The Economic Benefits of Publicly Funded Basic Research a Critical Review Research Policy

Front Res Metr Anal. 2021; 6: 751497.

Evolution and Features of China's Central Authorities Funding Organization for Basic Enquiry

Aruhan Bai

¹ Institutes of Science and Development, Chinese Academy of Sciences (CAS), Beijing, China,

Cong Wu

¹ Institutes of Scientific discipline and Development, Chinese Academy of Sciences (CAS), Beijing, China,

² University of Chinese Academy of Sciences, Beijing, Prc,

Kejia Yang

¹ Institutes of Scientific discipline and Development, Chinese Academy of Sciences (CAS), Beijing, China,

³ Science Policy Research Unit of measurement, University of Sussex Business School, Brighton, United kingdom of great britain and northern ireland,

Received 2021 Aug one; Accustomed 2021 Nov iii.

Abstract

Basic inquiry is believed to be a crucial factor for building national innovation capacity and therefore was perceived every bit a key battlefield for national technological and economic contest. Since the economic reform and opening upwards in the late 1970s, China has made corking achievements in building upwardly its national research arrangement. However, the lacking capabilities to acquit footing-breaking scientific work remain one of the daunting challenges for the country. How to restructure its funding arrangement for basic enquiry so to reinvigorate its ethnic innovation capacity has been one of the principal concerns for the Chinese government in recent years. To address this, the paper proposes a conceptual framework to analyze how China's central authorities funding system for basic research has evolved since 1985. The paper concludes with a discussion of the identified issues and challenges that China is facing in its current funding system for basic research.

Keywords: basic research, central regime, funding arrangement, China, historical evolution

Introduction

The earth today is undergoing major disruptions in its geopolitical order under the impact of multiple factors such as the changing US-China relationships and the ongoing COVID-nineteen pandemic. Science and technology competitions take been a central focal bespeak in this shifting new global club. Under this context, basic research was perceived as the core battleground for the land investment competition because of its crucial office in building national innovation capability.

China, now a major performer in the global research organisation, has made smashing achievements in levelling upwards its research capacity over the past few decades (Marginson, 2021). This has been evidenced in its quickly increasing investment in R&D, the great expansion in the numbers of inquiry personnel and publications. According to the data from OECDⁱ, Cathay's investment in R&D has witnessed a growth from 15.95 billion (Chinese yuan) in 1991 to 2.214 trillion (Chinese yuan) in 2019; the numbers of researchers increased from 3.18 one thousand thousand (1991) to vii.12 million (2019); and co-ordinate to the statistics from the US National Science Foundation (NSF), Red china reached No. 1 in the earth by 528,263 publications in the S&Eastward field in 2018ⁱⁱ. However, China is still in the process of catching upwardly and a transition period of transforming itself into an innovation-driven development country (Liu et al., 2017). Especially in contempo years, Red china suffers from the external technological stranglehold imposed by Washington, evidenced in its semi-usher sector which has severely undermined its industry development under United states sanctions. To fundamentally accost this outcome, improving its research chapters and ethnic innovation capability has been perceived equally a solution. However, it remains one of the persistent challenges for the country to level up its original innovation capability (yuanshi chuangxin), i.due east., the capability to comport ground-breaking scientific piece of work, such equally the scientific breakthrough that can lead to a Nobel Prize. To fundamentally modify the status quo, the key government is urged to adopt measures to include increasing the investment in bones research and restructuring its funding systems, and so that to strengthen its research capacity in responding to the state'due south strategic needs through leveraging what has been labelled equally "strategic bones research" (Fang, 2019).

There are a wide range of policy measures that can be adopted for latecomers to narrow their research gap to the frontier countries. One of the common measures is to level up the national research chapters through direct increasing public investment in R&D activities. This was believed to be able to build up the country's absorptive capacity which enables itself to fully leverage the knowledge transferred from other leading countries. In this sense, to bring the full potential of the central authorities'southward funding for basic research, it requires horizontal coordination with other policy support, such equally setting up policies to attract the talents around the globe, or to attract the R&D intensive Strange Straight Investment (FDI). Moreover, it is widely acknowledged that apart from straight publicly supporting research related to national priorities, the public investment into R&D should also produce a domino consequence in resource commitment, inducing the private investment into R&D (Wallsten, 2000). The public and the individual sector can build joint efforts to co-fund research institutes (e.g., nanoelectronics lab imec in Belgium).

