In March 1985, after extensive discussion, consultation, and experimentation, the party Central Committee called for sweeping reforms of science management. The reforms proposed in the "Decision on the Reform of the Science and Technology Management System" represented a major break with past practices, and they assumed corresponding reforms in the nation's industrial and economic systems. By changing the method of funding research institutes, encouraging the commercialization of technology and the development of a technology arket, and rewarding individual scientists, the reforms of the mid-1980s were meant to encourage the application of science to the needs of industry. It was envisaged that most research institutes would support themselves through consulting and contract work and would cooperate with factories through partnerships, mergers, joint ventures, or other appropriate and mutually agreeable means. The ultimate goal was to encourage exchange and cooperation and to break down the compartmentalization characterizing China's research and development structure.

The principal means for accomplishing the reforms was changing the funding system to force research institutes to establish contact with productive enterprises and to do work directly supporting those enterprises. Direct allocation of funds to research institutes was to be phased out and replaced by a system under which institutes sold their services in the marketplace. The distinctions among institutes subordinate to the Chinese Academy of Sciences, the industrial ministries, provincial-level governments, colleges and universities, and even the NDSTIC were to be minimized, and all were to compete and collaborate in a single market-oriented system. Institutes doing basic research were to compete for grants from a National Natural Science Foundation (which was subsequently established). The reforms were not intended as a budget-cutting measure, and total state funding for science and technology was to be increased.

A technology market and the commercialization of technology in the late 1980s were to be developed to encourage the transfer of technology and the transformation of research results into products and services. Direct centralized administration and supervision of research were to decline, and institutes were to be headed by younger, technically qualified directors, who were to be given broad powers to select their own research topics and to seek out partners for cooperation and consultation. Scientific personnel were to receive better pay and benefits, recognition of their achievements, and the right to do supplementary consulting work and to transfer to units where their talents could be better utilized.

Data as of July 1987