Guy de Jonquieres of the Financial Times assails opinions of China as a technology powerhouse. Some of his comments:
[China] now has more researchers than Japan. Its annual research and development spending, though still well below US levels, is rising five times faster, while the OECD says China's biggest exports are now high-tech products... [But] the bulk of China's "high-tech" exports are actually low-margin commodity products such as personal computers and DVD players, assembled from imported components that account for most of their value...
[Weak intellectual property laws] provide no rewards for innovation. China's international patent applications, though growing, are still less than 1 per cent of the total filed in the US and Europe. And while start-up companies abound in China, they are poorly supported by its financial system. Its bigger banks favour lending to state-owned industries; venture capital is in its infancy, and the country's immature equity market fails to offer the dependable exit route demanded by sophisticated early-stage investors.
I think Mr de Jonquieres's focus on the current economic impact of high-tech research in China is a little too restrictive. China isn't a powerhouse of technological innovation today measured by exports, revenues or patent filings. However, I am aware of areas and applications where Chinese scientists and entrepreneurs are at the cutting edge. (Shameless plug: see www.inseadinnovasia.com for some examples.)
Also, economic impact from technology arises as a consequence of having a pipeline of research thrusts. I believe China does have a pipeline of technologies that will be commercialised over the years to come.
Furthermore, comparisons between China and the US/Europe are not easily made. The very metrics used may not be relevant (comparing dollar Chinese revenues to dollar American revenues) because some Chinese products will no doubt be meant for the local market. Also, some Chinese technologies doubtless find their way into Western products. This phenomenon will only grow over time. Revenues from these products accrue to the US/European entities. Only a small proportion would be attributed to China.
So is China a high-tech colossus today measured by GdJ's criteria? No.
Is it a high-tech power today based on technological output. Maybe. Sort of. In some areas.
Will it be a high-tech giant in the future? Yes.
Link: FT.com / Comment & analysis / Columnists - Guy de Jonquieres: The China high-tech myth.
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