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3
Research Priorities arid Funding Mechanisms
Within Chimes overall goal to quadruple total industrial and agricultural
output by the end of the c=mry, He main role of biotechnology is to improve
human health though advances in agncul~re and medicine. Chinese leaders
have Liquefy emphasized that they want to pursue "Bose scientific and
technological result that can yield the best and fastest results." They have also
promoted Me concept that"economic construction must rely upon science and
technology and the latter must cater to He needs of He former." In 1988, an
~nf~mal Among swey was conducted of He People'sDaily, a Chinese newspaper
acknowledged as a reliable indicator of government Sinking and policy prionties,
in which every article and editorial concerning science and technology also gave
prominent mendon to China's economy. Given this ideological framework, it is
not sensing Hat current research priorities are strongly biased toward applied
lather Han basic research
At present, research pnondes are reflected in two major grant programs, the
High Technology Program and He Seventh S-Year Plan, and in He four Pant
programs adminus~d by NSFC. The resources and allocations of these programs
are summarized in Table 1A, and He dis~ibudon of funds between various types
of research institutions is described in Table 2. It should be noted that these grants
cover only research expenses and minimal (typically 10 percent) overhead. Salaries
are paid by the gov~nent administrative agencies Mown as work organizations
or danwei) responsible for the institutions where He research is carried out, for
example, the State Education Commission (SEDC) for major universities, CAS
for its research institutes, He Ministry of Agricultwe, and He Ministry of Public
Heals. In comparison, note that glories and overhead typically consume nearly
6
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RESEARCH PRIORITIES AND FUNDING MECHANISMS
TABLE 1 China's Biotechnology Funding Programs
A. Research Grants
I~.~~am Emphasis Fundg Number Median
(1987) of Grams G=n~
(1987)
High Technology Applied projects in 30 100 1.0 (3_5)b
Program a~cul~e, methane,
and pit engineering
Seventh Applied prods 20 108 0.2 (4)
S-Year Plan
NSK: Basic science 10 326 0.03 (3)
B. Key laboratories
lobotomy Emphasis Total Fundinga
(1984-1988)
Jiangmen Single Cell Food processing 60
Protein Biotechnology
Base
Shanghai Center Downs~n processing 57
of Biotechnology (no designated product)
K' y laba~atones (ll) Reseal and fig 55
nit lions of yuan O.71 yuan = IJS$13.
iValues m p~uheses are giant durations (in years).
Secludes only ecus for bio~nology and closely rated fields. For fatal biology expendi~s,
see Table 3.
TABLE 2 Distribution of Research Funds by Type of Research Institution (in
percent)
P - ~
Agna~ral and
Un~versmes MedicalCdlegeg Academies Other
High Tedhnology 22 20 38 20
program
Seventh 60a 40
S-Year Han
NSFC 63@ 37
7
. .
Values are for uraversines and agriculmral insii~tes and medical colleges combined.
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8
BIOT&~OLOGY IN ClIINA
80 percent of allocate grant funds in the United States. ~ shore a much higher
percentage of Chinese grant funds are spent on research. The amount of funds
Cat can be converted to hard currency is variable from grant ~ grant, and it is
dependent on complex arrangements win the granting agency and institute
adm~s~tors.
HIGH TECHNOLOGY PROGRAM AND THE CHINA NATIONAL
CENTER FOR BIOTECHNOLOGY DEVELOPMENT
Funds for the ~gh Technology Program me allocated directly by SSTC. They
are administered through CNCBO, a purely a~ninis~adve body that was founded
in 1983 at the sllggesdon of a group of eight visidng C}~inese-American scientists
headW by Ray Wu and Shain~ow Kung. In 1986, We're 6 3 Plan" mandated
CNCBD ~ spend approximately 30 million yuan. per year on highly applied
projects in the areas of agriculture, medicine, and protein en~eenng. Grant
proposals are peer reviewed by a separate subcommittee in each area and approved
by an 11-member panel whose members are select directly by SSTC. Grants
are awarded for 3 to 5 years and He reviewed annually. Because of He highly
focused nature of this program, the individual grants are by far He largest in
China, typically in He range of 500,000 to 2 million yuan for 4 years. In 1987,
100 grants were awarded out of a pool of 500 applications. The distribution of
grants according to subject area was 40 percent for agriculture, 40 percent for
medicine, and 20 percent for protein engineenng. These grants were approximately
equally distributed between CAS, universities, and medical and agricultural
sensates.