This paper focuses on the Chinese central regime'southward funding for bones research as it has been the main investor for basic research in the country and will continue to exist so in the anticipated hereafter. To be specific, we address the post-obit research questions: how accept China'due south central government funding systems for basic research evolved? What are the issues and challenges information technology is facing today? And what are the opportunities to improve its funding system in order to build more efficient inquiry systems in responding to its new international challenges and domestic evolution needs?

Most of the existing studies on Prc'south basic research focus on the performance evaluation based on input and output or its resource allocation structures (Cao, 2020; Xia et al., 2020). Zhu and Gong (2008) suggested that People's republic of china invest less in basic research than the world's leading innovative countries, such as French republic and the US. Huang et al. (2015) found that before 2010 the country paid limited policy attention to basic research compared with applied inquiry. Sun and Cao (2014) explained China'due south R&D spending structure and introduced its major research funding agencies. Some problems are identified, for instance, Yang (2016) recognized a heavy imbalanced funding allocation among universities from the National Natural Science Foundation of China (NSFC), and the lack of confidentiality and transparency in the procedure of making decisions for grant resource allotment is regarded as a key consequence (Qiu, 2014).

Withal, at that place are very limited insights on how China's primal government funding arrangement for bones inquiry has evolved. To offer suggestions for its future development, it is crucial to sympathize its historical context. In this paper, we will review the historical evolution of Prc's cardinal government's funding system for basic research since 1985 when it embarked on the reform of its science and engineering system. The study is based on the rich historical information that we accept collected from policy documents, national and provincial science and technology statistics, organizational reports (such equally Cathay's Bones Research Competitiveness Report), and archives such as the news articles and research reports (see the Supplementary Appendix Table S1 for detailed data sources).

The paper is structured as follows. Funding for Basic Inquiry first reviews the nature of basic research, and then it identifies the central government funding models for basic research. Analysis Framework of Funding System for Basic Research introduces our analysis framework for the funding arrangement for basic enquiry. Evolution of China's Central Government Funding System for Basic Research presents a historical review of Chinese central government funding for basic inquiry since 1985, and Features of China'southward Primal Authorities Funding Organisation for Basic Research discusses its irresolute features. The final department concludes with the identified problems and challenges faced in Prc's current state funding system for basic research.

Funding for Basic Enquiry

The Nature of Basic Enquiry

Basic research is by and large divers as research activities "performed without thought of practical ends. It results in general knowledge and an understanding of nature and its laws" (Bush, 2020, folio 17). The curiosity and desire to empathize and explore the unknown are recognized as the key driving force for this kind of scientific action. Information technology has been widely accepted that basic research is experimental or theoretical in nature without recognizing its immediate utility (Matsuo et al., 2002).

Beyond the pure curiosity-driven "blue sky research," Stokes (1997) argued that basic research might have clear applied implications and ideas for awarding. This has featured heavily in the recent argued missions or demands driven bones enquiry (Mowery, 2009). Pasteur's quadrant classification indicates a more than complex relationship between bones and applied research, thus offering a new perspective to investigate how the land should fund basic research, whether purely support the scientists' purpose and interests, or to select sure national needs or demands as prioritized areas. This debate raises the issue of how we should fund basic research.

Under the legitimacy of the widely distributed linear model in Bush-league's report, basic research was then recognized every bit the source of practical research and experimental evolution, and information technology shall exist taken in the scope of government funding for both economic and social benefits. Economists argue that bones inquiry is featured as a public good which suffers from marketplace failure (Nelson, 1959; Arrow, 1962). Basic research has been described as not-rivalrous and not-excludable. For such a expert, it neither reduces the availability to others nor increases the marginal cost of subsequent users. Furthermore, due to the high toll of confidentiality, information technology is hard to bar other users from the access, which may give rise to the free-rider problem. Moreover, bones enquiry shows great positive externalities that tin can produce huge social benefits. Therefore, public investment into basic research has been regarded as a primal solution for market failure. This theoretical rational has been echoed in the seminal report Science––The Endless Borderland by Vannevar Bush, published in 1945, which has provided widely accepted legitimacy of authorities funding for basic enquiry.

