694 { China’s Quest
States agreed. On December 11, 2001, the PRC entered the WTO as its 143rd
member.Foreign Investment and Technological AdvanceAchieving a high level of science and technology (S&T) is essential if the
PRC economy is to become a world leader. It is essential if China is to es-
cape the middle-income trap in which it would remain an assembler of
low-value-added, labor-intensive goods. It is also essential if the PLA is to
become truly potent. PRC leaders, except perhaps for extreme Maoists during
the Cultural Revolution, have consistently recognized this. This section will
briefly survey China’s S&T efforts touching on its relations with other states.
Because China’s technological level lagged behind both the advanced capi-
talist countries and the USSR in most areas, PRC technology development
efforts focused on catching up with the technological levels of the leading
countries. Two major international aspects of this quest were: 1) acquiring
technologies available in advanced countries but not in China, indigenizing
those technologies by mastering the scientific processes underlying them, and
then copying or reverse-engineering them for production in China; and 2)
achieving an indigenous capacity for scientific research equivalent to those of
leading world scientific powers. These two thrusts continued throughout the
pre and post-1978 periods, although they were pursued in very different ways
in the two periods.
As part of the adoption of the Soviet model in the early 1950s, China copied
the Soviet S&T system. This was a highly centralized and bureaucratically
controlled system with research priorities determined by central authorities
and meshed, at least in theory, to economic development objectives outlined
in the Five Year Plans. A large number of research institutes were set up spe-
cializing in various areas of science and technology and funded by the state
budget. Research projects and directions were decided on by the State Science
and Technology Commission (SSTC), a body set up in 1958 to coordinate sci-
ence and technology efforts and which continued to function until 1998, when
it was replaced by a Ministry of Science and Technology (MOST). Research
institutes reported upward via their organizational channels, and had little
contact with the factories that might actually use the technologies they were
developing. Because of lines of bureaucratic administration, research insti-
tutes also had very little interaction with other institutes working in the same
field. Bureaucratic loyalties and restrictions were strong. Institute directors
would often hoard resources, including personnel and facilities. Redundancy
of efforts and facilities and misallocation of personnel were rife. Decisions
by the SSTC regarding allocation of funds had more to do with working out
a balance between politically influential organizations than with potential