China vs the World: Whose Technology Is It?

No longer content with being the world's factory for low-value products, China has quietly opened a new front in its campaign to become the globe's most powerful economy: It's on a quest for high-tech dominance. In pursuit of this goal, the Chinese government has ensured that it will be both buyer and seller in certain key industries by retaining ownership of customers and suppliers alike. It has consolidated manufacturers in those industries into a few national champions to generate economies of scale and concentrate learning. And it is co-opting, cajoling, and coercing multi-national corporations to part with their latest technologies, imposing regulations that put those companies in a terrible bind: They can either comply with the rules and share their technologies with would-be Chinese competitors or refuse and miss out on the world's fastest-growing market. Foreign companies doing business in China cannot wait for balancing macroeconomic forces or multilateral solutions; if they wish to survive as global technology leaders, they must bring greater imagination to bear on the problem. Above all, China's maneuvers cast into doubt the optimistic premise that engagement and interdependence with the West would cause capitalism and socialism to converge quickly, reducing international tensions. Storm clouds are gathering over China and the U.S. in particular. Can two economies with such radically different structures and objectives peacefully coexist? Most people expect that the systems will eventually become more similar. However, the authors argue, this will happen only when China becomes as rich-and as technologically advanced-as the U.S.

• International business
• Knowledge management
• Competitive strategy
• International relations
• Technology and analytics
• Joint ventures