14. Basic research and applied basic research. Basic research and applied basic research are the precursors to new techniques and new inventions， are the powerful backing to scientific， technological and economic development， and are the cradles to foster scientific and technological talents， therefore deserving sufficient attention. While general arrangements should be made for development of frontier sciences， multi-disciplinary and comprehensive researches should be devoted and focused on strategic key areas of national economy such as agriculture， energy， traffic and transportation， information， materials， etc. and on important problems in population， medicine and hygiene， resources， ecology， environment， natural calamity and national security.

Focal points of basic and applied basic researches are：

—— To strengthen research on basic frontier sciences such as coacervation physics， molecular biology， chemistry， oceanology， ecology and information. Particularly breakthrough should be attempted in research on physical mechanism of high critical point super-conduction. Research should be strengthened on intersection among physics and life science， materials science， energy science， etc…… Research should be strengthened in both theory and method of non-linear mathematics， numerical analysis and large-scale scientific and technological calculation.

—— Research on molecular biology and cell biology should be targeted at discovery of basic laws governing heredity， differentiation and growth at the level of molecular and cell. Such laws can serve as theoretic basis upon which modern biological technologies can be developed. Chemical research on life process should be strengthened. Chemistry of polymer， catalysis， surface and rare-earth should be developed with a view to surveying new materials. Attention should be paid to research and tracking of the research on molecular design and micro-reaction mechanics.

—— Geoscience research should take an integrative view of the sophisticated coupling system comprising solid earth， gaseous sphere， water sphere and biosphere， and should provide basic materials and theories for solving important problems such as resources， energy， environment and natural calamity， etc…… Ecological research should be focused on coordinated evolution of systems， mechanism of degenerated ecological systems and construction of optimized artificial systems so as to contribute to environmental improvement and promotion of social development.

—— Research of information science should highly value the development of intelligence-orientation and should strive for breakthrough in solving technical key problems in communication， computer and automatic control， etc……

—— The development of space science should depend on strengthened research in basic space science and close combination with high technology. Major efforts should be devoted to research in physical， chemical and Living phenomena under micro gravity and overall be haviour of the solar-earth system.

15. National defence science and technology. Development of science and technology on national defence is an important factor in maintaining national security and reinforcing comprehensive state strength. Science and technology on national defence should be developed in the light of the practical circumstances at the socialist preliminary stage， incompatibility with strategic arrangements for economic construction and military strategies in the new time， and should centre on general efficiency. The development of science and technology on national defence should be propelled by both practical demands and technical initiatives， and should track selected frontiers and attempt breakthrough in key areas.

—— Advanced national defence science and technology should be applied to facilitate progress of weaponry and equipment and to accelerate realization of military strategies and objectives in the new time. This is the key task for the development of national defence science and technology. Where state finance permits， development priority should go to the weaponry and equipment system that will play an important role in raising the fighting capacity of our army and will play a leading role in promotion of the national defence scientific and technical level in particular and even the scientific and technical level of our country in general. Therefore， research should be strengthened to develop key technologies that are significant to the establishment of the weaponry and equipment system.

—— We should observe the principle of military-civilian combination， highly value theoretic survey， strengthen advanced applied researches and lay a solid foundation for sustained and stable development of national defence science and technology.

IV. Deepening Reform and Establishing a New System for the Benefit of Economic Development and Scientific and Technological Progress

16. The scientific and technological system in our country must be beneficial to the economic development. In turn the economic system in our country must be in favour of scientific and technological progress. To further realize integration of science， technology and the economy， we must start from the success and experiences already achieved and keep on to deepen reform according to the principle of coordination and mutual-supplementation.

