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400-millimetre long mono-crystal siliconline, 300 millimetres in diameter. The UnitedStates, Japan and Germany are the only othercountries to have mastered this technique. Incollaboration with other institutes, GRINMalso produced China’s first high-tempera-ture superconductor cable made of materialsfrom the bismuth series.

The government now faces the task ofensuring that institutes such as BGRIMMand GRINM remain creative and produc-tive. “The government hopes that industrialenterprises will play a major role in China’sR&D efforts, but such enterprises are farfrom that goal,” says a BGRIMM researcher .

Although a few research institutes will beallowed to keep their government-supportedstatus, they will have to operate like privatecompanies. Administratively, they will beresponsible to local government.

The research institutes involved in thisreform will enjoy special privileges. They willcontinue to receive some operating fundsfrom the government, although this isintended primarily to support those whohave already retired. For the first five yearsthey will be exempt from enterprise incometax, operating tax based on revenues fromtransferring technology, and property taxeson urban land used for R&D purposes.

The new bodies will have the same rightsas remaining government research institu-tions when bidding for government-financed research programmes. Researchprogrammes already approved by the gov-ernment will be conducted according to theoriginal arrangements.

“This is only the first step,” says the min-istry official. “The second step will beginimmediately after this, when 400 or moreresearch institutes under different ministrieswill be involved.” Tian Xuewen

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General Research Institute of Mining andMetallurgy (BGRIMM), is worried.

“After this reform, no one may be pre-pared to do work which is less lucrative, butwhich the state really needs,” says Sun. “Cer-tain research activities will have to be can-celled, and some institutes may not be able tosurvive as research organizations.”

On becoming enterprises, says Sun, theinstitutes may find it hard to maintain a bal-ance between earning money and carryingout fundamental research. “China is notshort of enterprises, but most of the state-owned enterprises are debt-ridden. So-called ‘technological enterprises’ shouldavoid taking the path that they followed.”

But he does not think the reform threat-ens his own institute. “We have been market-based for a long time, and have been in closerelations with industry; this is our differencefrom the Chinese Academy of Sciences.”

BGRIMM has a strong record. Its slurryelectrolysis technology and its emulsifiedexplosives for mining are world famous.

In 1997, the General Research Institutefor Non-ferrous Metals (GRINM) drew a

[BEIJING] In a major reform of its public sec-tor research system, the Chinese governmenthas decided to convert into self-supportingenterprises 242 research institutes that nowoperate under ten government agencies.

The institutes “will go to market,” says anofficial from the Ministry of Science andTechnology. He adds that the government’sgoal is to push the institutes closer to indus-try, in the belief that this will increase theflexibility and vigour of public research anddevelopment (R&D), and speed up theapplication of research results in industry.

The institutes — with a payroll of 173,000employees, including nearly 47,000 retired— will be free to choose their research andcommercial strategies, according to a paperfrom the science ministry. But they will bestrongly encouraged to become technologi-cal enterprises that can carry out R&D inaddition to business activities.

The agencies include the bureaux of thecoal, mechanics, metallurgical, textile andpetroleum/chemical industries, as well as thebureaux of light industry and internal trade.Many were formerly ministry-level govern-ment agencies. In future, they will fall underthe State Economic and Trade Commission,a powerful agency which reports to the StateCouncil, China’s central government.

The State Council has approved thereform plan, submitted by the science min-istry and 11 other ministries. The instituteswill be expected to operate on the new basisfrom 1 July. During a transition period, theState Economic and Trade Commission andthe ten national administration bureaux willbe responsible for routine management.

The science ministry spokesman deniesthat the government is taking this actionbecause the institutes run inefficiently. Apartfrom a few, he says, most of the institutes areefficient and productive. “They have longlearned to survive in the market,” he says.“Indeed, 90 per cent of their revenues comefrom the market. So I don’t think they will begreatly influenced.”

But Sun Chuanyao, president of Beijing

Chinese reform pushes R&D into market

Research in action: visitors at Chinese computer exhibition consider the latest equipment.

Japan’s fast-breeder loses money fast too[TOKYO] Japan’s Nuclear Fuel CycleDevelopment Organization (JNC) has builtup a consolidated deficit of more than ¥1.6trillion (US$13 billion), says a finance reportreleased last week by the government’sManagement and Coordination Agency.

The report says that JNC’s losses arelargely due to the high cost of research anddevelopment work at Monju, theexperimental fast-breeder reactor. Theprogramme has faced increasing publicopposition after an accident at Monju in

December 1995 (see Nature 387, 646; 1995 &389, 653; 1997).

JNC, formerly the Power Nuclear FuelDevelopment Corporation, has received ¥2.4trillion from the government since 1996. Yetthe value of its assets — mainly land andproperty — is currently only ¥850 billion.

The Management and CoordinationAgency is now warning that JNC’s researchneeds to be closely evaluated if it is to justify any future funding for the fast-breeder programme. Asako Saegusa

AP

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