The reform of the Chinese national STI funding system

The overall institutional and management platform of the central STI funding system was completely reshaped.

An Inter-Ministerial Joint Council was introduced to coordinate interagency priorities and budgeting, and to prevent overlaps across and within ministries. The Joint Council represents the ultimate and highest authority of the new national STI funding system. It is formed by a total of 31 government bodies, led by the Ministry of Science and Technology (MOST), and including the Ministry of Finance (MOF) and the National Development and Reform Commission (NDRC). It is mainly responsible for approving the overall development strategy of central government STI funding, as well as the layout, setting, major tasks, implementation schemes and management regulations for specific funding programmes.

The Joint Council is also responsible for:

• Approving the composition of a Strategic Advisory and Comprehensive Review Committee: formed by senior technology, industry, and management experts, it is responsible for providing technical advice and support to the Joint Council, so as to improve the quality of decision-making;
• Approving the selection of project management professional agencies: agencies empowered for the daily management and operation of central STI funding programmes, on behalf of the ministries and other bodies in the Joint Council. They organise and collect applications, organise evaluations, and organise funding allocation. A total of seven state-owned not-for-profit organisations have been selected so far (all of them being shiye danwei); in the next years, efforts will be put into encouraging non-governmental professional service organisations to apply as project management professional agencies. *
• Establishing a unified evaluation, inspection, and dynamic adjustment mechanism: MOST and MOF will supervise, evaluate and inspect the results and performance of all national STI programmes to ensure that the expected outputs are met. A dynamic adjustment mechanism will be triggered in case changes need to be adopted to ensure the project’s delivery, or to respond to unexpected circumstances; it will also determine whether certain funded projects need to be extended or terminated. A scientific credit rating system is also created.

These three mechanisms will drive the operation of the new management platform, under the overall guidance and supervision of the Joint Council. Finally, a unified and comprehensive information management system was developed to centralise fragmented and scattered information on national STI funding programmes. This will be done through two main pillars:

• The National Science and Technology Information System, Public Service Platform (commonly referred to as “National Service Platform”), namely the hub of all information on national STI funding programmes, including calls for comments on draft tenders, official tender guidelines, application and evaluation procedures, as well as list of winners and demographics data. Applications to several funding programmes must be submitted online through this Platform;

The National S&T Report Service, namely the platform through which reports on ongoing or concluded projects are publ

* The seven agencies currently selected are:

1. MOST’s China National Center for Biotechnology Development（中国生物技术发展中心）;
2. MOST’s High-Tech Research Development Center（科技部高技术研究发展中心）;
3. MOST’s Administrative Center for China’s Agenda 21（中国21世纪议程管理中心）;
4. MOST’s China Rural Technology Development Center（中国农村技术开发中心）;
5. MIIT Industry Development Promotion Center（工业和信息化部产业发展促进中心）;
6. Ministry of Agriculture Science and Technology Development Center（农业部科技发展中心）;
7. NHFPC’s Development Center for Medical Science and Technology（国家卫生计生委医药卫生科技发展研究中心）.

All of them were reformed to have a standardised structure and management mechanisms, each with independent legal personality, an executive council and supervisory board, institutional chart, etc. It is commonly believed that this delegation of the daily management and operations from central government to professional agencies should increase fairness and transparency. These Project Management Professional Agencies will be referred to in this website as °project management agencies”.

The Notice also outlined five major funding pillars into which the over one hundred then existing STI funding programmes would be channelled and re-organised. By merging and reducing the total number of programmes, inefficiencies and overlaps would consequentially be reduced, leading to an increased and more channelled focus on key strategic and priority areas:

• National Natural Science Fund: focusing on basic research and applied research in natural sciences, particularly in: physics and mathematics; chemistry; life sciences; earth sciences; engineering and materials; information sciences; and management sciences. The Fund is administered by the Natural Science Foundation of China (NSFC), the largest Chinese research funding agency in natural sciences directly affiliated to the State Council, and with a strong reputation of fairness and rigor in the management of its projects and grants.
• National S&T Major Projects (“Megaprojects”): 16 vanguard programmes addressing major key products, technologies and engineering of strategic importance for the country’s economy and industrial competitiveness. Characterised by a strong top-down design and a sharp distinction between “civilian” and “military” application, as well as massive investments, the Megaprojects’ quest is to support and fulfil some of China’s most ambitious R&D tasks over the mid- and long-term, e.g. development of the country’s first domestically-designed passenger aircraft and third-generation nuclear reactor, commercialisation of 5G technologies and vaccines, moon exploration, earth observation, etc. Introduced in 2006, the current 16 Megaprojects will be replaced by 2020 by 16 other new “2030 Innovation Megaprojects” reflecting new trends and priorities in global science and technology development.
• National Key R&D Programmes (“NKPs”): newly-created category of programmes. It incorporates several previously-existing programmes such as the “863 Programme” for R&D, and the “Program 973” for basic research. It supports R&D in areas of social welfare and people’s livelihood, such as agriculture, energy and resources, environment, health, etc. They feature several well-targeted and defined objectives and deliverables to be achieved in a period ranging from three to five years, reflecting a top-down and industry-university-research cooperation design which integrates basic research, technology application, demonstration and commercialisation. It is currently the most active of the five pillars, with a total of 48 NKPs established, each funding every year tens of projects from diversified sources.
• Technology Innovation Guidance Fund(s): consisting of three major funds emerged from a structural re-organisation, re-classification and merging of previously-existing national funds from different government departments. These funds are in turn organised into several sub-funds or funds-of-funds, which invest in priority and strategic areas through venture capital funds, private equity, and risk compensations. The aim is to stimulate the transfer and commercialisation of scientific technology results by supporting the growth and activities of innovative start-ups and SMEs. They are currently very active, with an average of 70 new investments concluded every month.
• Bases and Talents Programme: incorporating several previously-existing programmes from MOST (State Key Laboratories, National Engineering Technology Centres, Innovation Talents Promotion Programme) and NDRC (National Engineering Centres/Labs, National Enterprise Technology Centres, etc). It aims to promote the establishment of scientific bases, and the fostering of top-notch innovative talents and teams by supporting their research activities. Support generally includes: subsidies; priority in applying to national and local STI projects; or tax deductions/exemptions on imports of R&D equipment. It is currently the most inactive among the five pillars, and currently undergoing deep structural reforms.

Detailed factsheets on the five funding pillars are provided on this website, introducing all aspects such as their legal framework, the rules and requirements for participation, figures on international participation, and recommendations to EU stakeholders for participating in them.

It should be noted that long-term funding for research institutions and for institutes of higher education that are directly managed by the central government, including funds from the Ministry of Education, were not covered by this reform. Other ministries also have additional specific programmes within their areas – e.g. the Pilot Demonstration Programme for Big Data Industry Development, from the Ministry of Industry and Information Technology (MIIT) – which do not fall under the scope of this reform. The Organisational Department of the Central Committee of the Communisty Party of China is also the responsible body for programmes such as the “Thousand Talents Plan” and the “Ten Thousands Talent Plan” (see dedicated factsheet on this website).

Finally, it is important to note that this major overhaul of the national funding system for innovation is unfolding within the broader context of sweeping reforms across all areas of Chinese economy and society initiated by the leadership of President Xi Jinping. It recognises the role of science and technology as a main driver of economic development, and builds on the success and position of China as an aspiring global leader, rather than a follower in innovation.