From Research Academy to State Venture Capitalist: The transformation of Chinese Academy of Sciences
The CAS has long been China's premier scientific research organization; it is also increasingly becoming a diversified commercial platform for incubating technology companies.
The Chinese Academy of Sciences (CAS, 中国科学院) was founded only one month after the founding of the PRC on November 1, 1949. It was created by merging several older institutes, including the Beiping Academy of Sciences (北平研究院, est 1928) with other academic and research institutions inherited from the Republican era. The CAS has long served as China’s most prestigious state-backed research and academic institution in the natural sciences and functioned as a national scientific think tank, directly under the State Council. 1 The University of Science and Technology (USTC, 中国科学技术大学) was created under CAS in 1958, and moved to Hefei during the Cultural Revolution.
Sometimes CAS is imagined as consisting primarily of its sprawling main campus in the Haidian District of Northern Beijing. Zhongguancun Hi-tech park emerged as one of China’s key IT innovation districts due to support from nearby CAS. I have done a quick analysis, based primarily on peering into publicly available investments structure of CAS, to reveal the depth of CAS’s sprawling nationwide network of research institutes, companies, and subsidiary investments. It counts 67,000 staff and 50,000 researchers. In the last ten years, CAS has become the world’s preeminent research institute according to Nature’s index of research output, measured in terms of highly cited publications and researchers, surpassing the UC system and Oxford/Cambridge.2 But these statistics do not account for the subsidiary investments, which count among them some of China’s leading-edge companies in AI, optoelectronics, and semiconductor development.
The research of CAS has always been closely tied to China’s state objectives, including close cooperation with defense technology and military-civil fusion. But in the last 10 years or so, CAS has evolved further a traditional national research organization into a diversified state-owned conglomerate, with holding companies, venture capital funds, and numerous subsidiaries. The CAS operates labs in cities across China, which increasingly function as nodes within regional and urban R&D ecosystems. Several institutional restructurings have transformed CAS into something of hybrid national research institute cum diversified state-owned enterprise. According to a 2024 report by Georgetown’s CSET, CAS has played a role in founding notable companies like chip-maker Cambricon, supercomputing firm Sugon, iFlytek (an AI firm), and Lenovo.3. The CAS is also involved in the development of several “national-level Science Parks”, 国家综合性科学城 large-scale new R&D-focused economic zones in Beijing, Shanghai, Shenzhen/Dongguan, Hefei, and Chengdu, anchored by CAS affiliated institutes.4
National Innovation Ecosystems
The relationship between nationally-funded scientific research and commercially-oriented innovation has been a key debate in many countries at different periods of modern history. In economic geography and innovation, the concept of “national innovation system” (NIS) has been a dominant theme. Lundvall (1992) is credited with coining the term, noting its intellectual roots in the 19th-century ideas of economist Friedrich List.5 In general, an NIS refers to the network of institutions and relationships in a nation that drive technological innovation. Freeman (1987) defined an NIS as “the network of institutions in the public and private sectors whose activities and interactions initiate, import, modify and diffuse new technologies”6
In the U.S., this debate crystallized during World War II, with efforts to boost the allied war effort with defense-related research in radar, nuclear, and eventually what would become semiconductor technologies. During this period, institutions such as the NSF (founded 1950), the National Institutes of Health, the Department of Defense’s research offices (e.g. DARPA, founded 1958), and NASA (1958) were established or expanded, alongside a network of national laboratories and research universities . This public infrastructure — inspired by Bush’s linear model linking basic science to applied outcomes — fostered major innovations (from semiconductors to the internet) while largely leaving product development and commercialization to the private sector .
Commissioned by President Franklin D. Roosevelt in 1944 and submitted to President Harry Truman in 1945, MIT Professor of Electric Engineering Vannevar Bush’s Endless Frontier report called for basic research as a public good, and envisioned partnerships between government, universities, and industry — a so-called “triple helix” model of R&D. The U.S. NIS evolved with substantial state support for knowledge creation, but a comparatively decentralized, market-driven application of that knowledge. Bush’s ideas formed the basis of a bipartisan consensus on the importance of federally funded research that is now under direct assault by the Trump Administration’s attack on federal funding for university research.
