during the "cultural revolution," China has identified the critical need to rebuild its research and educational infrastructure in order to pursue its economic reform and development strategy. China also has recognized the need to open its doors wide to international S&T cooperation as part of that rebuilding process.

Reforms in China, begun in 1978 and accelerated since the mid-1980s, have enhanced the value to the U.S. and other countries of S&T cooperation with China. Among these the following should be cited: The training and retraining of a new generation of scientists, over 50,000, half of these in the U.S., a major upgrading of China's top research facilities through extensive acquisition of new equipment; dramatic improvement in the openness and availability of scientific information; and bold experimentation with new organizational and funding programs for research and development, more compatible with forms found in the West. Examples of this last point include establishing competitive funding structures such as the National Natural Science Foundation of China and creating "open" laboratories which encourage the hitherto nonexistent mobility of scientists. As a result of this transformation, the number of opportunities for U.S. scientists and engineers to collaborate with Chinese colleagues is growing at a prodigious rate.

Also noteworthy is the commonality of S&T policy concerns between the U.S. and China which has emerged and sharpened over the past two or three years. Both countries have pinpointed the vital importance of transfering laboratory efforts into production. Whether the underlying issue is labeled "economic competitiveness" or "economic development," policy-makers on both sides are seeking to forge better ties and transfer mechanisms between R&D institutions and industry and to enhance the economic benefits of relatively limited R&D resources. The drive for commercialization of research in China, encouraged by national policy, has reached a fever pitch since the fall of 1987. This is causing dramatic changes in the landscape of China's R&D sector, presenting major challenges and opportunities for China's international partners. The recent emergence of hundreds of high-technology companies, in an emulation of "silicon valley", may represent an opportunity to forge bilateral ties of immediate commercial as well as scientific benefit for U.S. laboratories and companies. At the same time, the increasing institutional complexity of China and the steady decentralization of decision-making authority to the level of individual research laboratories and production enterprises has intensified the need for the U.S. to sharpen its ability to identify new bilateral cooperative opportunities. Looking to the future of the overall S&T relationship, the U.S. can anticipate increasingly rapid growth as China continues to emphasize the development of its own S&T sector and as its research accomplishments move steadily to world-class levels. That domestic trend can be expected to generate even greater Chinese demands for international cooperation. The U.S. is likely to remain one of China's preferred partners despite China's expanding ties with western Europe, the Soviet Union and the Eastern Bloc. On the U.S. side, the research communities will continue to find steadily increasing benefits in collaborating with China's dynamic R&D enterprise.

Three issues are likely to dominate as the relationship matures:

(1) As the relations on the private side expand and intensify, the role of the government-to-government program will have to be constantly reassessed to ensure maximum

catalytic effect on private sector relations as well as to ensure the particular scientific needs of, and benefits to U.S. researchers.

(2) The management of the relationship, both public and private, will continue to face the need to ensure the national security concerns of the U.S. China's rapidly improving technological capabilities will raise the level of Chinese expectations toward further transfers. At the same time, China's growing ability to produce increasingly high levels of technology may make other areas of technology transfer a moot issue.

(3) Especially because both governments are actively encouraging the commercialization of research, the protection of intellectual property looms large on the horizon. This is a significant issue in China's domestic context, and China is moving steadily toward establishing its own legal and regulatory system of intellectual property rights (IPR). At this stage, however, the system is still embryonic and mismatched with our own. The U.S. is actively encouraging Chinese efforts in the IPR area, and discussions specifically related to the protection of intellectual property emerging from S&T cooperation have been under way in 1988.

U.S.-China S&T cooperation is overseen by a joint commission, chaired on the U.S. side by the President's Science Advisor. The commission, which meets approximately every two years, is scheduled to meet next at Washington in 1989. It is expected that the meeting will appropriately symbolize the beginning of a second decade of S&T cooperation of ever expanding technical, commercial and political benefits to both countries.

EGYPT

U.S.-Egypt science and technology cooperation is conducted under a bilateral agreement signed in 1981 and renewed in 1986. Ongoing projects include archeological research, environmental programs and the activities of a U.S. Navy medical research unit at Cairo. Since 1987, the principal focus of bilateral S&T cooperation has been on USAID-funded projects. In FY 1988, a total of $98.5 million was committed with $50 million of the total to energy conservation, $40 million to research into schistosomiasis, $8.5 million to energy manpower training.

