Technology transfer to China:a study of strategy in 20 EU industrial companies

Foreign direct investment has been important in China's economic development since the early 1980s. In recent years, the volume of inward FDI into China, according to some estimates, has been second only to that into the USA. The Chinese government has emphasised the need for FDI to be coupled with the transfer of more advanced technologies to China. For foreign companies, technology transfer raises the risk of losing their technology based competitive advantage to potential competitor firms. This risk may be exacerbated by insufficient legal protection of intellectual property rights in China. After briefly reviewing the development of Chinese official policy on technology transfer, this paper considers the strategy adopted by EU companies regarding the transfer of technology; in particular in advanced technology sectors. The research on which the paper is based included an analysis of information gathered from 20 leading EU companies with investments in China and operating in high-technology sectors. Information was gathered from senior company managers based in both China and Europe during the second half of 1998. The main findings include a measure of reluctance on the part of EU companies to transfer their core technologies to China and to base R&D capability there. At the same time, the companies appear aware that this policy may be unsustainable in the longer-term in the face of Chinese official policy and a desire to expand their operations in China. While they attempt to protect their existing technological knowledge, most of them accept that there will be technology "leakage" and therefore the most effective strategy is to maintain their technological lead through R&D.

A longitudinal study of Chinese managerial behaviour:an inside view of decision-making under the economic reform

This research compared decision making processes in six Chinese state-owned enterprises during the period 1985 to 1988. The research objectives were: a) To examine changes in the managerial behaviour over a period of 1985 to 1988 with a focus on decision-making; b) Through this examination, to throw light on the means by which government policies on economic reform were implemented at the enterprise level; c) To illustrate problems encountered in the decentralization programme which was a major part of China's economic reform. The research was conducted by means of intensive interviews with more than eighty managers and a survey of documents relating to specific decisions. A total of sixty cases of decision-making were selected from five decision topics: purchasing of inputs, pricing of outputs, recruitment of labour, organizational change and innovation, which occurred in 1985 (or before) and in 1988/89. Data from the interviews were used to investigate environmental conditions, relations between the enterprise and its higher authority, interactions between management and the party system, the role of information, and effectiveness of regulations and government policies on enterprise management. The analysis of the data indicates that the decision processes in the different enterprises have some similarities in regard to actor involvement, the flow of decision activities, interactions with the authorities, information usage and the effect of regulations. Comparison of the same or similar decision contents over time indicates that the achievement of decentralization varied according to the topic of decision. Managerial authority was delegated to enterprises when the authorities relaxed their control over resource allocation. When acquisition of necessary resources is dependent upon the planning system or the decision matter is sensitive, because it involves change to the institutional framework (e.g. the Party), then a high degree of centralization was retained, resulting in a marginal change in managerial behaviour. The economic reform failed to increase decision efficiency and effectiveness of decision-making. The prevailing institutional frameworks were regarded as negative to the change. The research argues that the decision process is likely to be more contingent on the decision content than the organization. Three types of decision process have been conceptualized, each of them related to a certain type of decision content. This argument gives attention to the perspectives of institution and power in a way which facilitates an elaboration of organizational analysis. The problems encountered in the reform of China's industrial enterprises are identified and discussed. General recommendations for policies of further reform are offered, based on the analysis of decision process and managerial behaviour.

Does the Chinese banking system promote the growth of firms?

Using a large panel dataset of Chinese manufacturing enterprises during 1999-2005, which accounts for over 90% of China’s industrial output, and robust econometric procedures we show that the Chinese banking system has helped to support the growth of both firm value added and TFP. We find that access to bank loans is positively correlated with future value added and TFP growth. We also find that firms with access to bank loans tend to grow faster in regions with greater banking sector development. While the effects of bank loans on firm growth are more pronounced in the case of purely private-owned and foreign firms, they are positive and statistically significant even in the case of state-owned and collectively-owned firms. We show that excluding loss-making firms from the sample does not change the qualitative nature of our results.

China in Global Value Chains: Implications for Industrial Policy and Development

Rapid technological advances and liberal trade regimes permit functional reintegration of dispersed activities into new border-spanning business networks variously referred to as global value chains (GVCs). Given that the gains of a country from GVCs depend on the activities taking place in its jurisdiction and their linkages to global markets, this study starts by providing a descriptive overview of China’s economic structure and trade profile. The first two chapters of this paper demonstrate what significant role GVCs have played in China’s economic growth, evident in enhanced productivity, diversification, and sophistication of China’s exports, and how these economic benefits have propelled China’s emergence as the world’s manufacturing hub in the past two decades. However, benefits from GVC participation – in particular technological learning, knowledge building, and industrial upgrading – are not automatic. What strategies would help Chinese industries engage with GVCs in ways that are deemed sustainable in the long run? What challenges and related opportunities China would face throughout the implementation process? The last two chapters of this paper focus on implications of GVCs for China’s industrial policy and development. Chapter Three examines how China is reorienting its manufacturing sector toward the production of higher value-added goods and expanding its service sector, both domestically and internationally; while Chapter Four provides illustrative policy recommendations on dealing with the positive and negative outcomes triggered by GVCs, within China and beyond the country’s borders. To the end, this study also hopes to shed some light on the lessons and complexities that arise from GVC participation for other developing countries.

At the dawn of Italo-Chinese modern relations: Ludovico Nocentini's experience

In 1904 Ludovico Nocentini described China as a hub of colonial and commercial development for European powers. Europe in the Far East and the Italian Interests in China was Nocentini’s last and most critical book, in which he compared the performance of the Italian government with that of other countries and showed Rome’s inefficiency overseas. The book expatiated on the “carving up” of China into spheres of influence by the Western powers, while examining how the Italian government’s scant regard for the definition and pursuit of the country’s national interest jeopardized not only the development of its colonial policy, but also its foreign trade and industrial progress.

Chinese seafarers on foreign ships: Employment and welfare issues

Abstract not available