Furthermore, bones research, as an exploration of unknown fields with endless frontiers, is total of loftier uncertainties and loftier risks, thus the government is anticipated to offering stable funding to researchers, to make sure that they can continuously conduct research to build their research continuity for scientific breakthroughs. Moreover, to guarantee the funding flowing to splendid science, it is crucial for funders to secure the freedom of researchers to conduct inquiry aligning with their inquiry interests and to explore new frontiers. The US NSF considers the freedom for researchers to pursue their research goals as 1 of the distinctive characteristics between basic and applied research (NSF, 2015). However, under accountability pressure level, the government is in a rush to seek fruitful results from bones research or to channel their investment into certain priorities that are highly demanded by the land. Therefore, how to balance the two to build a more efficient national funding system for basic research has been one of the huge challenges for countries across the world.

Funding Models for Basic Research

This paper specifically delves into the bones research funded by the government, which has been the major supporter in most countries. As indicated in Figure 1, in 2018, the United states federal government took up 42% of the national total investment in basic enquiry, business organisation sector accounting for 29%, universities for 14%, and others for 16%. While in People's republic of china, in 2019, the central government invested l.25% of the national total investment in basic research. Compared to the dominant role of key government, in 2020, local government only contributed to around thirty% in the land'due south public investment in basic research. However, information technology is noteworthy that the share of basic research funded by the United states federal authorities has been declining in the past 20 years and this was likewise the example in China in the past decade, though the accented amount has been going upward because of the rapid increase in the total amount of R&D investment.

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Historical data of US Federal Government and China'southward Central Regime Funding for Basic Research³. Source: Authors' own, calculated based on the statistical data from Federal Funds for Inquiry and Development (US NSF) and Ministry building of Finance (China). Note: China'south investment has been exchanged into U.s.a. dollars based on the exchange charge per unit: 1 USD = 6.46 RMB.

In terms of funding recipients of public investment in basic research, the vast majority of China'south central regime funding for basic inquiry has been directed to national research institutes and universities. Have Mainland china'southward major basic research funding agency NSFC every bit an example, in its 2019 funded Major Programs, research institutes received 33.47% of the total fund while universities received 66.36%, and the rest 0.17% went to other sectors^iv.

Analysis Framework of Funding Organisation for Basic Inquiry

We propose two dimensions to scrutinize the development of funding models for bones research (represented in Figure 2). These two are: (one) drivers of basic enquiry and (2) funding recipients.

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Analytical framework of funding models for basic research.

Equally we accept discussed, "curiosity/interest-driven basic research" and "external need driven bones research" are ii typical driving models for basic research. Curiosity/interest-driven basic research derives from researchers' personal interests, with no awarding purpose, represented by Bohr's atomic theory (Stokes, 1997). The funded enquiry is more often than not identified by the scientific community through peer review, with little involvement of external agencies, i.e., governments or enterprises. While external demand driven research (in accord with Pasteur Quadrant) is conducted to address practical problems in social and economic development or to serve the national strategic needs at the macro level. The sources of this type of research are ordinarily co-suggested by a variety of stakeholders, such as the government, industry sectors, and the scientific customs. Even so, it is worth noting that there is no clear boundary between these 2 types of inquiry. In contempo years, information technology has been increasingly argued for basic science to play a function in boosting the national research capacity for social and economical development purposes, and scientists are pushed to choose enquiry topics that are closely aligned with national priorities.

Universities and public research institutes are two major recipients of government bones research funding. On the one hand, basic research in universities is generally organized past a small research squad which is represented by individual scientists, graduates, PhD candidates, and research assistants. This type of research generally holds a sure caste of freedom which allows researchers to pursue their individual inquiry interests. The chief investigator takes responsibility which goes beyond only conducting academic research merely also preparation students in the meanwhile. On the other hand, bones research conducted in research institutes is by and large organized by larger research groups with more than than one leading chief investigator. These teams typically perform equally coordinated groups to consummate certain research tasks which are either aligned with the missions of their institutes or aligned with national needs or priorities. Express freedom has been guaranteed to the individual researcher within these groups. However, in China, in that location is a trend of homogeneity of national research institutes and universities in regard to their nature of research activities–both bear basic enquiry and compete to go funds from NSFC (Dai and A, 2016).

Although it has been acclaimed, in the traditional history and sociology of science, that individual genius plays a crucial role in scientific discovery (Bowler and Morus, 2010; Merton, 1968), scientific discipline is increasingly being washed in larger teams, which is commonly attributed to factors like the increasing "burden of knowledge" and easier long-altitude communication (Wuchty et al., 2007; Jones et al., 2008; Jones, 2009; Agrawal et al., 2014). This occurs with the corresponding changes of the research funding system which increasingly encourages inter/trans-disciplinary inquiry and cross-organizational collaborations.

