Technology Transfer

My latest at the Diplomat takes a look at how some of China’s technology transfer policies are playing out:

China approached its aerospace industry with the idea that it would build an advanced, national champion sector by integrating as much foreign technology as possibly into its own research and production processes. Chinese policy mandates that domestic producers only engage with foreign firms when technology transfer agreements are present; Chinese firms cannot simply acquire off-the-shelf components. China’s relatively lax enforcement of IP protection has made many foreign producers leery of such arrangements, especially in the aerospace sector. Instead of working out technology transfer agreements, they simply refrain from collaborating with Chinese companies, which hampers the technological development of those companies.

The result has been grim. China has been slow to develop internationally competitive civilian aircraft, and has seen its trade deficit in the aerospace sector explode.