The general goal of the reform of our scientific and technological system is： to establish and perfect a new system， which is consistent with the law of scientific and technological development， compatible with the socialist planned commodity economy， and beneficial to the organic combination and mutual-promotion of science， technology and economy； to make scientific and technological work actively serve the socialist planned commodity economy； to lead economic construction onto the path of relying on scientific and technological progress and improvement of labour quality and； to give full play to the role of science and technology as the first productive force. Concrete objectives of the reform of scientific and technological system are：

—— to transform government functions， to establish a macro management system that organically integrates direct planned management with indirect management； and to make the system standardized and legalized；

—— to reform the scientific and technological personnel management system for creation of a favour able environment in which talents are coming forth in large numbers and are used to the full， and to establish a socialized service system intended for the scientific and technological personnel and activities；

—— to establish both industrial and countryside research， development and spread systems in which research and development institutions are organically combined and reasonably coordinated with enterprises and countryside；

—— to foster and establish socialist market sub-systems of materials， techniques， labour and information， etc. for creation of an environment in favour of proper competition in scientific and technological development；

—— to form a multi-channel scientific and technological investment system comprising governments， localities， enterprises and banking institutions， etc.；

—— to form a scientific and technological organizational structure which is adaptable to the development of a socialist planned commodity economy.

Reform of the scientific and technological system should be complying with objective requirements of economic development and scientific and technological progress and should be conducted step by step with a fundamental structure of the new system formed by 2000 and gradually perfected in late years.

17. The core of the scientific and technological system reform is to establish a new operation mechanism by which planned management can be organically integrated with market readjustment and the advantages of the integration can be given full play. A fair competition mechanism should be introduced， which can bring forth a desirable flow of labour， technology and information. The market mechanism of guidance by demands should also be introduced so that the scientific and technological progress can become the internal requirement of social economic activity. Still other relevant operational mechanisms should be established in the light of difference in level and characteristics of scientific and technological development.

Basic research， applied basic research， scientific and technological work in the nature of public welfare should be targeted at scientific survey and achievement of macro economic and social efficiency. The state should offer sustained and stable financial support to such researches and work. Over a relatively long period of time to come， large-scale comprehensive research and key projects should be principally supported by the state and managed in a planned mode while at the same time necessary competition should also be introduced for the purpose of desirable investment efficiency. Technical development and application spread which may generate immediate economic efficiency should， under the guidance of the state industrial policies， give more play to the role of market readjustment.

18. The state macro scientific and technological management and control system should be perfected. Government functions in that regard should be effectively transformed， giving priority to formulation and implementation of principles， policies， programmes， plans and regulations on scientific and technological development. Legal， policy-making， administrative and economic means should be used comprehensively to promote scientific and technological progress.

The state should reinforce control measures， raise macro-control ability， strengthen and improve planned management through state decrees. At the same time， the scope under instruction and planning should be gradually broadened. Multiple investment channels such as credit， risk-involved investment should be developed to support scientific and technological development. Technical innovations should be encouraged. The scientific and technological rewarding system should be strengthened and improved. The state should protect intellectual property， give play to patents， promote commercialization and industrialization of technical achievements and create an environment in favour of scientific and technological progress. The state should strengthen work in standardization， measure and quality supervision， formulate technical standards and perfect the state quality supervision and safeguarding system.

19. With the deepening of economic systematic reform， trades and enterprises should be the main body to conduct technical development. Capacity of enterprises in technical consumption and self-development should be strengthened. Within enterprises， a technical development and management system should be established. Lateral unification between enterprises， between enterprises and other research and development institutions and colleges should be promoted in different forms. It should also be encouraged to form corporate groups with large and medium-sized enterprises as backbones and with commodities of high quality and well-know brands as major products. Such groups should integrate research with production and have the comprehensive functions of technical development， production， marketing and services. Particular support should be given to corporate groups that are science-and-technology oriented or have strong international competitiveness.

It is of great significance to economic development for different trades to strengthen scientific and technical work. With a view to saving on resources， concentrating forces and providing better technical support to enterprises， professional technical research and development centres attached to respective trades should be established and perfected on a selective basis. Such centres should be able to undertake research and development tasks over basic common techniques， frontier techniques and sets of techniques for relevant trades. Professional technical research and development centres should be supported jointly by the state， trades and enterprises. They should adopt independent management and fulfil tasks commissioned by the state， relevant trades or enterprises.

