There has been no significant improvement in China’s comprehensive innovation capability over the past decade despite the country’s tremendously large investment in research and development. This study uses a three-stage procedure (i.e., research innovation, experimental development, and value cre-ation) to understand this disappointing outcome by estimating the efficiency of the technology transfer operating through major Chinese universities. We find a substantial decrease in the average level of efficiency across the three stages, with the value creation stage identified as the weakest link. An analysis of the determinants suggests that universities with better faculty quality, experienced technology transfer offices, more affiliated investment funds, and a comprehensive rather than specialized focus perform better in all three stages.