Science and technology (S&T) systems are interconnected with economic systems. After China began to make its economic system more market‐oriented in 1979, reforms to its S&T system became urgent. China’s major breakthrough in reforming its S&T system occurred in 1985. This paper provides data on China’s changing S&T sector, outlines the processes of its reform and China’s changing sources of funding for R&D. China’s evolving technology market is given particular attention and some of its pitfalls are discussed.