Despite marked improvement over the early years of the People's Republic, the technological level of Chinese industry generally remained quite low in the late 1980s. The Chinese made remarkable technological progress in some areas, such as nuclear weaponry, satellites, and computers but overall the induÍÍÍstrial sector lagged far behind that of the developed countries (see The Reform Program , ch. 9). Much of China's machinery and equipment dated from the 1950s and 1960s. The Soviet Union had provided technology assistance during the 1950s, but such aid ended abruptly in the early 1960s with the break in bilateral relations (see The Soviet Union , ch. 12).

One of the main reasons for lagging technology was the lack of coordination between research institutes and production enterprises. Between 1979 and 1984, the number of major scientific and technical research discoveries grew from 2,790 to 10,000 and the number of inventions approved by the state from 42 to 264. Most of the discoveries and inventions were never implemented. This was mainly because research institutes and production enterprises operated independently, with little or no exchange of information. Also, most enterprise managers were more concerned with meeting production quotas than with technological innovations.

There were no clear goals for research and development, and no concept of the importance of research and development to industry. Instead, efforts concentrated on research and development for purely scientific purposes. Therefore, China did not develop a broad base of industrial research and development. By 1981 only 8 percent of the total research and development work force was involved in industrial research compared to 72 percent in the United States. In 1983 only 3.2 persons per 10,000 population were involved in research, compared to 31 per 10,000 in the United States. Institutional obstacles and resource shortages also plagued research institutes.

In 1985 the CCP issued the "Resolution on the Reform of the Science and Technology Management System." The resolution sought to coordinate research and production more closely. Part of the overall strategy of the Four Modernizations was to redirect science and technology toward economic progress. Research institutes were to compete for contracts from various industries and operate on a fee-for-service basis. Emphasis went to cooperation among factories, universities, and other institutes.

As of 1987, the status of this effort remained unclear. The metallurgical industry had applied more internal technological innovation than the electronics industry because the technologies in the former were more developed than in the latter. The metallurgy industry made a stronger effort to blend research and production in individual enterprises. Also, major metallurgical complexes had internal research facilities for new-product research. On the other hand, electronics was much more compartmentalized by the late 1980s there was n 6f4 o decisivve breaking of the barriers between the technical and production elements.

China's assimilation of imported technology had mixed results in the mid-1980s. There had been some remarkable accomplishments, but they had taken a long time. For example, advanced West German cold-rolling technology had moved into the Anshan iron and steel complex in Liaoning Province. The electronics sector was not as successful, because of shortages of raw materials, lack of a reliable power supply, low manpower skill, and a shortage of service and applications personnel. An exception was the Jiangnan Semiconductor Plant in Wuxi, Jiangsu Province, which received equipment from numerous Japanese and American companies. By 1987 it was highly productive. However, China's electronics industry, like most other industries, was far from implementing advanced technology, whatever its source.

Data as of July 1987