Policy

In the late 1980s, China's goals of modernization and rapid economic growth depended on the large-scale introduction of foreign technology. The task was to import technology to renovate and upgrade several thousand factories, mines, and power stations whose levels of productivity and energy efficiency were far below prevailing international standards. Since 1980 Chinese policy statements have stressed the need to improve existing facilities, to import technology rather than finished goods, and to renovate factories through selective purchase of key technology rather than through purchase of whole plants. This was an unprecedented problem, since China's previous experience with technology transfer, both in the massive Soviet technical-aid program of the 1950s and in the more modest purchases of fertilizer and petrochemical plants in the 1960s and early 1970s, featured large projects that brought in complete plants. In the 1980s much of the technology to be imported was production or process technology, representing better ways of producing items China already manufactured, such as truck transmissions or telephone cables. Such technology was usually the proprietary knowledge of foreign corporations, and China demonstrated an unprecedented willingness to cooperate with such firms. With the explicit aim of promoting technology imports, China made great efforts to attract foreign businesses and foreign capital and permitted joint ventures and even foreign-owned subsidiaries to operate in China.

China's economic planners gave priority in technology imports to electronics, telecommunications, electric-power generation and transmission, transportation equipment, and energy-saving devices. The degree of central control over technology imports fluctuated in the 1980s, reflecting changing foreign trade policies and foreign exchange balances, but the overall trend was toward devolution of decision making to those who use the technology or equipment. Bank loans and other means were made available to encourage end users to select appropriate technology.

Data as of July 1987