In 1990 I visited Shenzen, China, which just a decade earlier had been a small farming village of 10,000 people but had been designated a “special economic zone” that quickly reached a population of over 1 million as workers poured in from the countryside to work in new factories.
A team of two dozen GE engineers who built GE’s TV Cathode Ray Tube plant in Syracuse, New York and worked in it for three decades spent two years in Shenzen rebuilding the factory.
I was privy to accounts of the negotiations between the Chinese and GE engineers and the question of “technology transfer” came up quite often. The story was that Japanese, with many operations in China at the time, never transferred all of the technology the Chinese were buying; they would keep the most important proprietary information secret. The Americans, on the other hand, and as a general rule, were more generous with the amount of technology transferred in a typical project.
Same Old, Same Old: Technology Transfer Today
Not much has changed since the 1990’s. By way of example, recently, Boeing Technology, in an effort to win a contract for its 737 and other aircraft equipment with Brazil is believed to have given away technology secrets that threaten to leak to the Chinese, who will use the information in the production of their C919 plane. The C919 will be built at a 20% discount to Boeing’s price and so the long term implications of this type of deal are controversial.
Chinese Using Leverage To Get Information
It has been a game of cat and mouse or the “chicken and the egg” as regards negotiations with the Chinese over technology transfer. With China’s new economic power and hands controlling not a few purse strings, they are becoming more insistent that technical specifications and proprietary know-how be provided in exchange for the use of factories and labor.