The center is headed by Chief Engineer Liu Yonghui, who is assisted by
Deputy Chief Engineer Xu Chengman. Scientific leadership is provided by Hou
Yunde' chief scientist of the China National Expert Committee for Biotechnology
Development and director of He Beijing Institute of Virology.
The original concept was for CNCBD to coordinate all of China's biotechnology
activities and to establish research centers in Beijing, Shanghai, and Jiangmen
(Guangdong Province). As it now stands, however, CNCBD is primarily
responsible only for the High Technology Program. The idea of a research center
in Beijing has been abandoned, the Shanghai center is still under construction, and
the Hangmen Me has been left to its own devices (see Chapter 4~.
Additional responsibilities include consultation and promotion activities,
management of experimental animals and equipment, and supply procurement.
The CNCBD is staffed by 45 people and has an annual operating budget of
300,000 yuan. Part of these funds are supplied by import~xport companies that
*The a£ficis1 rate of exchange is 3.71 yuan to US$1.
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RESEARCH PRIORITIES AND FUNDING MECHANISMS
9
CNCBD operates in Beijing, Hong Kong, and New York. Their primary export is
e~enmen~l monkeys.
Although He High Technology Program grants He peer reviewed, they are, in
fact, more like contacts Han Wes~n-s~le investigamr-inidated grants. This
difference stems hum He fact that essentially all of He grants support projects
Hat are preselected though a complex negotiation process involving He SSTC,
CNCBD administrate, and members of He China National Expert Committee
for Biotechnology Development While most Chinese scientists feel that He High
Technology Program grants are fairly reviewed, Here are Hose who signal their
reservations by quoting a Chinese proverb, "Pavilions new the water receive the
most moonlight"
SEVENTH 5iYEAR PLAN (1986-1990)
In He Seventh 5-Year Plan, tom1 investment in biotechnology and closely
related fields is approximately 100 million yuan, or-20 million yuan per year.
These monies are provided through CAS, SEDC, and the Ministries of Agriculture,
Public Heals, Medicine, and Light Industry. The Seventh 5-Year Plan solicits
and funds research in the areas of basic genetic engineering, plant genetic
engineering, chromosome engineering, cell engineering, enzyme engineering,
downstream processing, end bioengineenng products. In 1987, 108 projects were
approved and supported from a pool of 150 applications. The average grant was
200,000 yuan, although certain key projects were funded up to 2 million yuan.
Thus, the Seventh 5-Year Plan grants generally have been smaller than High
Technology Program grants but substantially greater than NSFC grants (see
below).
The Seventh 5-Year Plan grants are administered by CAS. Scientific direction
is provided by Mung Keqiang, director of the CAS Expert Committee for
Biotechnology and a professor at the Beijing Institute of Microbiology. Grants are
reviewed by a single committee of 24 scientists and administrators. The high
percentage of accepted applications would indicate a review process that is less
rigorous than He one applied at CNCBD or NSFC, ~ He extent that it reflects
primary concern about an application's conformist to goals set by the expert
committee.
NATIONAL NATURAL SCIENCE FOUNDATION OF CHINA
The NSFC was founded in 1986 expressly to support basic research In China.
It is somewhat similar to He U.S. National Science Foundation (NSF) in Hat it
funds, in addition to biology, research in a wide varier of disciplines such as
mad, physics, and geology. In 1987, He Department of Biological Sciences
received 3,507 applications, of which 979 were funded following the peer review
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10
BIOTECHNOLOGY IN CHINA
process described below. The grants were distributed among fob types of
awards, as shown in Table 3, and are summarized here.
General Awards
~ 1987, Me standard general award was 30,000 yuan for 3 years, with little
variation between individual grants. Universities and colleges received 63 percent
of these grants. Nombly, 67 percent of the awards were to investigators between
36 and 55 years of age.
Key Projects
ibis program, =dated in 1987, supports the ongoing projects of reputable
investigators that are judged to have a high probability of success and benefit ~
We Fist year, average funding was 40,000 yuan annually, or four times higher
Han Hat for He general awards, and 61 pent of He investigators were from
academic institutions.
Frontiers of High Technology
This program, also initiated in 1987, is designed to support high technology
fields such as biotechnology, information sciences, and aerospace sciences.