Funding tin can provide researchers with the resources to pursue curiosity-driven research avenues, creating the conditions for taking more than risk (Hollingsworth, 2004; Heinze et al., 2009). Holmstrom (1989) and Manso (2011) argued that incentive schemes that motivate innovation and explorative science must exhibit tolerance for failures. This is the example specially if the funding is substantial and covers a menstruation long enough to provide the researchers with the protective space to tackle ambitious questions. Even so, when the government holds express research resources, it volition exist prone to aqueduct these resource into those aligned with national demands or toward practical enquiry or technology experimentations. This has been generally the instance especially for catching up countries (Fang, 2019). Therefore, depending on the country'south development stages and political preferences, diverse funding schemes have been deployed by the government to create incentives for researchers to behave unlike inquiry activities.

Cake grants and project-based funding are two common funding mechanisms leveraged past dissimilar countries to fund bones research. Block grant provides relatively stable financial support, which allows researchers to follow long-term research goals or inquiry institutes to achieve long-term inquiry tasks. Projection funding targets around specific research goals usually provide funds only for a certain flow of fourth dimension and the funded researchers or teams are selected through competitions. Therefore, when it comes to comparison with the more stabilized block grants, projection funding selection mechanism features high uncertainties for researchers as they may non get funded consistently post-obit the aforementioned or related research avenues, only it enjoys the advantages in selecting loftier-operation projects and responding to certain real-time enquiry issues. There are as well other downsides of projection-based funding, eastward.g., selection against highly novel projects (Boudreau et al., 2016) or duplicative research. Moreover, it costs serious efforts for researchers to prepare for research grants and the over-competition may squeeze their time and energy for conducting inquiry activities (A and Li, 2014).

Generally, for the projects-based funding mechanisms, the research interests of individual researchers are more encouraged as the projects are mainly selected based on their research qualities and performances; while for the block grants, national demands and priorities are more emphasized every bit the projects volition be selected in alignment with the national needs or the enquiry institutes' missions. Another deviation betwixt the two funding mechanisms is that for the project-based funding, the projects are generally funded for a certain period of fourth dimension and researchers are impelled to produce enquiry outcomes during this funded period. This may push button researchers for publications or to generate certain inquiry outcomes in a rush, and further undermine their decision or commitment to achieve or fulfil the long-term enquiry tasks.

Based on the research results later on examining 100 successful bones enquiry cases conducted in People's republic of china, Fang (2019) suggested that for the inquiry which requires continuous investment following certain enquiry topics demand stabilized grants; while for the researches which have clear research goals, for example, to achieve certain social, economic, or environmental goals, it is better to be supported by projects. Yet, in recent years, information technology is observed that the purlieus between the ii types of funding mechanisms appears to be blurred, in the sense that the idea of operation evaluation is incorporated into block funding direction, which means it is unlikely for an establish to enjoy absolute stable funding with no extra conditions; while for project funding, certain stability can likewise exist guaranteed based on the research operation. For example, China adopts the functioning-based rolling funding scheme (Gundong Zhichi) (i.e., sure individuals or teams receive another round of funding support based on previous extraordinary performance) to increase its stability. However, in general, block grants are mainly channeled to the national research institutes, or institutionalized teams to accost more general, macro, complicated issues, and the research topics are usually co-suggested by multiple stakeholders; while project funding mainly supports loosely organized research teams (led past individual PI), and their research topics mainly derive from the scientific community itself. How to leverage the two funding mechanisms to efficiently fund research and create a balance among personal interests oriented and national needs and demands oriented selection mechanisms has been a daunting challenge for the funding agencies across the world.

The above two-dimensional analytical framework aims to provide an bending to understand how the Chinese primal government'due south funding mechanisms for basic inquiry change in practice, which will be introduced beneath.

Evolution of Mainland china's Central Regime Funding Arrangement for Basic Enquiry

Since the new China was founded in 1949, China built its research arrangement basically from scratch. In 1956, with the call of "Marching Towards Sciences" (Xiang Ke Xue Jin Jun), China made its first Long-term Plan for the Evolution of Science and Engineering science for 1956–1967 (hereinafter referred to as the 12-Twelvemonth Science and Engineering science Evolution Plan), which was labelled as the state's commencement visionary blueprint for science and technology development. The 12-Year Scientific discipline and Technology Evolution Plan and the subsequent implemented Four Emergency Measures have effectively supported the inquiry and development to achieve specific tasks or national missions, such equally the two bombs and one satellite (Zhang and Zhang, 2019). During this period, because of the limited resource on capital and scientific personnel, China's funding model for bones enquiry follows the principles of "national missions/tasks-oriented disciplines development (Renwu Dai Xueke)," which means that sure disciplines were prioritized in aligning with national needs or missions. This model channeled limited resource into certain disciplines and nurtured major scientific achievements which are aligned with the country'south specific national goals. The major scientific achievements included Artificially Synthesis Bovine Insulin and Artemisinin, the latter gained Mainland china's kickoff and past now the only Nobel Prize in natural science.

