Jiang noted the modern history of mankind has fully proved that major
breakthroughs in basic scientific research are of incalculable
importance to enhancing the ability of people to understand and
transform the world.

China has gained worldwide recognition in important achievements in
basic scientific research since the founding of New China in 1949,
particularly since the start of the reform and opening drive in 1978,
Jiang said.

However, the country's limited financial ability prevents it from
simultaneously focusing extensive efforts on all areas, Jiang said.

He stressed the country should accelerate basic scientific research
from a comprehensive standpoint based on order of importance and
urgency. Related efforts should be carried out in accordance with the
needs of long-term social and economic development.

Jiang added the country must reform its scientific and technological
system and adopt favourable policies to support and encourage
enterprises to engage in scientific research, development and
technological transformations.

Efforts should be made to develop and promote applied technologies
and to stimulate the process for transforming scientific and
technological results into realistic productivity to constantly
resolve important and key problems emerging in economic construction,
Jiang said. Efforts should also centre on promoting fundamental
changes in the economic system and modes of economic growth, he added.

The late Chinese leader Deng Xiaoping stressed China should assume
its due place in the world's high-tech sector, and our generation
should strive to realize the objective which will have far-reaching
significance, Jiang noted.

Jiang said the country should pool necessary manpower, financial
strength and material resources to develop new high technology which
will be of strategic importance to China's economic and social
development in the 21st century.

He noted China should learn advanced technology from foreign
countries and should, at the same time, form and develop the
country's own superiorities in science and technology.

Premier Li Peng, who is also head of the State Science and Technology
Leading Group, presided over the third session of the leading group
this June. Participants in the session heard reports given by the
State Science and Technology Commission and State Planning Commission
on the development of key basic scientific research, on new and high-
tech industries, and on implementation of the state's important
scientific projects.

The summary of the session pointed out priority should be placed on
basic research related to agriculture, energy, information, resources,
environment, population and health, all of which have a close bearing
on the country's economic and social development.



NEWS REPORTS

Shown by computer-based patent network, Jiangsu Provincial Patent
Bureau has proved that the processing techniques for water-proof,
poromeric and luminescent textile materials developed by Chinese
experts are the first kind in the world. The newly developed
techniques are able to make textile materials resistant to water and
free air flowing. The application of water proof and poromeric agents
will make raincoat materials soft, light and poromeric. The
luminescent agent developed by Mr. Wang Chengzhi, a research fellow
working for Shangdong Institute of Chemical Engineering could make
cotton, linen, silk and synthetic materials glistening in the
darkness. The produced luminosity is several dozen times of that by
phosphorescence materials. In addition, the fabrics will still keep
their original luminosity and softness after washing and pressing,
which shows the strong detachment between the luminescent agent and
fabrics.

As revealed by the State Oceanic Administration recently, China will
in the 9th Five-Year plan period send a satellite to watch ocean
colors. The project has been formally approved by the national
authorities.

The said satellite will be mainly used in measuring environment
elements of ocean colors such as sea temperature, pollutants,
offshore topography. Being an internationally proven efficient means
of observing marine environment, the satellite will replace the
conventional line-point observational technique and realize real time
observation of large marine environment.

Experts believe that the satellite will be of far reaching
significance to the development and utilization of China's fishing
resources, harbor construction and management, investigation and
utilization of coastal resources, monitoring and control of marine
pollution, prevention and combat against marine disasters and
safeguarding marine rights.

A Chinese farmer named He Zhigen, who was vitally irradiated,
was cured. Later he got married. This success story can be
attributed to important advances in Chinese military doctor's
understanding of radiation medicine.

Chinese army's radioactive medical research was developed on the
basis of research into nuclear injury and its prevention. The
salient feature of nuclear weapons is that they cause fatal
injuries as a result of radioactivity. Starting with the
biological effects of radiation and the injury repairing law,
Chinese military medical researchers have unveiled the injury law
governing human blood-forming, micro-circulation organs and
various other organs. They have also established the methods for
classified diagnosis of the early stages of acute radioactive
diseases and standards for clinically diagnosing said disease. On
this basis, clinical research has begun.

In these early days of research, medical workers focused their
efforts on finding the best, basic anti-radioactive medicines to
treat acute radioactive diseases. They have put forward a
principle for comprehensive treatment of different diseases. The
researchers also successfully performed a stomach fistula-making
operation on a patient who had been exposed to radiation 24 day
before surgery. This defied the international medical rule that
patients suffering radioactive diseases could not be operated on.
By combining traditional Chinese medicine with Western therapy,
they enabled another patient whose white blood cell and platelet
count was 0.05 percent of normal levels, to recover without
experiencing fever, infection, bleeding or indigestion.

The State Council's Office of Leading Group for Information
(SCOLGI) has just inaugurated the China National Network
Information Center( CNNIC) in Beijing.

The Internet first became available in China in April 1994 via
special international lines. China's field name system began
operating in May that year. There are already many Internet
service providers to choose from, including the CSTNET (China
Science and Technology Network), CHINANET, CERNET (China
Education and Research Network) and CHINAGBN (China Golden Bridge
Network). To date, The network has included some 50,000 computers,
more than 150,000 users and over 2,300 third-grade field names.

