. Laws should be enforced so as to punish violations of intellectual property rights, eliminate fake science and technology, protect the rights of the people and to stop various sorts of anti-scientific activities.

Create High Quality S&T Workforce; Improve Public Understanding of S&T

(begin sections 27 - 29) S&T workers exploit the chief productive force; they are the main force for the construction of socialist modernization. China must fully implement the 'Plan for the Reform and Development of Chinese Education' and train great numbers of new S&T workers. S&T propaganda and popularization among the people must be strengthened -- this is an important aspect of the construction of socialist spiritual culture. More people should be trained in dialectical materialism and historical materialism. S&T popularization should be used to smash superstition and foolishness.

Increase Avenues and Levels of S&T Investment

(begin sections 30 - 34) The total combined investment by all of Chinese society in S&T should reach 1.5 percent of GNP by the year 2000. The increase in S&T investment by the center and localities will outpace revenue growth. Funds should be set aside for special projects and China should develop new channels for raising funds to support S&T projects such as bank loans and venture investment capital. An S&T venture capital system should be created. The State Council should develop new measures to promote S&T progress.

Increase Openness, Increase International Cooperation

(begin sections 35 - 36) International S&T cooperation is an important aspect of China's policy of openness to the outside world. China is ready to enter into cooperation with any country depending upon the needs of Chinese S&T and economic development, according to the principles equality and mutual benefit, mutual enjoyment of benefits, protection of intellectual property rights, and respect for standard international practice. Cooperation can be bilateral, multilateral, with private parties or with governments in foreign countries at any level or through any channel. The government should give export credits and tax rebates to exporters of high tech products. S&T workers, especially young and middle-aged ones, should participate in international scientific meetings.

Strengthen the S&T Leadership of the CPC and Government

(begin sections 37 - 38) Leading the masses in the implementation of the policy 'Science and Education for a Prosperous China' is the sacred responsibility of officials at every level of the CPC and government in the period. Leading CPC and government officials should improve their understanding of S&T. The State Council and provincial governments should hold at least two meetings annually devoted to S&T work. Every level of CPC and government officials strive to strengthen the organic links between S&T advances and social and economic progress. When making important decisions about economic construction and social development the CPC Central Committee and government should listen to a broad range of scientific and expert opinion in order to make their decision making more scientific and democratic. This is an important aspect of democratic centralism.

(begin sections 39 - 40) A special leading committee of the State Commission on Science and Technology is to be created to strengthen overall macro decision making and leadership of Chinese S&T. The SSTC, which has responsibility for S&T work in China, should strengthen its macro level management and coordination of science throughout China. Promoting the development of S&T is the task of the entire CPC and the entire Chinese people. People in every field, but especially CPC youth organizations, labor unions and the mass media, have an important role to play in creating a society which respects knowledge and human talent. S&T workers stand in the front rank of those liberating the productive forces of S&T and making contributions to the prosperity, wisdom and strength of the motherland.

Comment

The 'Decision' of the CPC Central Committee and the State Council clarifies policies which have been in effect for some time already. However, as with many other decisions of the State Council, the emphasis is on what ought to be done as opposed to how the decision should be carried out.

It is interesting that this decision reflects an intense desire that was first articulated in China in the late nineteenth century to incorporate science and technology in China as the pivot for China's economic growth. Therefore Deng Xiaoping's call 'Science and Technology is he chief productive force' is a cry that has been uttered, but at times not heeded, over the last 100 years. (section 1)

The 'Decision' is noteworthy because it articulates a need for China to use market forces to propel indigenous technologies. (section 5) However, realizing that China cannot compete in all areas, the 'Decision' calls for concentration in a few technologies (sections 13 - 15) and on boosting the role of high tech in delivering competitive products (sections 13 - 15). The 'Decision' focuses on boosting agricultural and industrial production as well as on the importance of information networks (sections 6 - 12). Despite recent orders from the Public Security Bureau to Internet network centers with overseas connections to filter out certain pornographic or politically incorrect web sites, the trend of rapidly increasing growth and investment in computer networks in China are clear and likely to accelerate. Information networks are likely to have a revolutionary effect on the effectiveness of science and technology in the Chinese economy.

The calls for management changes are also noteworthy. The need for merging of training and research, heretofore divorced (sections 16 - 20) (as in the Soviet model), mobility of personnel between organizations (sections 21 - 22), improved flow of information, competition and open bidding on projects (section 23), to tie pay to economic results (section 25), protect intellectual property (section 26), and appeals to allow talent to flourish through academic democracy, and, by implication, away from structures dominated by seniority and age.

The 'Decision' devotes important sections (sections 16 - 17) at its core to social development, emphasizing sustainable development, the environment, and social benefits such as public health that accrue from science and technology and a determination to carry out China's Agenda 21 commitments. It also emphasizes the importance of the appropriate use of resources.

The 'Decision' is vaguest on how research will be funded. It does focus on the need for the market to support applied research and discusses for the first time the role of venture capital in funding research and development.

"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.