20. Reform of the scientific and technological system in countryside should be strengthened. Development of agriculture in our country must depend on science and technology. The state should continue to strengthen support to agricultural research and technological spread. During the course of the scientific and technological system reform， steady increase of funds for agricultural science and technology and sustained enlargement of scientific and technological contingents for agriculture should be secured. Research institutions at different levels， colleges， training schools and skilled personnel should be instructed and encouraged to cooperate with local governments in joint research and development of regional economic technologies. The state and localities should support and lead the development of agricultural scientific and technological institutions at the county level and below into business entities with independent accounting and comprehensive business including technical development， expansion and technical services. Practices of paid service should be introduced. In this way work of agricultural technologies spread can be vitalized.

To meet requirements of agricultural commodity economic developments， business entities of different ownership with combined business scope inclusive of technology， farming， industrial and commercial transactions should be developed under proper leadership. Advanced and applicable industrial technologies should be used to equip new countryside enterprises， and different farmers' professional technical associations should be involved in providing services to the whole process of commodity production of farming households. While the household responsibility contract system is maintained， a double-layer business mechanism based on uniform management and independent operation could be developed so that certain production scale could be reached and the products could enter both domestic and international markets.

Various flexible and effective forms should be adopted to conduct regular technical education and training of farmers so that they can master modern technologies and knowledge.

Research institutions， colleges and training schools， and scientific and technological personnel should be led and encouraged to obtain contracts in countryside， establish township enterprises and other trades with a view to promoting escalation of countryside industrial structure and technical level.

21. A scientific and technological organizational structure should be established that is adapted to the development of the socialist planned commodity economy. Research and development institutions in our country should be of multi-layer， multi-function and different ownership. Some of those institutions should be intended for the whole nation while some should be oriented to specific trades and some to certain regions. Those institutions should also be differentiated in terms of their commitments with some engaged in basic and applied research and others engaged in technical development. Such institutions should be under the state， collective and individual ownership. The China Academy of Sciences and research and development agencies attached to different departments， colleges and large-scale key enterprises are the mainstay of our scientific and technological undertakings and should enjoy focal support of governments at different levels. Under the precondition that public ownership dominates， the state should continue to guide mass-run research institutions to healthy development as an important supplement to socialist scientific and technological undertakings.

According to requirements of economic and social development in our country and in the light of operational mechanisms of scientific and technological development at different layers， the scientific and technological organizational structure should be readjusted. The state should devote major supports to part research institutions who undertake tasks in basic research， applied basic research， research work for public welfare， important comprehensive and long-term researches and research on techniques for common application of whole trades. Most other state-owned research units， particularly those medium and small-size research units that are engaged in technical development， should， in the light of individual circumstances and under the guidance of relevant state policies， undergo restructuring and reorganization according to the mechanism of market readjustment. Some of them may be developed into scientifically and technologically oriented enterprises to provide hi-tech products and services for both domestic and overseas markets. Some of them may be merged with other enterprises to form corporate groups. Some of them may join enterprises to be technical departments and technical trial bases of enterprises. Some may be developed into professional technical development and service centers targeted for medium- and small-size enterprises and the countryside.

22. A socialized management system of scientific and technological staff should be established gradually. Development of the planned commodity economy requires certain mobility of scientific and technological staff. Management of scientific and technological personnel should be loosened and vitalized. While necessary planned management over scientific and technological personnel should be maintained to satisfy state demands， necessary movement of talents should be permitted to form desirable combination with other productive components according to market demands. Socialization of commodity production and talents development laws require socialization of scientific and technological personnel management. Therefore a correspondent socialized management system of scientific and technological personnel should be gradually established and perfected. Such a system should be the target of there form in scientific and technological personnel management. To realize this target supplementary reforms should be initiated in an active and reliable manner.

The administrative mode by which management of scientific and technological personnel is monopolized by the state should be changed gradually. The market of scientific and technological labour should be loosened in a planned manner. Laws should be formulated to guarantee the possibility of scientific and technological personnel in choice of jobs and to introduce an employment contract system in which both scientific and technological personnel and employing units enjoy freedom. Consequently talents， particularly senior scientific and technological talents， can enjoy mobility in a rational way， and the professional employment system based on technical posts can be established and perfected step by step. A new distribution mechanism should be formed according to the principle of distribution according to work so that scientific and technological personnel can be motivated to devote themselves wholeheartedly to work. A social security system should be established， through which present insurance undertakings run by the state could be transferred to the society. Unemployment insurance， endowment insurance， medical insurance and malpractice insurance for scientific and technological personnel could then be undertaken by the society. Household register and housing systems should be reformed to adapt to demands for personnel mobility. This is a hard and complicated task necessitating efforts over a long time.

