Prior to the 1980s, China had a highly concentrated, inefficient science and technology management system which deprived the fundamental agents of decision-making autonomy, impeded entrepreneurship, and separated technological innovation from industrial application. The “Decision on the Reform of the Science and Technology Management System” adopted by the central government in 1985 ushered in a new era, laying the foundation for all the subsequent reform policies. Toward an Innovative Nation documents the major reform initiatives since then, attempts to provide an economic interpretation of their evolutions, and argues that “China’s miracle” is propped up by a solid innovation system. It also discusses the challenges facing China on its way toward an innovative nation in areas such as the role of governments at different levels in allocating R&D resources, the IPR policies, and labor market control.