Later 10 years' stagnation of science and technology development during the cultural revolution menstruum (1966–1976), Prc entered a new catamenia of development post-obit its economic reform and opening up policy introduced in the late 1970s. Science and applied science were perceived as the master force for levelling upward the land'south productivity and farther toward its economic growth. Even so, there were only express resources channeled into basic research. It was non until 1985 when China launched its reform in science and technology system that People's republic of china's mod research funding system was established. Therefore, in this newspaper, we examine how China's primal authorities's funding system for basic enquiry evolved after 1985. Based on the irresolute dynamics of stability and contest in its funding schemes, i.e., whether it is grant funding dominant or project funding dominant, the development of the Chinese central authorities's funding for bones research tin be divided into three different phases which will be introduced below.

Stage 1 (1985–1998): Rapid expansion of competitive project funding

In 1985, Mainland china launched its reform in science and engineering science system to fully leverage the force of science and engineering science evolution for economic growth. Since and so, Communist china gradually established its modern research funding system for scientific discipline and technology development, which set a foundation for its current inquiry funding system for basic enquiry. Still, in this stage, its primary goal is to overcome the segmentation between scientific activities and industrial activities. Therefore, express attention was given to basic enquiry compared to applied inquiry and technology demonstrations. To reinvigorate the creativity of scientists and build upwardly a certain scale of scientific personnel, competition was leveraged as a dominant principle to select the national well-performed basic research. In 1986, post-obit its counterpart, the US NSF, Cathay ready the NSFC to provide funding for the full spectrum of disciplines in basic enquiry. In 1997, the Ministry of Science and Engineering science launched the National Basic Research Programme (also known as the 973 Programme) to strengthen the adequacy of original innovation and provide scientific support for national evolution need. Represented past the NSFC and the 973 Programme, Communist china institutionalized its fundamental regime's funding system for basic research, of which the project-based funding model was mobilized as a selection mechanism to build upward the state's research capacity.

From 1985 to 1998, the total amount of funding for basic enquiry has been increased gradually. Taking the inquiry projects funded by NSFC as an case, its gross grants increased from 86 million yuan (in 1985) to ane.026 billion yuan (in 1998). Near all the increased funding for basic inquiry from the fundamental authorities was channeled through a competition-based project funding model. In comparison with the previous menses when China was in its relatively weak economic development period, when only limited research resources were channeled to national research institutes and these just enabled them to make a living. Nether the principles of a planning economy, there were only no competitions played out. In contrast, this menstruum's competition-oriented funding mechanisms managed to select the best science to support the land's needs to level upwards People's republic of china's science performance. Moreover, it boosted researchers' productivity as the projects were funded based on their potential scientific operation.

Phase two (1998–2013): Growth of block grants and struggle to achieve a rest between "stability and competitiveness"

The previous phase was dominated by the projection funding mechanism which has levelled upwardly researchers' productivity, all the same it also raised the issue of lacking a long-term funding mechanism, in the sense that in one case the funded projects ended, the research came to an end, as well. Thus, it has caused issues of discontinuity in the resource allotment of research resource to support enquiry institutes or teams continuously following certain research areas for long-term inquiry capacity. Limited stability was guaranteed for the researchers then that they could continuously follow their own research interests or for the national research institutes and so that they tin can follow their missions without being continuously involved in the project's competitions. To accost this lacking in stability upshot, in 1998, the central authorities started to increase the proportions of stable funding, mainly through increased block grants to major national research institutes, such as to the Chinese University of Sciences (CAS), aiming to encourage national inquiry institutes to conduct out enquiry co-ordinate to their own organizational missions and visions.

