The reform means some 98 research institutions, which are affiliated with four ministerial-level departments, now have to be self-supporting rather than relying on hand-outs from the Ministry of Science and Technology.

It is based on government guidelines, that say large national scientific projects will be implemented via open bids rather than governmental designations under the planned economy.

"The move is to further accelerate the reform of scientific systems, to build a powerful and creative research team," said Zhu Chuanbo, an official with the ministry.

The 98 institutions were formerly attached to the Ministry of Land and Resources, the Ministry of Water Resources, the State Forestry Administration and the China Meteorological Administration.

About 20 of these institutions will become technological firms, with the rest expected to turn into intermediate service agencies or merge with enterprises or universities.

Academic institutions attached to other ministerial-level departments will all operate in accordance with the market economy this year, said the ministry's Department of Policy, Regulation and System Reform.

Research institutions, which are administered by regional governments, will also be "freed" from government intervention this year. The Ningxia Hui Autonomous Region, Guangdong Province and Shenyang, capital city of Liaoning Province, have taken the initiative of this transformation.

Zhu said some academic institutions, influenced by the rigid system under the planned economy, must still tackle the overlap of research projects and a serious brain drain of professionals.

It is urgent to push research institutions into markets, he stressed.

The State Council first gave a green light to the 242 research institutes, which were affiliated with the 10 bureaus of the State Economic and Trade Commission, in 1999 to withstand market competition.

These institutions have performed well since they embraced the market economy, said Zhu.

The Central Iron and Steel Research Institute, for example, has transformed itself into a profit-making technological firm from a former government-funded academy.

The institute's total assets soared to 2.4 billion yuan (US$289 million) last year, from 1 billion yuan (US$120 million) in 1999, according to Mao Suying, a senior official of the institute.

(China Daily February 19, 2002)