April 25, 2005

JAPAN AGAIN:

Why China Has to Steal Technology (Judith Apter Klinghoffer, 4/25/05, History News Network)

All in all, it seems that at least in principle the Europeans have decided on a Helsinki agreement type linkage policy which helped end Communist Party monopoly of power in the USSR.

But is China vulnerable to such a linkage policy? The short answer is yes because Communist China, like its Soviet predecessor, has hit the innovation roadblock. In his 1968 essay directed to his country’s leadership, the premier Soviet nuclear scientist Andrei Sakharov warned “that a society that restricts intellectual freedom and prevents the free exchange of ideas would be unable to compete with societies that unleash the creative potential of their people.” He went on to compare the race between the US and the USSR to one between two cross country skiers traversing deep snow. If the dictatorships seem to be catching up fast, it is only because they follow in the tracks already smoothed out by democracies. Lack of freedom consigns “fear societies” to the role of followers, never leaders since “a fear society must parasitically feed off the resources of others to recharge its batteries.”

If Chinese military buildup is moving faster than some expected, it is because “European nations have been selling China hundreds of millions of dollars worth of dual use military equipment each year, but as long as the embargo is in force, explicitly military gear can only be sold under the table and smuggled in.” In “China’s Secret War,” Patrick Devenny, lays out the variety of ways, China goes about acquiring the technologies it needs but cannot produce.

The degree to which the continued existence of the Chinese totalitarian system depends on continued democratic aid comes into particularly sharp focus in the following Washington Post report: Web Censors In China Find Success:

Chinese authorities perform these tasks largely using U.S. hardware and software. For example, Cisco Systems Inc. routers, machines that move Internet traffic around, are capable of recognizing individual portions of data, a technology that helps battle worms and viruses. That same technology can be used to distinguish certain content.

Companies such as Cisco and Google Inc. have been accused of aiding China's censorship by tailoring their products to suit the government's needs. The study did not confirm those allegations, which the companies have denied.

According to the Economist, the Chinese problem even extends to the economic sphere as an article entitled “China's people problem” reveals: “The particular shortages mentioned most often are of creativity, of an aptitude for risk-taking and, above all, of an ability to manage—in everything from human resources and accounting to sales, distribution, branding and project-management.” Interestingly, just as the Soviet leadership was more aware of the problem than its Western counterparts, so is the Chinese leadership. Thus, Hu Jintau, general secretary of the Communist Party of China, identified “increasing the capabilities of innovation in science development” and rural development as the two central challenges facing China.

China is desperately hoping to find a way to institutionalize innovation which is based on risk taking without giving up significant control.


As the Japanese found, merely assembling stuff invented and designed by Americans isn't a recipe for long term economic success.

Posted by Orrin Judd at April 25, 2005 9:03 AM
Comments

Further your point except copying the Japanese, car blogs are full of entries like the one below:

http://www.autoblog.com/entry/1234000503040395/

Posted by: Rick T. at April 25, 2005 1:05 PM

Coulda fooled me. Their per capita output is about the same as ours.

Posted by: Harry Eagar at April 25, 2005 3:26 PM

Harryy:

I find it safe to always assume you're fooled:

Japan: $28k

US: $38K

Posted by: oj at April 25, 2005 3:46 PM

From the Penn World Tables, Japan per capita GDP looks to have peaked in '91 at about 88% of US, down to 74% by 2000 which is the last year available. The '90s just killed them. (Click on Real GDP per capita, constant prices, chain series then add the years & countries you want to compare.)

Posted by: joe shropshire at April 25, 2005 6:53 PM

Subtract resource extraction from both sides and those numbers get a lot closer

Posted by: Harry Eagar at April 27, 2005 4:39 PM
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