Specific research grants were channeled to both national research institutes and universities and so as to stably fund their research activities. In 1998, block grants were increased through the Knowledge Innovation Program (KIP) to CAS. This has been mobilized as a pilot for CAS to revitalize its homo resources and redefine the research focuses of its inquiry institutes (Suttmeier et al., 2006). In 2010, later successfully completing the KIP, such block funds were institutionalized to stably fund CAS'south research activities, of which basic inquiry was a significant function. In 2006, the central regime introduced Central Inquiry Funds (Jiben Keyan Yewufei) which aimed to support extraordinary researchers and teams from public research institutes and universities to acquit basic research on a stable and long-term basis (Ministry of Finance, 2006). This marked that cake grant was practical to a wider range of actors. Following the fruitful experience of KIP, similar programs were introduced to the other national research institutes, such as the Chinese Academy of Social Sciences (in 2011) and the Chinese Academy of Agricultural Sciences (in 2013) to further enhance the proportion of stable funding to support their research activities.

Block grants were besides prepare to universities and were channeled through two aspects. 1 was through the 985 Project, a projection initiated by the fundamental authorities in May 1985, aiming to build a group of world first-class universities. To support the 985 Project, additional block grants were appropriated to certain high-level research universities to back up their first-class enquiry activities. The other aqueduct was through the aforementioned Fundamental Research Funds, which were expanded to the higher teaching sector subsequently in 2008.

Stage 3 (2014 to present): Refinement of the funding machinery

The previous stage witnessed a rapid increase in the total corporeality of funds for basic inquiry which has led to certain positive outcomes, such as the rapid expansion of the research personnel and outputs. Since 1985, the central authorities has been expanding the channels and volumes of projects funding for basic research. This undoubtedly increased the proportion of competition-based funding mechanisms, nonetheless it caused a series of negative impacts, especially it resulted in a very fragmented funding organisation. Past 2014, at that place were more 100 S&T funding programs set at the central government level. These programs were fix by multiple agents and they generally fund overlapped enquiry projects, and thus caused huge inefficiency issues and a waste product of national resource (Kang, 2007). To accost this problem, in March 2014, the Country Council integrated these over 100 S&T funding programs into Five Major Plans, namely NSFC, National Fundamental R&D Programmes, National S&T Major Programmes, Technological Innovation Guiding Fund, and Bases and Talents Programme. Of these 5, only NSFC specifically focuses on basic inquiry. By 2017, the 3-years transitional period from the sometime funding system to the new Five-Major-Plans System was basically completed and these V Major Plans are established equally Communist china'due south current main science and technology funding schemes.

The Ministry building of Science and Technology, Ministry of Education, NSFC⁵ and Chinese Academy of Sciences are the main funding agents for Prc'southward basic research (Figure 3). Amidst them, NSFC is the major funding amanuensis in natural science, which mainly aims to encourage the curiosity driven inquiry targeting for excellent scientific discipline. Accept the year 2017 as an example, its full budget was 26.7 billion Yuan (RMB), accounting for 27% of China'south total investment in basic research (Zhou and Zhao, 2019).

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Scientific discipline and technology funds management system of central regime in China. Source: Author'south own.

Along with this increasing expansion of its total investment, NSFC has witnessed a huge growth of the full corporeality of project applications over the years, rise from 153,800 in 2011 to 281,200 in 2020. This has enormously increased the funding agency'due south workload and farther raised the issues of low funding efficiency. The evaluation process in NSFC generally comprises two stages: double-blinded peer review stage and console committee coming together review phase. In general, one project requires v–seven experts to review in the double-blind review phase, and 281,000 applications will need 1.4–1.ix million hours equally input to fulfil the task. This has directly led to the high cost of human resources both in terms of researchers' inputs as well every bit the funding agency'southward inputs. Therefore, how to create the advisable funding scheme to guide the research institutes and universities to follow their own missions has been some other challenge for China's time to come reform of its funding system. In 2021, the Chinese authorities urged to formulate "Strategic Scientific Plans and Programmes" to build the national strategic ability of scientific discipline and technology (Guojia Zhanlue Keji Liliang). Basic enquiry capacity has been signaled every bit a primal focus of this strategic ability. However, several challenges are observed: how to restructure the funding system to set up the stabilized funding scheme for basic inquiry at the national level; how to nurture new missions for national enquiry institutes at the organizational level, then that they can align well with the national needs as well as to distinguish themselves from the universities.

