In recent years, the role of universities in the innova-tion process and economic development has become the center of many theoretical and empirical studies. One way to characterize the institutional relationships among university, industry, and the government is the so-called ’triple helix’ model. In this model, the university is a key element of the innovation system both as human capital provider and see - bed of new firms in the emerging knowledge economy. The three institutional domains, public, pri-vate, and academic, that formerly operated at arms length in lais-sez faire societies, are increasingly interwoven with a spiral pat-tern of linkages emerging at various stages of the innovation pro-cesses . This model is in contrast to the model of a relatively inde-pendent academic world, which argues for keeping university and industrial research separate, because the function and objectives of the two are different. Academic science is a quest for funda-mental discovery while industrial research focuses on profit motives and proprietary access. Intermingling the two would have negative social welfare implications. An alternative model by Florida and Cohen (1999) characterizes the nature of the relationship between university and industry as a tension between the pursuit of emi-nence and the need for funding support.In this presentation, I will not explore the appropriateness of spe-cific forms of university - market linkages. Rather, I will examine the evolution of the academic - market linkages in China in the context of China’ s reform in its innovation system. I will analyze the role of Chinese universities in China’s innovation system, the forms of their linkages with industry, and the development of uni-versity - run enterprises. These enterprises have recently become the center of a controversy associated with the appropriateness of the practice. I will examine the way these enterprises are created, their industrial distribution, their contribution to the development of indigenous high - tech industries, and the problems and contro-versies surround them. Finally, the prospect of the university -market linkages in China and its implication for the overall Chi-nese innovation system will be explored. In recent years, the role of universities in the innova-tion process and economic development has become the center of many theoretical and empirical studies. One way to characterize the institutional relationships among universities, industry, and the government is the so-called ’triple In this model, the university is a key element of the innovation system both as human capital provider and see - bed of new firms in the emerging knowledge economy. The three institutional domains, public, pri-vate, and academic, that formerly operated at arms length in lais-sez faire societies, are increasingly interwoven with a spiral pat-tern of linkages emerging at various stages of the innovation pro-cesses. This model is in contrast to the model of a relatively inde-pendent academic world, which argues for keeping university and industrial research separate, because the function and objectives of the two are different. Academic science is a quest for funda-mental discovery while indu strial research focuses on profit motives and proprietary access. An alternative model by Florida and Cohen (1999) characterizes the nature of the relationship between university and industry as a tension between the pursuit of emi-nence and the need for funding support.In.In this presentation, I will not explore the appropriateness of spe-cific forms of university - market linkages. Rather, I will examine the evolution of the academic - market linkages in China in the context of China ’s reform in its innovation system. I will analyze the role of Chinese universities in China’s innovation system, the forms of their linkages with industry, and the development of uni-versity - run enterprises. These enterprises have recently became the center of a controversy associated with the appropriateness of the practice. I will examine the way these enterprises are created, their industrial distribution, their contribution to the development of indigenous high-tech industries, and the problems and contro-versies surround them. Finally, the prospect of the university-market linkages in China and its implication for the overall Chi-nese innovation system will be explored.