China will further reform and refine the management of central budgetary research funding to give researchers greater discretion in fund use and better motivate them to concentrate on research, the State Council’s executive meeting chaired by Premier Li Keqiang decided on July 28.

To earnestly act upon the new development philosophy, China will continue to uphold the central role of innovation in the country’s modernization drive. In view of acute concerns of researchers, regulations on fund management that are inconsistent with the laws governing scientific research will be overhauled.

“China is giving greater prominence to innovation-driven development. With the guiding principles and broad policies in place, the new policies introduced this time are part of response to the views and recommendations of research institutes and researchers over some time, and what we need is to ensure their last-mile delivery on the ground,” Premier Li said.

Budget compilation will be streamlined. The nine-plus items subject to budget accounting will be cut to three. The power over budget reassignment regarding equipment costs and others will all be delegated to institutes undertaking research projects. The creation of ceilings in funding that enable the retention of unused funds will be promoted in basic research projects and talent-related programs.

Researchers will be given greater incentives. The proportion of indirect funding in research projects will be increased to see that as much as half of research funding is used for personnel purposes. For purely theoretical basic research projects such as mathematics, the share of indirect funding may be raised to 60 percent. Research institutes may spend all indirect funding on performance-based expenditures.

The scope of labor service expenses will be expanded. Social insurance subsidies and housing provident funds paid by research institutes for personnel hired in research projects will be included in labor service expenses. Cash rewards for the commercialization of research outcomes will not be limited by the total amount of performance-based salary in the institute concerned, or used for approving the performance-based salary base for the next year.

“We must resolutely support basic research. Researchers need to fully devote themselves to their research, and do well in basic research in the same spirit as a blacksmith in the past who would spend years forging a perfect sword. This is of vital and long-term significance in boosting China’s strength in science and technology,” Premier Li said.

Fund allocation will be made at a faster pace. Funds should be channeled to project undertakers within 30 days upon the signing of project contracts. After a project is complete, project undertakers may keep the surplus project funding for direct research expenditures. International cooperation and exchange expenses listed in research funding will not be counted as spending on official overseas visits, official vehicles and official hospitality.

New formats of budgetary research funding support will be developed. Lead scientists will be given the discretion to decide what to study, how to build teams and how to use funds in line with the priorities and scopes on the country’s agenda. A “budget plus negative list" management model will be implemented in new types of research and development (R&D) institutes.

Except for special provisions, research outcomes and intellectual property generated with budgetary funding support will be obtained by new-type R&D institutes in accordance with law, and their application and promotion decided by the new-type R&D institutes.

Research projects will be equipped with financial assistants by relevant parties in providing specialized services such as budget compilation and reimbursement, to ease the administrative burden on researchers. Related labor costs can be covered by the project funding and other channels. Supervision of research funding will be refined, and audit and accounting-based oversight enforced pursuant to laws and regulations.

“Competent departments must rigorously implement the aforementioned policies. The State Council General Office should step up accountability inspections and compliance oversight,” Premier Li said. “Real support for researchers cannot materialize unless these policy measures are fully delivered.”