S&T cooperation is a integral part of the U.S.-Egypt relationship. Development is Egypt's primary economic concern and the U.S. can contribute scientific and technological expertise to the Egyptian development effort. Energy conservation, for example, will enable Egypt to better utilize its energy resources and maintain its exports of crude oil which have been a major foreign exchange earner in an economy faced with a foreign exchange constraint. At the same time, the medical research effort will benefit both nations, as well as other countries in the region.

Egypt offers U.S. scientists and researchers generally open access to Egyptian facilities. Foreign researchers must have a sponsoring Egyptian institution, but normally this is not difficult to arrange. In recent years, the government of Egypt has begun the process of removing barriers to cooperation between Egyptian public institutions and the private sector, both domestic and foreign. This has led to the expanded use of Egypt's public laboratories by private companies.

FINLAND

In 1985 the U.S. and Finland concluded an umbrella government-to-government S&T agreement and eight interagency agreements have been signed over the past six years. On the U.S. side, participation includes NRC, NSF, DHHS, DOE, DOT and the U.S. Army and its Corps of Engineers. The agreements are well regarded by both governments and have expanded and strengthened U.S. official contacts with key elements of the Finnish S&T community as well as with government and education leaders.

Although Finnish S&T is well respected in the U.S., the level of scientific cooperation between the two countries is modest. The Finnish government has tried to increase the activity by publicizing Finland's scientific capabilities and by urging the U.S. to make the bilateral relationship more structured. In September 1988, for example, the Finnish Ministry of Trade and Industry was a major sponsor of and participant in the Energy 2000 Symposium held in Wilmington, Delaware.

U.S. government agencies, public and private universities, and a variety of U.S. private companies have S&T relationships with their Finnish counterparts and obtain free access to Finnish facilities. U.S. scientists and engineers participate in cooperative research projects, and frequently attend conferences and seminars at the invitation of their Finnish counterparts.

FRANCE

The U.S. and France regard S&T cooperation and competition as integral to their economic, political and security relations. These interests are typified by major negotiations through the European Space Agency (ESA) projects on breeder reactors and fusion energy, health issues such as AIDS, and ozone-layer depletion. Discussions about the Strategic Defense Initiative (SDI) and the European Eureka Program are of continuing mutual interest.

Joint activities of note in areas of French expertise include space, high-energy physics, biomedicine, nuclear energy and other fields. A large number of U.S. agencies cooperate directly and indirectly with French scientists through interagency and project agreements. NSF conducts joint research, staff exchanges and seminars. NASA and NOAA cooperate in large scale activities that yield complex essential data from space-based atmospheric, terrestrial and oceanographic research. There is an acute awareness in France that the economic--and thus social, political and security--future depends in part upon being technologically competitive. France assigns priority to advanced telecommunications, computer software and electronics, space and aviation systems, and biotechnology. Each of these has improved French industrial prosperity significantly. There is particularly active French interest in the U.S. experience in university and industrial research and innovation. An agreement finalized in 1986 establishing Franco-American cooperation in entrepreneurship and technology development, supported by nongovernment funds, has stimulated great interest and initiative on the part of technology-based small and medium-sized U.S. and French firms. Over 100 such firms in France have expressed interest in joint ventures with U.S. counterparts. Similar enthusiasm has been evidenced by U.S.

firms.

Increasingly intensive collaboration has taken place in research and development on AIDS. Joint projects through the U.S.-French AIDS Foundation have been developed which focus on the AIDS-related problems of developing countries, particularly those in Africa. Exchanges of data and joint research between France (e.g., the Pasteur Institute and the National Institute for Health and Medical Research) and the U.S. (e.g., NIH) have evolved positively since the resolution of AIDS test kit patent disputes in 1986.

In an extensive review of nuclear electric generating technology, the French have reaffirmed their confidence in the light water reactor, expecting it to remain the major component for electricity generation in France well into the next century. Exchanges between U.S. and French experts on nuclear reactor safety, more intense after the Chernobyl disaster, continue to be extremely useful. In general, there is more information available on French reactor operating experience at present than before Chernobyl. The French, in reemphasizing the importance of their light water reactors, which supplied approximately 80 percent of French electricity in 1987, have noted that fast breeder reactors are not expected to make a significant contribution to electricity generation until well into the next. century.