At present, block grants are channeled to universities to back up their goals of being the world's leading enquiry centers in sure disciplines. In 2015, the Land Council set upwards the goal of edifice the world's first-class universities and disciplines (likewise known as double-first-class programme) (State Coucil, 2015), in which information technology integrated the precedent 985 Programme and the 211 Programme. This served the purpose of optimizing the key authorities's funding system for the higher education sector. Still, China is still in the procedure of reforming its research funding organisation so that to level upwards the block grants to support national research institutes in responding to the national strategic needs. This has been evidenced past the recent speech from President Xi, who has urged Prc to "leverage land laboratories to raise the national strategic power of science and engineering science" (Xi, 2016). This was farther endorsed by the 2021 Authorities Piece of work Report. The report proposed to advance the construction of state laboratories system and further to meliorate the national strategic S&T chapters through continuously providing more than stabilized inquiry funding schemes.

Features of China'due south Central Government Funding System for Bones Enquiry

In this section, we aim to capture how the features of Cathay'due south fundamental government funding organisation evolve for basic research. The analysis covers two aspects: drivers of basic research and features of funding recipients.

In the past few decades, China has mobilized different funding channels and mechanisms to fund its basic inquiry so equally to meet its different demands at different stages of scientific development (illustrated in Figure 4). Its funding mechanisms had been shifted from a competition dominant projection funding mechanism (from 1985 to 1998), represented by the establishment of NSFC and the launch of 973 Programme, toward a more than mixed grade of block grants and project funding (afterwards 1998), in which cake grants (represented past CAS KIP and the Key Research Funds) provided stable financial support, while project funding (represented by the NSFC) offered a competitive selection based scheme to select first-class research. This shift aligned with the evolution of the country'due south research system. After the science and engineering science research reform in 1985, the country was in the transition period from its planning economy toward a market-oriented economy, express research resources were channeled to the high-operation research through competitions, and the emphasis in that period was to level upwards the national research capacities and to rejuvenate national research institutes. From 1998 onward, the country increased its block grants and a more than mixed funding mechanism was adopted (project funding represented past the Five Major Plans and block grants represented by the continuous Central Research Funds, Grants to the State Labs and Land Key Labs also as to the first-class universities) so that to both encourage first-class research as well as to guarantee certain national research institutes and universities for more stabilized funding in aligning with their missions and the national demands. In the recent years (since 2014), the Chinese government argued that more than attending and funds need to be channeled to build the national strategic power of scientific discipline and technology (represented by the recent reform in its country laboratories and fundamental laboratories as well every bit to debate for "Strategic Scientific Plans and Programs").

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Milestones of Cathay's central regime funding system development for basic research. Source: Writer'south own.

From the historical evolution, we find that the Chinese central regime leveraged unlike funding mechanisms to support bones research at different stages. Currently, the country is struggling to make a balance between cake grants and projection funding in the authorities's basic inquiry funding mechanism. We discover that the land'south basic research funding arrangement has been heavily overshadowed by contest-oriented projection funding scheme. In add-on, suffering from the shortage in long-term oriented stabilized block grant funding scheme, the country's current funding system cannot provide adequate incentives to encourage funding recipients to continuously devote themselves into a particular research topic. Moreover, this lack of continuity undermines the land's capacity to make scientific breakthroughs to win for the country a Nobel Prize. It becomes obvious that purely relying on the project funding but cannot fully cater to its national demand.

Nonetheless, China is faced with persistent challenges in levelling up its indigenous innovation capacity and leveraging its enquiry for the purpose of industrial innovative activities. These challenges have been perceived every bit bottlenecks for the land's farther development and urgently need to be addressed, particularly under the force per unit area of the ongoing trade war between China and the United states. Basic inquiry has been perceived as playing a crucial role in this progress. Increasing investment scales in basic research and improving its efficiency in responding to the national strategic demands will be the focal points for the land's hereafter policy measures. Therefore, how to reform its funding system to create incentives to improve its research qualities, instead of merely focusing on the expansion of publication quantities, equally well equally to enable its research organization to respond to the new challenges and demands has become one of the major concerns for Prc'south future science and technology arrangement reform.

Another persistent claiming faced by China is the increasing homogeneity of the national research institutes and universities. We observe both the national enquiry institutes and the universities need to apply for bones research funding through the same channel. In that location is no clear distinction of missions between national research institutes and research universities, which has caused over-contest between the two and further leads to waste and low efficiency of national research resources. Therefore, it has go one of the pressing issues for the country to farther optimize its public funding arrangement for the two types of funding recipients, namely national research institutes and universities.

