AbstractIn the early 1980s, China introduced a series of new policies aimed at linking research to production. The Chinese Academy of Sciences as an independent research network has had to define its own role in these reforms. The reform has been moderately successful in emphasising the needs of economie construction. However, funding has been reduced and targeted towards key projects identified by government or the academy. The rate of diffusion of S&T results remains rather low, probably because of the lack of the right environment for entrepreneurship.One option for the academy is to abandon the goal of integrating more closely with production enterprises and to concentrate on key national projects. Another is to promote the trend which has already started for the institutes to set up their own production facilities.