V. Adhering to Opening up， Vigorously Promoting International Cooperation and Exchange in Science and Technology

23. Science and technology has become common knowledge and property of all the human beings day by day. Among international relationships， scientific and technological exchange is always the forerunner of international exchange and one of the most stable field of cooperation. Therefore to actively promote international scientific and technological cooperation and exchange should be an important long-standing guideline for the development of scientific and technological undertakings in our country.

To develop international scientific and technological cooperation and exchange must follow principles of independence， self-reliance， equality， mutual-benefit， and the policy of opening up to the outside world. Laws and conventions on international scientific and technological cooperation should be observed. Intellectual property should be protected. While we should join in advancing scientific and technological progress of the world， we should accelerate upgrading scientific and technological level of our country， strengthen the self-relying capacity of our scientific and technological work and gradually establish a scientific research and technical development and innovation system which has international competitiveness.

24. Comprehensive international scientific and technological cooperation and exchange should be developed where necessary to our country and possible in practice. While scientific and technological cooperation between governments should be conducted well， non-governmental cooperation in science and technology should be expanded in scope and scale. Exchange with foreign partners by enterprises， research institutions， colleges and non-governmental scientific and technological organizations should be expanded step by step. For the benefit of international scientific and technological cooperation， we must not only do a good job in mutual cooperation but also develop multi-lateral cooperation taking full advantage of international organizations. When we are conducting scientific and technological exchange with advanced countries we must strengthen such exchange and cooperation with developing countries. Economic and trade cooperation with other countries should be promoted with scientific and technological exchange and technique trade as the forerunner.

25. It is a long-term strategy for accelerated modernization of our country to effectively introduce， digest， assimilate and innovate in technologies.

Selection of technologies to be introduced should follow the principle of satisfaction of our country's needs and improvement of self-development ability. Feasibility study should be done well in advance to introduction. The state should formulate legislation regarding technological introduction， priority of the introduction and standards to be applied. The state should strengthen macro-control and management so as to prevent from arbitrary and repeated introduction. The state should also stress efforts on protection of intellectual property.

Technological introduction should be integrated with major domestic campaign in scientific and technological research and trade in technology. Special attention should be paid to introduction of soft wares and key technologies， to coordination of such factors as technology， funds， equipment， management， talents and the market.

The state should， through legislation， ensure funding sources for digesting， assimilation and innovation of introduced technologies； and should ensure for involvement of research institutions in the whole process of such digest， assimilation and innovation. Proportion of domestic components should be substantially increased with introduced technologies and equipment.

26. External scientific and technological cooperation and exchange should be closely integrated with our country's programmes for economic， social， scientific and technological development. Such forms as cooperative research， joint development and cooperative operation should be actively adopted to develop international scientific and technological cooperation. Some scientific and technological fields， which are most necessary to our country or have certain advantages， should be selected to be involved in international large programmes and projects of science and technology. Conditions should be created for joint adventure in research， development， design， production and information service with foreign institutions or international organizations in our own country or abroad so that cooperation in technological economy could be promoted.

27. External scientific and technological cooperation and exchange should contribute to development of externally oriented economy and should provide technical support and services to export of high additional-value products and hi-tech products with their proportion to the total export value increased. Technological export should be organized actively subject to the precondition that optimum economic efficiency is obtained. Those hi-tech research and development institutions and enterprises that have promising prospect of export should be rendered more support in terms of policies， funds and external affairs authority so as to acquire more business flexibility. A group of scientific and technological management talents should be trained and brought up in a planned manner， who are expert in technology， familiar with international environment and efficient in foreign languages. Vigorous efforts should be devoted to introduce people educated abroad to externally oriented hi-tech industries.

