| | | Mq, people forget that China entered the 2000s as a developing country. And they were doing what many other countries in similar stage of development had done before.
China was facing the same problems Brazil and Argentina and other Asian countries faced post World War 2:
Namely, open the market and attract huge Foreign Direct Investment then progressing up the technology value chain
(1) light industry,
(2) assembling and processing,
(3) expansion into heavy industry,
All countries can make up to Stage 3, after which is hard to progress: (Vietnam is, right now, at Stage 2 by the way)
(4) increases in local content, the employment of more technologically intensive processes and the investment in brand-name development,
Stage 4) is crucial to increase productivity. If they do not pass that, they are condemned to be Middle Income country
(5) top-shelf electronics, export of capital intensive goods and domestic market drives growth,
(6) world leader in the production of high-technology goods but not involved in indigenous innovation processes and
(7) innovators in technology and the knowledge economy.
If you look to the whole 7 stages, you can see that China has been in stage 4 for the last 8 years.
Their goal, after the FDI strategy did not prove enough to move up the scale beyond stage 3), is, obviously, to capture the value of the later stages but that cannot be dictated and directed by the party like the previous stages.
In January 2006, the Chinese government launched the “National Medium and Long-Term Program for Scientific and Technological Development” (MLP) (2006–20).
and here where the US has a problem with them. The Communist Party decided to move up the scale by decree
“By 2020, the nation’s gross expenditures on R&D are expected to rise to 2.5% or above of the gross domestic product (GDP)”
China must reduce its reliance on imported foreign technology by 30% and increase its indigenous innovation capacity by 60% or above, and be among the top five countries in the world for the filing of “indigenous” inventions and the frequency of citations in international journals and science papers.
China must also build seven worldclass research institutions and universities
China needs to develop capabilities in extreme complex technology fields but are faced with the following challenges
They may have many engineers but they lack experience.
Their companies need to be deeply embedded with the western counter parts to jointly develop new technologies.
This co-development environment is prevalent among western and japanese firms.
That requires trust. They cannot be trusted.
Here is where stealing technology enters
There are certainly many Chinese in the bureaucracy both in side the party and industry, who want to raise through the ranks by helping in the move up the scale.
And there is where stealing technology comes into play..
For the Chinese, 5G is not an end in itself. It is a mean to achieve a goal.
It will be the Trojan Horse for the Chinese to move up the scale.
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