Chinese hospitals in the 1980s are in the midst of a technological revolution. Based upon data from several regions in China, this paper describes the political, organizational, economic, and philosophical changes which have accompanied the shift in focus from primary care medicine to high technology tertiary care. The increased authority of physicians, greater contact with the West, and increased funding for medical equipment are key factors in these changes. Although the Chinese state continues to control the administration and financing of most hospitals, the decentralizing reforms of Deng Xiaoping have undermined its ability to effectively plan for, and assess new technology. At present, limited resources prevent most regions from excessive technology acquisition, but the state must rebuild its planning capacity in order to foster rational allocation of scarce medical resources.