28. Relevant policies should be formulated and perfected to stimulate external contacts， academic exchange and intellectual export of scientific and technological personnel. Convenience should be created for scientific and technological personnel to attend international conferences， conduct academic visits and guest research， take concurrent jobs abroad and to accept posts with international organizations. For scientific and technological personnel to go abroad for academic activities， the authority over examination and approval of such matter should be transferred to lower level and correspondent formalities should be simplified. Conditions should be actively created to attract excellent scientific and technological people working abroad to come home for posts and to employ foreign experts to work in science， technology or education， give instructions or advice to production and business or take up management posts.

Where necessary and possible， intellectual export should be organized in a planned manner and should contribute to earning more foreign exchange. More experts， managers should be dispatched abroad to work with， contract or manage technical projects， provide technical service and to establish research and engineering technology service entities abroad.

29. Favourable conditions and environment should be created for international scientific and technological cooperation and exchange. Collection and exchange of scientific and technological information both within and abroad should be strengthened. Research on concerned scientific and technological status quo and policies should be developed country by country or in a comparative approach. Strategies， principles and policies on scientific and technological cooperation and exchange should be formulated in the light of characteristics and advantages of different countries in different fields. Funding sources should be developed for external cooperation and exchange. Both domestic and overseas channels should be approached for collection of funds in support of international cooperation and exchange in science and technology.

VI. Policy and Measure

30. With a view to guaranteeing first priority given to scientific and technological progress in terms of state development strategy， highest state authority should substantially strengthen leadership over scientific and technological work， make unified planning and provide overall guidance upon problems important to coordinated development of science， technology， society and economy of the whole country. Functions of state departments in charge of scientific and technological work should be strengthened； their macro-decision-making competence should be raised in real earnest. Various divisional and decentralized tendencies should be overcome. The limited resources should be used where they are most necessary so that key state projects on science and technology can be realized.

31. Investment in science and technology should be strengthened and financial management of science and technology should be improved. While state financial allocation should be increased steadily， social investment in science and technology should be enlarged step by step. The situation of state financial allocation as the sole funding source should be changed and expanded to include three funding pillars of financial allocation， money raising by enterprises themselves and loans from banking institutions. At the same time funds from among the people and overseas sources should also be invited. A multi-source and multi-layer investment system in science and technology should be established so as to substantially enlarge total social investment in development of science and technology.

The government should properly increase investment in science and technology and introduce preferential policies in favour of hi-tech development. Enterprises should highly value development of new products， enlarge input into research development， increase funds for development of agricultural research and encourage township enterprises to invest in agricultural science and technology.

The banking system should establish specific credit items for scientific and technological development and increase loans on science and technology. Budget for scientific and technological credit should be increased remarkably by the year 2000.

Scientific and technological investment structure should be readjusted. Funds for basic research and applied basic research should account for 10% of the total research and development funds at the end of the century. Financial support should be strengthened to development of intermediate trials and productive technologies， commercialization and industrialization of technological achievements. Some high technologies and hi-tech industries should be selected for substantially reinforced investment and gradual application of risk-attached investment.

The scientific and technological funds management system should be reformed continuously. The state investment in science and technology should be managed in a unified manner and should introduce a competitive mechanism. Different methods including item-specific allocation， foundation systems， all-round responsibility contract systems， bidding systems and contract systems should be adopted in consideration of different scientific and technological projects. State planned projects with desirable economic efficiency should be invested jointly by the state and the beneficiary in proportion. A system of examination and evaluation over research and development projects and an independent technological assessment institution should be established so as to exert supervision and check over distribution and utilization of the funds. The scientific and technological accounting management system should be perfected and auditing work should be strengthened.

32. Mechanisms of tax， price， credit and depreciation should be used to lead to scientific and technological progress of trades and enterprises and to promote development of scientific and technological undertakings.

Business tax upon income from technical consultancy， transfer， service and development should be exempted. But additional tax should be levied upon products and technologies that run counter to state industrial policies or scientific and technological policies or impede scientific and technological progress.

Investments in research and development institutions or enterprises for research and development， test analysis and softwares， and commercialized production of new products nominated by the state should be offered preferential loans with discounted or low interest.

Infrastructure of research and development institutions and productive equipment for hi-tech products should be treated with a larger depreciation rate than normal.

