Saturday, March 26, 2005

The Struggle to Control Technology Transfer to China

From Newsweek: To Stop a Tech Deal - Taiwan shows how hard it is to control sales to China.

"... China's rapid rise from a sweatshop economy to one built on high technology rests, in good part, on the strategy of acquiring the most advanced and sensitive technologies from eager foreign-investment partners. Governments the world over are struggling with ways to control technology transfer to China, without undermining their commercial interests. The record of Taiwan, one of the largest investors in China, shows how poorly those safeguard measures work in practice."

"Over the last decade, China's IT manufacturing base has grown from infancy to surpass Taiwan's in size; it's now the world's third largest. Its semiconductor foundries are considered only a generation or less behind Taiwan's—a gap measured in months, not years. All of China's top chipmakers are believed to have received technology, seed money or senior managers from across the Taiwan Strait."

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