Emergence as a Global Economic Power } 695
scientific or economic benefit. Heads of institutes were not scientists or engi-
neers, but bureaucratic administrators. Yet they were responsible for hir-
ing personnel, promotion, and assignment to various projects. Success or
failure in innovation or discovery had little impact on an institute’s budget.
Employment at an institute was typically for life. There was little movement
between institutes or across bureaucratic lines.^42
The adoption of the Soviet S&T model in the 1950s, even with all its
defects, contributed to China’s technological advance, because it mobi-
lized resources, including inputs from the Soviet camp, and focused them
on key projects. We will never know what that model might have yielded
in China had it not been devastated by the anti-intellectual policies of
the Anti-Rightist Campaign, the Great Leap Forward, and the Cultural
Revolution. Be that as it may, it is clear that the Soviet S&T model also
imposed on China many of the same endemic weaknesses that ultimately
contributed to the collapse of the Soviet Union. Outside of a few areas of
military research that were privileged with the best personnel, abundant
resources, and protection from political campaigns, the pace of innova-
tion and scientific discovery was slow.^43 There were weak incentives for the
successful industrial application of technologies. The system was wasteful,
squandering huge amounts of money without much result. Areas of real
potential were starved of resources so that unproductive institutes could
continue to function. The advance of China to a world-leading S&T power
required discarding the Soviet S&T model.
Increased familiarity with S&T standards of the advanced capitalist
countries, and intense debate within the CCP elite and among the leaders of
China’s S&T sector, led to growing awareness of the weaknesses of China’s
pre-opening, Soviet-derived S&T system. Market-oriented reform of the S&T
system began in 1985. Except for institutes involved in basic research, military
areas, or public goods (environment, public health, medicine) which could
not reasonably be expected to become self-financing, research institutes were
to become self-supporting. Direct government funding was phased out, as
was top-down designation of research direction. Institutes were to work
directly with industrial enterprises on a contract basis to provide particular
technological services for a fee. “Fee for service” via market contracts was
to replace government budgetary allocations. Institute directors were to be
younger people with science or engineering backgrounds, and were given
far greater leeway in hiring, promotion, and approval of research activities.
Individual remuneration and status were tied far more closely to individual
scientific achievement. Institutes undertaking basic research were to compete
for grants from a newly established National Science Foundation. Finally,
with this redesigned, decentralized, and marketized S&T system, govern-
ment funding was increased substantially.^44 Marketization and decentraliza-
tion of S&T efforts were not intended as a cost-cutting measure. State funding