Much of the space cooperation between the U.S., France and other European countries now is channeled through the European Space Agency (ESA). In a major step for U.S.-European space cooperation, ESA approved and funded in 1987 the entire range of activities for its participation in the U.S.-led international space station effort. This includes the European-supplied attached pressurized module for the station and the polar platform for earth observations. Led by France, ESA also approved the Hermes space plan and the Ariane V space launch vehicle. The successful conclusion of the space station agreement will be a major milestone in U.S.-French space cooperation. France, as the European leader in space, has much to gain from this program, as does the rest of Europe. In addition to providing the U.S. and Europe with a fully capable, permanently manned space station in low earth orbit, the cooperation strengthens western partnership at a time of increasing Soviet overtures to Europe for expanded cooperation in this vital area.

The U.S. and France generally agree on the need to protect intellectual property and to ensure symmetrical access to research and development facilities and opportunities. France has been a leading advocate of international fora on strengthening intellectual property protection, and considers including specific protective language in cooperative S&T agreements on a case-by-case basis.

FEDERAL REPUBLIC OF GERMANY

The Federal Republic of Germany (FRG) is one of the closest partners of the U.S. in science and technology. Over 20 bilateral agreements for cooperation have been concluded, linking agencies of both nations. There are about 200 agreements of various kinds among universities and institutions. An estimated 5,000 to 6,000 American scientists a year go to the FRG on exchange visits, with a similar number of Germans coming to the U.S.

This high level of cooperation is due not only to the ability of most German scientists to work in the English language, but also to the eagerness of German researchers and institutes to work with their American counterparts. Clearly,

American science and technology is held in the highest regard, and an opportunity to work in the U.S. for one or two years is considered a valuable component of a scientific career.

From the U.S. point of view, the FRG is an attractive partner because of the quality and depth of its scientific capabilities and achievements. The FRG expends over $30 billion a year on research and development, roughly 40 percent more than either France or England, and ranks third among the industrialized countries. In addition, in fundamental research where cooperation is most intense, Germany is especially strong.

Whether in Germany's decentralized university system or in the more than 50 Max Planck Institutes, German scientists are well-funded, well-equipped and well-regarded. One measure of their success is that in the last three years, German scientists have won the Nobel Prize in physics. Another is that schools of engineering and science seem to have no trouble attracting qualified and motivated students.

The best example of the close partnership between the U.S. and the FRG in science and technology comes in the exploration of space. A major event in the history of space cooperation came in 1988 when agreement was reached for the participation in the U.S. space station by Canada, Japan and the member nations of the European Space Agency (ESA). By virtue of its being the largest contributor to ESA's planned contribution to the space station, the FRG played a role in European negotiations with the U.S. As the space station will take about 10 years to build and has an expected lifetime of 30 years, cooperation will continue over several decades and set the stage for additional collaborative space projects. NASA also has scheduled the shuttle launch of the second German space lab mission for late 1991. The first mission, launched in 1985 and manned with U.S and German astronauts, was a major

success.

This German-American partnership extends also to international environmental policy. The FRG became one of the leading proponents of international action to reduce the amount of ozone-depleting chemicals being released into the atmosphere. German scientists are involved in studying atmospheric ozone and also climate notification. Other areas of close scientific cooperation include the causes of forest damage and the effect of acid rain.

The FRG and the U.S. also agree on the need to take effective measures to curb the proliferation of nuclear explosives and ballistic missile technology. Both countries are members of the seven-nation missile technology control regime founded in 1987. A strong supporter of the International Atomic Energy Agency (IAEA), the FRG played a lead role in the international agreements adopted in 1987 on nuclear accidents. Bilaterally, the U.S. and the FRG cooperate in nuclear safety and waste management. Germany participates in the quadripartite fusion project in the IAEA.

In high energy physics, the German synchrotron (DESY) at Hamburg is rapidly becoming one of the world's premier centers. Among foreign researchers at DESY, Americans are the most numerous. The largest contributor to the CERN, the FRG has expressed an interest in scientific collaboration with the superconducting supercollider if the U.S. builds a facility.

One area of concern among German scientists and officials is the growing tendency in the U.S. to exclude foreigners from access to unclassified scientific information on grounds of national security.