Japan and China offer models of state-driven innovation ecosystems in an East Asian context. Freeman showed that Japan’s economic catch-up was bolstered by state coordination of technology policy . The Ministry of International Trade and Industry (MITI) in the post-1950s era acted as an innovation orchestrator – guiding industrial priorities, fostering close government–business cooperation (especially with large keiretsu conglomerates), steering financial and educational resources toward key sectors. The Japanese NIS included a strong central push for modernization, heavy investment in technical education and training, proactive importation and improvement of foreign technologies, and public-private collaboration to diffuse knowledge throughout industry .
Efforts to create a national innovation system in China have been underway for many decades. Some highlights of this include: the “863 Program” (National High-Tech R&D Program, 1986). Launched in March 1986 after a proposal by prominent Chinese scientists to Deng Xiaoping, 863 focused on frontier technologies like IT, space, biotechnology, new materials, and automation. The Torch Program (1988) aimed at commercializing technology and fostering high-tech zones (e.g., Zhongguancun in Beijing). It supported technology transfer from research institutes to enterprises, promoting science parks and incubators. In 1997, the “973 Program” (National Basic Research Program) sought to strengthen basic science capabilities and link fundamental research to strategic sectors. It complemented the applied focus of 863 by funding long-term, large-scale basic research projects.
CAS as State-led Innovation Platform in the New Era
Developing China’s basic R&D and innovation ecosystem has been a major focus of Xi’s tenure. Made in China 2025 (2015) targeted advanced manufacturing and reducing dependence on foreign suppliers. The current “Whole-of-Nation” strategy in the 14th Five-Year Plan (2021–2025), stressed self-reliance and support for choke-point technologies. Under S&T Reform Plans (2021–2023), CAS is undergoing restructuring—streamlining labs, funding, and evaluation systems—to further solidify its role as a hybrid innovation platform, embodying both national research ideals and enterprise-driven commercialization. CAS has also been setting up entities for venture capital investment and asset management.“The Chinese Academy of Sciences Holdings ("CASH"; 国科控股) is an entity set up to manage CAS’s commercial and financial enterprises the companies that are invested in by the Chinese Academy of Sciences (CAS). “CASH was approved by the State Council as the first asset management company engaged in the assets operation of a state-level public institution. Since 2008, CASH has participated in Venture Capital and Private Capital (VC/PE) investments as an institutional investor, and actively conducted direct investments centering on China's strategic emerging industries. CASH has over 30 subsidiaries, covering fields of information technology, high-end equipment manufacturing, environmental protection and new materials, investment, and modern services. Well-known investments include Legend Holdings, China Sciences Group, and China Science Publishing Group.” The Chinese Academy of Sciences Innovation Investment Co (Guoke) 国科科技创新投资有限责任公司 was founded in 2015 under CASH to be a vehicle for translating CAS’s scientific research into commercial ventures. It invests in high-tech innovation companies, particularly at early and growth stages—covering sectors like biotechnology, artificial intelligence, IT, smart manufacturing, and life sciences. In 2017, Chinese Academy Of Sciences Venture Capital Management Company was founded.
Investments into new companies has not come solely from the specially created investment and holding platforms at the top of CAS. Specific CAS institutes also have their own investment and holding firms, which have incubated notable companies. Lenovo 联想 was founded in 1984 by Liu Chuanzhi and 10 other researchers with funding from the Computing Institute of the Chinese Academy of Sciences. Lenovo was originally Legend Computer, until the English name was changed in 2004. Legend Holdings Corporation (联想控股股份) remains as a CAS-controlled holding company with diversified investments into numerous companies. CAS retains a 30% stake in Legend (via CASH), and therefore retains indirect ownership in Lenovo itself.7
The CAS lab Changchun Institute of Optics, Fine Mechanics, and Physics helped invest in a new semiconductor lithography equipment manufacturer Gopptix, headquartered in Beijing’s Yizhuang area. Another example of a CAS-held venture capital platform is the the Xi’an/Beijing-based CASSTAR Technology Co., Ltd. (中科创星科技投资), which is partially owned by the Xi'an Institute of Optics and Precision Mechanics, a CAS lab in Xi’an. The company is a venture capital platform that invests in numerous companies, primarily in Xi’an and Beijing. 8 The Xi’an CAS operates with joint investment from Xi’an LGFVs and district investment platforms in the city’s High-Tech Area (Gaoxin Qu).