Although these areas represent more applied science, this program consii~tes
only ~ percent of the NSFC grant budget. The average grant is only slightly
higher Han that for general awards.
Young Scientist Awards
This program is designed to support young scientists (under 35 years of age)
who He starting their first independent projects. It is hoped Hat He program will
entice scientists who have received Heir Ph.D.'s abroad to return to China To
this end, an applicant is allowed to apply for this award while he or she is living in
another counny. In 1987, 29 percent of the recipients had received mining
outside of China
Ale concept for NSFC grew out of He CAS Science Foundation, which was
crmted in 1982 in order to award CAS research grants selectively. The NSFC
adopted a peer Renew system directly modeled on Hat of NSF in the United
States. As Chows first Her review granting system, it represented an important
step in modeling and improving funding mechanisms Hat has come to be
widely regarded by Chinese scientists as a fair and unbiased method for allocating
He scare funds available for basic research.
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RESEARCH PRIORIT ES AND WADING M=H^ISMS
TABLE 3 Biology Grants of He National Natural Science Foundation of China
11
Type ~ Award Funds Median Percentage of Total
(1987)~ Grants Biology Funding NSFC Awards
General awards 24.5 0.03 (3)C 83 3Q6
Key projects 2.0 0.(14 (1) 7 3.4
Frontiers at 0th 2.14 0.045 (3) 7 21.9
Penology
Young scientists Q75 0.035 (3) 3 21.9
Ed millions 0! yuan.
The lemainirig percemage of awards were given for non~iology-reJated I.
CValues in pa~en~eses are grant durations Dm years).
After4 years of provisionaloperadon,NSFC was institutionalized as anadonal
organization administered directly by He Sme CounciL The governing body of
NSFC is an executive council consisting of 25 members appointed by He State
Council. Adminisuadve leadership is provided by C~innan Tang Aoqing,
Executive Vice Chairman Hu Zhaosen, and four vice chainnen. Ibe total 1988
budget for NSFC was 120 million yuan, representing a 20 percent increase Tom
19~7 and a 300 percent incremental increase compared with average funding
levels from 1982 to 1985.
The NSFC publishes an annual list of research goals Hat are prioritized on a
sliding scale. However, most of the goals, especially in biology, are broadly
stated, providing ample room for initiative by individual investigators. Grant
applications are evaluated using a year-Ion", five-step process:
1. Approval by Be sponsoring institution.
2. Preliminary evaluation by the appropriate department of NSFC. Reasons
for immediate rejection include concurrent funding by another agency, lack of
appropriate laboratory facilities, unqualified principal invests, lack of progress
Tom He previous grant period, or inappropriate subject matter.
3. Solicited peer reviews by Tree to seven experts in He specialty area of the
application. The reviews may include recommendations for modification of the
proposal (More than 10,000 scientists helped to review grants last year.)
4. Review by a panel of approximately 10 members for each program area.
(In 1987, there were 41 panels comprising 488 scientists selected by NSEC from
universities [51 percents, CAS [22 percent], and over research institutions [27
percents. The panel members evaluate the peer reviews and suggest a funding
pnonn,r.
5. Approval by Be executive council.
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12
BIOTECHNOLOGY IN CHINA
The NSFC also administers the National Science Awards, which were
established in 1956 to recognize outstanding achievements by Chinese scientists.
Although they were given only twice between 1965 and 1987, the awards are now
being presented biannually. In l9SX, Were were 777 nominees, of whom 180
were selected for awards: 11 fast prizes of 20,000 yuan, 39 second prizes of
lO,OOOyuan, X9 third prizes of 5,000 yuan, and 41 for prizes of 2,000 yuan, for
a total expenditure of 1.13 million yuan.
EVOLU ICON AND CONSEQUENCES OF THE
NEW FUNDING MECHANISMS
The Me programs just summarized represent a radical alteration in both the
levels and mesons of funding biological research in China Just 5 years ago, total
e~endi~res on biotechnology and red fields were less Han 5 million ynan per
year and were spent almost exclusively by CAS through a noncompetitive allocation
system. Now expenditures are greater than 100 million yuan per year and are
more evenly distributed among various types of research institutions through
competitive grants. In the evolution of the new funding policies, Free trends have
become clear the declining role of CAS, decentralization of the Wanting process,
and strongly increase emphasis on applied research.