According to an official from SCOLGI, the Inter NIC
(International Network Information Center) was established to
provide services for international users, with the aim of
guaranteeing the normal operation of the Internet. The
establishment of CNNIC also aims to bring the management and
operations of China's network on to the path of orderly,
desirable and standardized development.

The major tasks of the CNNIC are to provide a field name
registration service for network users within China. They offer
various information services including network technological
materials, relevant regulations, methods of attracting customers,
and materials on the training of users. The CNNIC will also
provide network communication catalogs, catalogs of different
data bases and data base services.

Traditional Chinese medicine (TCM) is now on the Internet and has
received a warm welcome.

The network is set up by the Academy of Traditional Chinese
Medicine and has various data bases on traditional Chinese
medical science. One data bank has collected more than 210,000
articles published in over 500 biological and medical periodicals
distributed around China from 1984, covering traditional Chinese
medicine, the combination of Chinese and Western medicine,
acupuncture and anaesthesia, qigong, massage and health care.

Other data banks include: information on more than 5,000 Chinese
drugs produced by 1,000 manufacturers; 11,000 items of TCM news
from 100-odd domestic newspapers and periodicals since 1988; a
list of more than 3,300 related scientific research achievements
from 1949-1993; information on over 1,100 overseas TCM institutes
in 30 countries including the United States, Canada, Japan and
Germany; 18,000 health-care product patents in China since 1949.

In addition, the research workers started a special column on the
World Wide Web to introduce the development of Chinese medicine,
the research, teaching, periodical, organizations, medical
treatment and internationals exchanges at the academy. It also
recommends 50 expert consultants in the service system of long
distance diagnosis and treatment.

More data bases will be added in due course, such as one on
treating illness by combining Chinese and Western medicine, the
diagnosis and treatment of complicated cases of illness, and a
list of experts and national institutes of TCM. More electronic
versions of periodicals and books will also be placed on the
Internet.



INVESTMENT GUIDE

China is considering formulating favourable policies to encourage
foreign investment in the high technology sector as part of its
strategy to more effectively solicit investment.

"We are prepared to make appropriate adjustments in tariffs on
equipment imports of foreign-funded high-tech enterprises," Vice-
Minister of Foreign Trade and Economic Co-operation Sun Zhenyu
said on September 11 at the ongoing China Fair for International
Investment and Trade.

Currently, import tariffs plus value-added tax levied on capital
equipment imports are equivalent to 40 per cent of the value of
capital goods imported by foreign-funded enterprises.

Sun acknowledged that the practice had raised the production
costs of technology-intensive ventures, and eroded the
competitiveness of their products on the international market.

He did not elaborate on when the policies will be introduced or
on the extent of the tariff rate reduction.

Analysts said that the proposed move is expected to benefit
foreign investors who have substantial stakes in high-tech
projects, such as some of the petrochemical and electronic
enterprises, and will provide an incentive to prospective future
investors.

China's actual foreign investment rose 8.9 per cent to $ 24.3
billion in the first seven months of this year.

Contractual investment, however, dropped to $27.87 billion in the
first seven months, 42.82 per cent less than for the same period
in 1996.

Experts attributed the slump mainly to the cancellation of tariff
exemptions on capital goods imports.

"It is natural to have ups and downs along the growth curve, and
this will help create a fairer situation in which domestic firms
and foreign-funded ventures are taxed equally," he said.

"But it might have a relatively greater impact on some medium and
small-sized foreign-funded enterprises," he added.

However, the lure of China's huge market potential is becoming
even more attractive to large established foreign investors.

In the first five months of this year, eight priority projects
each with investment value topping $ 100 million were approved, a
300 per cent rise in terms of value over the corresponding period
of last year. And the pledged investment of these projects
totalled $ 1.72 billion, a dramatic increase of 370 per cent.

With the acceleration of the process of China's entry into the
World Trade Organization, China's overall investment environment
also will improved accordingly, Sun said.

"We are looking forward to a bright outlook: tariff and non-
tariff barriers will be ultimately removed; the service sector
will be gradually opened to foreign investors; and restrictions
regarding foreign investment will be eased significantly, with
the removal of local requirements and weighted export ratios for
foreign-funded ventures," he said.

He also stressed that the central and western inland provinces,
not only as an enormous consumers' market, but as a potential
economic powerhouse, are seeking foreign funds and technology to
help them realize their massive infrastructure and manufacturing
plans.

During the fair, many central and western provinces launched
offensives to clinch deals on the strength of their abundant
natural resources and large technical forces as well as low
labour costs.

To date, a number of provinces and regions have struck investment
deals worth $ 11.6 billion with business people overseas, with
investments totalling $8.82 billion. Of the total, contracted
foreign investment volume is reported to be $3.35 billion. The
rest is in the form of agreements and letters of intent which may
be capitalized on later.

Projects in the fields of manufacturing, transportation and
energy accounted for two-thirds of the total number of investments.

The trade transaction volume was $ 420.9 million, of which exports
make up roughly 90 percent.