Other firms with CAS-connections include iFlytek, an AI company based in Hefei that is partly owned by the University of Science and Technology’s innovation holding co. iFlytek (科大讯飞) is one of China’s leading artificial intelligence (AI) companies, known for its speech recognition, natural language processing, and AI education technologies. Cambricon 中科寒武纪科技股份 is a chipmaker focused on AI chips. Founding brothers Chen Tianshi and Chen Yunji studied at USTC, then joined Chinese Academy of Sciences (CAS). CAS funded the startup Cambricon with a seed grant worth several million dollars.9 In fewer than five years, Cambricon has gone from a startup to a company that supplies Huawei and is now listed on the Shanghai Stock Exchange and has been called China’s Nvidia.10
CAS as Regional Innovation Anchor
Besides its main headquarters in Zhongguancun area of Beijing, CAS is actually a sprawling nationwide system with major branches in Shanghai, Guangzhou, and clusters of labs in Chengdu, Xi’an, Ningbo, and even far-flung Urumqi, Lanzhou, Kunming, and a botanic garden in Xishuangbanna. CAS-affiliated labs in specific cities are anchors of growing regional innovation ecosystems. This is particularly evident in the development of “national comprehensive science cities” 国家综合性科学城, a plan put forward in 2016 to build out large specialized campuses for basic research across China—beginning with campuses in Beijing (Huairou), Shanghai, Hefei, Greater Bay Area (Shenzhen/Dongguan), and Chengdu. Many of these are anchored by key CAS institutes. The CAS has also been expanding its academic footprint, with new colleges of CAS University in Chengdu, Nanjing, Xi’an (see below).
The map below shows the geographic extent of major CAS labs and affiliated institutes.
Further research
In later posts, I’ll delve into more detail about some of the research and science parks under development in China and their urban and regional formations.
In the U.S., the closest analogous organization would be the U.S. National Academy of Sciences, which was created by an Act of Incorporation dated March 3, 1863, now known as the National Academies, or the National Institutes of Health, founded in 1887.
https://www.nature.com/nature-index/institution-outputs/china/chinese-academy-of-sciences-cas/5139072d34d6b65e6a002145
https://cset.georgetown.edu/publication/fueling-chinas-innovation-the-chinese-academy-of-sciences-and-its-role-in-the-prcs-st-ecosystem/?utm_source=chatgpt.com
https://web.shobserver.com/staticsg/res/html/web/newsDetail.html?id=870196
Lundvall, B.-Å. (1992). National Systems of Innovation: Towards a Theory of Innovation and Interactive Learning. Pinter. Pinter Publishers.; Nelson, R. (Ed.). (1993). National Innovation Systems: A Comparative Analysis. Oxford University Press.
Freeman, C. (1987). Technology Policy and Economic Performance: Lessons from Japan.
Wirescreen, 2025
https://www.casstar.com.cn/about-us/
Through the Institute of Computing Technology (中国科学院计算技术研究所)
https://www.thewirechina.com/2025/09/14/cambricon-chinas-nvidia/
Not quite as centralized but the DOE national labs are arguably also a similar kind of structure, blending public and commercial research across a sprawling number of facilities? NAS feels more like a think tank - their sole job is to write recommendations to the government (which I recognize CAS also includes in its umbrella).
Good article. I worked for the CAS between 2011-2018, at the University of the CAS in Beijing and then at the Institute of High Energy Physics. At the latter, spin-off innovation was definitely encouraged although very much secondary to the institute’s fundamental research.