The declining role of CAS, the few major ~end, is signalled by its decreasing
direct Finding. In the past, CAS was primarily responsible for all of China's basic
biological March and much of the applied research as well. However, concomitant
win He greatly increased funding for the Free new grant programs, the State
Council and State Planning Commission decided to decrease direct funding for
CAS according to the following formula: for basic research, a 6 percent decrease
per year over 5 years ~ a fee level of 70 percent; and for applied research, a 20
percent decrease per year over 5 years to a final level of zero. The only area Hat
will be inched is research on China's natural resources. At present, CAS's total
expenditures on biological research are 7 million yuan per year, of which 1
million yuan is eannarked for biotechnology. When seen in comparison with die
figures present in Table 1A, this represents only 1.7 percent of total biotechnology
research expenditures. After He planned 5-year cuts and inaction have taken
Heir toll, CAS direct expenditures will account for an even smaller proportion of
total biology and biotechnology funding.
In addition to these decreases in research funds, CAS is also under strong
pressure to reduce He size of its a~ninisuative staff and to Deeze He number of
research waders. In order to achieve the lamer aim, students and staff members
studying abroad are counted as still occupying a CAS position, even in cases
where researchers have already long overstayed Heir originally planned visits.
Not surprisingly, CAS administrators have bitterly opposed He new funding
policies. In some cases, such as He idea of establishing a biotechnology center
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RESEARCH PRIORITIES AND FUNDING MECHANISMS
13
under CNCBD, their arguments have been successful. In over cases, such as the
formation of key laboratories at universities, their protests have been ignored.
While many of the CAS arguments can simply be attributed to fear of competition,
others are well founded In particular, basic research is being short-changed both
in this reorganization and by underfunding NSFC's mandate to support this type
of research. As pointed out by Wang YingLdi, director emeritus of He Shanghai
Institute of Biochemistry, it would have been difficult or impossible under current
policies ~ have carried out one of China's greatest scientific achievements: the
total synthesis of insulin
A second major trend has been the effect of the new granting process on We
decentralization of research units. Previously, each research organization was
funded exclusively by allocations from its ~nwei which, in turn' were set by the
State Planning Commission. In the past, academic institutions received virtually
no funds from their damvei (SEDC) for research. Now each organization, be Hey
research institutes or university-based science departments, is expected to compete
openly for funds from He three major granting organizations and other sources
such as provincial governments and companies. As indicated in Table 2, the big
winners in this game have been the universities and colleges, which now receive
roughly half of all funding. The new policies have resend in a hitherto
unprecedented degree of autonomy bow for research instate administrators and
for individual researchers. The one constant is that Be amount of funds allocated
to each major program is still determined by the State Planning Commission
through its Department of Science and Technology Planning, which is headed by
Cal Dalie.
The third major trend concerns the effects of the stated aim of bode the High
Technology Program and the Seventh 5-Year Plan to promote highly applied
research that will become self-supporting within a show period of time. As
elaborated in Chapters 6 and 8, this, for the most park has involved the direct
copying of Western research results with little attention to innovation, long-term
development, or technology mat is slitted to China's unique circumstances. The
only formal support mechanisms for basic research are grants from CAS, which
as noted above are Aridly diminishing, and from NSFC. While NSFC controls a
substantial amount of money, it is Spread out among a large number of grants so
that He usual grant of 30,000 yuan for 3 years is insufficient to equip or run a
laboratory. The practical result is Hat only those investigators who already hold a
High Technology Pronoun or Seventh 5-Year Plan grant can effectively use Heir
NSFC money to carry out basic research In Act, many of China's top researchers
do just that by diverting funds from goal-oriented grants to more basic research.
~ many odler instances, however, poor applied research by unqualified
investigators is being supported at the expense of good basic research by more
qualified investigators simply because it is considered to be practical in terms of
addressing He pressure to generate revenue-producing results. Clearly, this trend
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applied Debauch ~ motived byI~Jidod poUcycons _ dons ~ bather
. In condense ~ sciends~ vied duhag the o~Juadon Dip wage
MOSS elm_ ~ snag of hosed fdading A~ base Debauch. G1vcn go
T~:VUx~ paucity of~ny _ b suppon~ilisnot _ ing day sciends~
have ~~ Wide ads d6~gn~nenl and have scqqdesced m ~en~I~J1ciesbecause
am.
Representative terms from entire chapter:
funding mechanisms