33. Legal construction on science and technology should be facilitated. Principles and policies in favour of scientific and technological progress should be fixed through legislation so that scientific and technological work could be led to a legal approach and brought under the protection and supervision of law. Relevant legislation including the Law on Scientific and Technological Progress should be formulated speedily. Legislation on scientific and technological organizations， labour， reward and intellectual property protection should be perfected. Attempts should be made for establishing a relatively complete law frame by the year 2000.

Awareness of laws on science and technology should be popularized. Implementation， and supervision of implementation， of scientific and technological legislation should be strengthened. Mediation agencies for settlement of technical contract disputes and other institutions at different levels for administration of scientific and technological justice should be established. Institutions for research， consultancy and service in scientific and technological legislation should also be established.

34. Scientific， democratic and regularized decision-making should be promoted. Science and technology as a comprehensive knowledge system and thinking method can help us analyse at a macro-level complicated and changeable economic and social phenomena and make differentiations， judgements and rational decisions.

Decision-making research and consultancy should be highly valued and strengthened. A democratic and scientific decision-making procedure and implementation procedure should be established and perfected. Decision over a problem important to national economy and people's livelihood should be based on soft-scientific study conducted in advance. Such practice should be regularized. Leaders at different levels should value the work of soft-scientific research and actively utilize its achievements to make correct decisions.

35. Talents resources should be tapped. The role of scientific and technological personnel should be given free rein. Leaders at different levels should be adept in finding talents， should unite talents and utilize talents more freely. Scientific and technological personnel whoever has made achievements in work should enjoy respect that he deserves. Different methods should be tried to accelerate training of a new generation of scientific and technological talents. Young people with both sciential and morale merits should be promoted and used more boldly. Continuous education of scientific and technological personnel should be attached much attention. Dispatch of scientific and technological personnel abroad for further education should be organized in an active and planned manner. The role of middle-aged and young personnel as the backbone should be given full play. Retired personnel should be given opportunity to continue service.

Professional education of labour should be strengthened. People should be encouraged to become talents through self-learning. Those talents that come from workers and farmers should be given equal treatment as correspondent professional talents.

Ideological and political work of scientific and technological personnel should be strengthened. They should be educated in patriotism and inspired to withhold the “Four Basic Principles”， observe conduct codes of scientific and technological work. They should be encouraged to make strenuous efforts and great contribution to the modernization of our country.

Working conditions and living welfare of scientific and technological personnel should be improved strenuously. Integrated with the reform in the personnel system and distribution system， necessary efforts should be adopted to substantially increase income of scientific and technological personnel. Those personnel working in country， remote and border regions， or working under the ground， in the open country or in dangerous environment should be given preferential treatment.

36. A stable and democratic and free environment should be created for scientific and technological development. Difference in academic viewpoints should be solved through scientific practice and discussions of the academic community and should not be judged by administrative measures.

The role of academic associations like the China Scientific and Technological Association should be given full play. Different academic associations， scientific and technological personnel should be encouraged to participate in academic exchanges， decision-making analysis and consultancy services.

A socialized scientific and technical supporting system should be established and perfected including scientific and technical equipment， information， books， materials and publications.

37. The whole society should strengthen support to scientific and technological work. Party leaders and officials indifferent departments and localities should improve understanding of scientific and technical work and give close attention and great support to the work. Authorities should strive to improve their scientific and technical quality， understand it as prime importance to depend on science and technology for rejuvenation of China， vitalization of locality and department， and play a leading role in advocating scientific and technological development.

All departments of planning， personnel， education， finance， banking， taxation， foreign trade， propaganda， news， publication， culture and entertainment should strengthen support to scientific and technical work jointly contributing to scientific and technological development.

38. The development of science and technology is a cause of the Chinese nation for all generations to come and necessitates rousing up of the whole nation and sustained efforts of coming generations. In history， the Chinese nation， by their own intelligence and wisdom， created brilliant ancient civilization， which is still shinning with immortal splendor. Today， under the leadership of the Chinese Communist Party and the guidance of the party's basic line， depending on scientific and technical progress， we will surely realize new leaps in social productivity and realize the great strategic objectives of socialist modernization at the second and third stages