China's Technological Ambitions Take Flight

[Dave Farber <dave () farber net>]

> Delivered-To: dfarber+ () ux13 sp cs cmu edu
> Date: Sun, 19 Oct 2003 16:39:21 -0300
> From: Claudio Gutierrez <cgutierrez () improvement cl>
> Subject: China's Technological Ambitions Take Flight
> To: dave () farber net
>
>
> by James Flanigan, LA Times
>
> Everyone knows China is a low-wage, low-cost manufacturing juggernaut.
> But the world had better watch out: It is also on its way to becoming a
> high-tech behemoth.
>
> That was underscored last week when China sent a man into space. At the
> same time, to much less fanfare, Chinese doctors made their own leap,
> taking the nucleus of an ovary from one woman and implanting it in the
> ovary of another, allowing her possibly to conceive a child. And such
> achievements are becoming increasingly common.
>
> "China is going to be a technological powerhouse," says Paul Saffo,
> director of the Institute for the Future in Menlo Park, Calif. "They are
> being very strategic — making sure that they gain technological
> knowledge as part of their manufacturing activities."
>
> China's technological drive may come as a surprise to those accustomed
> to viewing it as simply a low-wage workshop, exporting shoes and
> T-shirts and all sorts of paraphernalia and roiling other economies in
> the process. But manufacturing is only one stage in China's economic
> development. In fact, what's most significant about China today is not
> the growth of its assembly lines but that of its graduating classes.
>
> Rob Koepp, a scholar at the Milken Institute in Santa Monica, points out
> a statistic. "China graduates 450,000 engineers each year — as many as
> the United States." He adds that the country's aim isn't "merely to
> catch up with the West" but to "bring about fundamentally innovative
> technology over time" that will set standards for the whole world.
>
> In many ways, China's technological ambitions can't help but influence
> global industry. For example, it is deploying an extremely advanced
> system for cellular telephones, called third generation. And because
> there are 200 million Chinese cellphone users, more than any other
> country, China's system inevitably will be become a leading global
> standard.
>
> In software, China is pushing for a new standard that would allow the
> Internet to accommodate more users. China's software industry is still
> relatively small — less than one-third the size of India's — but it's
> growing exponentially, like so much else there. So if it starts using an
> advanced Internet protocol, the rest of the world could be forced to
> adopt it too.
>
> It's true that in telecommunications, space flight, biomedicine and
> elsewhere, China is largely building on innovations that originated in
> the U.S. and other countries. And China's total research spending right
> now is less than 1% of its annual gross domestic product of $1.4
> trillion.
>
> But that GDP is growing at an annual rate of 8%. Research and
> development spending is expanding. Beijing is setting up high-tech
> centers around the country to come up with the next big thing in
> electronics, biotechnology and nanotechnology. The Ministry of Science
> and Industry has hired Koepp of the Milken Institute to advise it on how
> Silicon Valley and other centers of high-tech development came about in
> this country.
>
> Even now, in technology, China poses "a competitiveness challenge," says
> Dwight W. Decker, chairman and chief executive of Conexant Systems Inc.
> in Newport Beach, a maker of semiconductor chip sets.
>
> Just this month, Conexant entered an agreement with Huawei Technologies
> Inc. of Shenzhen, China, which makes network switches and routers for
> Internet traffic. Huawei, a huge $2.4-billion firm, will use Conexant's
> chip sets to allow giant China Telecom to give its customers broadband
> Internet connections.
>
> Conexant won the contract because of the excellence of its technology.
> But Decker has no illusions. He knows his researchers and chip designers
> will have to work hard to develop the next technological wrinkle in chip
> sets, and the next after that, to stay in the game — because China is
> trying to develop original chip-set software.
>
> "They want to be a leader, in software, in wireless technology, in TV,"
> Decker says, and the list goes on.
>
> Andrew S. Grove, the chairman of Intel Corp., warned in a recent speech
> that America was risking its lead in technology and its living
> standards, because research and development funding was declining here
> and "university enrollment in science and engineering has been trending
> downward over the last decade."
>
> Meanwhile, China is a country coming alive. Shoucheng Zhang, a physics
> professor at Stanford University who also teaches at Tsing-hua
> University in Beijing, can't help but notice it when he returns to his
> native land. "I love to see the young people changing the world, hanging
> China," he says.
>
> Zhang knows that to develop truly original technology, China's Communist
> government must have the "political will" to protect intellectual
> property as the West does, with patent and copyright laws. And he
> believes such change is inevitable.
>
> So does Koepp, who sees many forces for change, including what he calls
> the "reverse brain drain." It used to be that three-fourths of Chinese
> students who came to the U.S. for their PhDs and other degrees ended up
> staying here to work. Now, Koepp notes, the figures "are reversed, and
> 75% go back to China because they see opportunity — and even fewer
> restrictions."
>
> "I know a biotech researcher who has returned to Shanghai because she
> can work with stem cells there while she would be restricted here," he
> says. Likewise, Europe's bans on working with genetic crop materials are
> driving Chinese students home from that continent.
>
> We should be clear. China's pursuit of technology and innovation is a
> potential boon for the world.
>
> And if along the way China gives the U.S. a new competitive shock, well,
> that might not be a bad thing. It could be the wake-up call we need to
> remind us we want to remain the New York Yankees of world technology and
> not become its Boston Red Sox.
>
> http://www.latimes.com/technology/la-fi-flan19oct19,1,976109.column?coll=la-headlines-technology

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