Decision

To conclude, we accept offered an analytical framework to examine the primal regime funding organisation for basic inquiry from two dimensions: (1) drivers of bones enquiry; (2) funding recipients. Specifically, we accept applied this framework into the historical analysis of Cathay'due south central government funding system for basic research since 1985. The historical evolution of China'southward central government funding system for bones research has featured iii distinctive stages.

There have been shared trends of contempo changes in People's republic of china'southward basic research funding organisation compared with the global changes. For example, Red china recently put emphasis on the role of strategic basic inquiry that aims to bring basic research to fulfil the economic and social demand. This has been the example for about OECD countries, which are dominated past programs that serve specific government missions, such as defence, agriculture, health, energy, and other activities (Mowery, 2009). For mission-oriented research, information technology has been argued that public investment should play a office in shaping the marketplace, analogous, and collaborating with individual investment (Kattel and Mazzucato, 2018; Mazzucato, 2018). In this sense, how to create the crowd-in outcome for public investment in basic enquiry and build public-private partnership to fully leverage the public money to serve national demands should be a concern for China's futurity policy measures. NSFC has made its attempt to create joint research programs with enterprises to motive private investment for supporting basic research. However, People's republic of china has only kickstarted its exploration in this journey. Furthermore, China's recent active debates on how to motivate a wider range of dissimilar stakeholders, apart from the scientist community simply too industry actors, governments, and other stakeholders, to be involved in project selection to direct basic research following social-economic objectives have also been shared in the other OECD countries. All the same, how to become beyond the previous peer review evaluation approach to build more efficient cess approaches to reach this purpose would exist a huge challenge for the land.

Compared with its counterparts of leading innovative countries, People's republic of china is even so in its transition catamenia to create appropriate incentive systems to efficiently mobilize its enquiry system to target national missions. On the one manus, as having discussed in our newspaper, the country is currently suffering from the increasing homogeneity amidst the national enquiry institutes and universities. Thus, how to nurture efficient coordination amidst different research organizations would be key for the country to accomplish this goal. On the other mitt, the Chinese enterprises devote express proportions of their R&D spending on basic research compared to the US companies.

Acknowledgments

The authors capeesh Professor Xiaoxuan Li's inspirations for this article and the constructive comments received from two anonymous reviewers.

Footnotes

^aneAccess at: OECD https://stats.oecd.org/Alphabetize.aspx?DataSetCode=PERS_FORD

²Access at: NSF https://ncses.nsf.gov/pubs/nsb20206/publication-output-by-region-state-or-economy

³Due to the lack of accessible information before 2008, hither nosotros present China's historical data from 2008 instead of 2000. Note: The United states of america and Red china adopted different measures for basic research which may cause differences when comparing their total amount of investment in basic research. To elaborate, for instance, the educatee education investment related to basic research has been included in the US data, while excluded in the Chinese dataset (i.e., in China, the educational related programs, such as graduate students' education, 985 and double-kickoff programs, vest to the expenditures of the Chinese Ministry of Education, which has not been counted in this basic inquiry dataset past Ministry of Finance)

^fourCalculated by authors based on the statistical data of the funded projects from NSFC 2019 annual study

⁵In 2018, NSFC was affiliated to the Ministry building of Scientific discipline and Technology (Well-nigh) simply kept its due independence in operation

Data Availability Argument

The original contributions presented in the study are included in the article/Supplementary Material. Further inquiries can be directed to the corresponding author.

Author Contributions

The authors have distributed their research work equally follows: Introduction, theoretical background and conclusion by KY, and CW; tables and figures by CW; analysis framework, feature analyses, and implications past AB. The content of the manuscript has been approved past all the authors.

Funding

The paper is supported past China's NSFC, through the project entitled "Report on the Features and Characteristics of Missions/Tasks Oriented and Marvel Oriented Research Activities-A Multidimensional Feature Extraction and Classification Model Based on Multi-Depth Neural Network Assay," project number 71974184; and "Youth Innovation Promotion Association of the Chinese Academy of Sciences," project number E0X00916.

Conflict of Interest

The authors declare that the research was conducted in the absenteeism of any commercial or fiscal relationships that could be construed equally a potential disharmonize of involvement.

Publisher's Annotation

All claims expressed in this commodity are solely those of the authors and practice non necessarily represent those of their affiliated organizations, or those of the publisher, the editors, and the reviewers. Any product that may be evaluated in this commodity, or claim that may exist made by its manufacturer, is not guaranteed or endorsed past the publisher.

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