Beijing's tech policy is changing. Is China a safer partner now?
Business Management

Beijing's tech policy is changing. Is China a safer partner now?

These are interesting times for the tech sector both inside and outside China. The US is seeking to prevent its technology being transferred to Chinese companies, even as China moves to develop its own R&D. Meanwhile the Western data giants, increasingly under scrutiny, suggest that Chinese competitors would be a greater problem than they are.

In the English-speaking world, it is often said that there is an ancient Chinese curse which runs: "may you live in interesting times". The global tech industry today is certainly passing through interesting times, particularly as regards its relationship with China. The apocryphal "Chinese curse" is perhaps illustrative of that relationship in some ways, as there is no evidence of it in Chinese culture: it appears to have been an idea originated entirely in the West. In many ways the West continues to understand China poorly.

At the moment, among those in the business community interested in China, all eyes tend to be focused on the comparatively recent trade war instigated under the Trump administration. This has certainly seen its fireworks, and there will probably be more, but in the tech sector the tensions between China and the West have been playing out over a much longer span of time.

Quite apart from tariffs and other causes of dispute, one of these long-running tensions is centred on Beijing's "Made in China 2025" policy. This was actually devised by Deng Xiaoping long ago in the 1980s, and it states that foreign companies wishing to enter the Chinese market in designated strategic sectors must form joint ventures with Chinese state-owned partners and share their technology with them. This is explicitly referred to in China as "trade technology for market".

Such compulsory transfers of intellectual property are one of America's prime grievances in the current dispute, and could be a major problem for any foreign technology enterprise, American or not, which would like to do business in the People's Republic. The possibility is there that instead of gaining access to a vast new market, foreign entrants would simply incubate competitors which would firstly take up prospective Chinese customers and then spread out to become dangerous opposition all around the world.

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Lewis Page

Lewis Page has been writing about technology across various industry sectors since the early noughties. He has a degree in engineering and is based in London.

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