China is centralizing its science and technology (S&T) sector while attempting to mitigate the costs of centralization. To this end, policymakers have designed “central-local joint action” mechanisms that balance the powers of central and local authorities. These mechanisms involve consultative processes led by the central government that aim to negotiate shared S&T investments in national priority areas with local authorities. In this policy brief, Siwen Xiao and Yaosheng Xu, research associates at IGCC, detail how these mechanisms are being implemented across three programs: the National Key Research and Development Program, the National Guidance Fund for Technology Transfer and Commercialization, and the National Centers of Technological Innovation. They also explore the challenges associated with recentralization and power balancing, which threaten to diminish China’s ambitious S&T goals to mere slogans, rather than unified and well-resourced national efforts.

China’s technology and industrial policy programs have grown in scope and intensity since 2020, but the vocabulary used to describe them is vague and often misleading. This policy brief decodes seven essential terms and shows that they have concrete and complementary meanings. When understood in concert, they reveal the establishment of a large-scale, government-directed program of mission-oriented research, development, and application. Together these terms outline a substantial expansion of the Chinese government’s direct role in organizing economic activity, and hint at some of the limits of that expansion.

China’s industrial policy does not fit well into traditional concepts of industrial policy, and even clear definitions of China’s industrial policy are rare. Everybody seems to agree that China has an aggressive industrial policy, but there is surprisingly little discussion about what that industrial policy is. To some extent, this is because China’s industrial and technology policies have been in a constant state of flux since the mid-2000s. In this short piece, we situate Chinese industrial policy and then argue that most of the process of restless change can be incorporated into a trajectory of two dimensions: first, the build out of a policy/planning mechanism; and second a shift in the ultimate objective of technology and industry polices from economics to security. We argue that these two simple features are robust enough to bear the weight of most characteristics of Chinese industrial policy. We then discuss the most recent phase of China’s industrial policy, characterized by a focus on security and new implementing instruments such as the “new-style national team” and the strengthening of the “national strategic science and technology force” (NSS&TF). These are clearly the culmination of the trends described earlier. Since there is still much we do not know about these very recent innovations, longer-run trends are invaluable in suggesting a hypothetical framework for current institutions.

China continues to dramatically increase the priority it gives to science and technology (S&T). This paper reviews China’s reorganization of its S&T system, which is part of a broader Party and government restructuring plan. The most important elements of the bureaucratic reform were the establishment of a Central Science and Technology Commission (CSTC) and the reorganization of the existing Ministry of Science and Technology (MOST). These reorganizations have been carefully thought out and in gestation for the past several years. If the subordination of research and innovation to immediate policy goals is taken as a given, most of the reorganization measures are reasonable attempts to moderate the costs that would be expected with a campaign-style approach to S&T. At the same time, the measures are no panacea. Bureaucratic conflicts will persist, though shifted to different arenas, and the biggest challenges will persist: the subordination of research to security imperatives; divorce from international collaborative research; and narrower use of market incentives will all be very costly to China’s science efforts and aspirations.