Agricultural Research Policy in China: Testing the Limits of Commercialization-Led Reform*

The reforms in the research sector vividly illustrate the propensity of the Chinese leadership to implement reform in all sectors of the economy. The government has attempted to increase research productivity by shifting funding from institutional support to competitive grants, supporting mainly research on issues relevant to economic development, and encouraging applied research institutes to earn their money by selling the technology they produce. The paper finds that while competitive grants programs have probably increased the effectiveness of China's agricultural research system, the reliance on commercialization revenue to subsidize research and make up for falling budgetary commitment has weakened the system. Empirical evidence demonstrates the declining effectiveness of China's agricultural research capabilities, and also shows that the system s national research institutes—those with high quality breeding team supported by a constellation of agricultural science departments and with access to international research—have fared the best in the reform era and have not seen their research output fall.