Doing Business in China

GE and the sharing of advanced jet technology

http://www.nytimes.com/2011/01/18/business/global/18plane.html

Meanwhile, Washington Post also has an interesting story on challenges faced by US firms doing business in China:

http://www.washingtonpost.com/wp-dyn/content/article/2011/01/17/AR2011011702588.html

An interesting take on the Renminbi undervaluation question:
http://www.nytimes.com/2011/01/18/opinion/18wu.html

My Take:

Interesting issues that need to be considered in the current news media frenzy regarding China’s attempts to “catch up” technologically with the advanced economies:

A. China can try to cajole companies to share technology by having US, German, Japanese, French and S. Korean companies compete against each other and try to bargain for the best offer. A good response from multinationals from advanced economies would be to not put so many eggs in the China basket. There are several other emerging markets that over time will offer huge benefits and strengthening these economies (especially India and Brazil) will create a counterweight to China.

B. China is taking an economically rational approach by trying to catch-up via technology transfer agreements. It makes very little sense to re-invent the wheel every time you need to make a bicycle.  

C. As far as I am aware, China did not sign any agreements that stated that it would be a low cost, low technology manufacturing based economy for the rest of history. Also, I am not sure that Boeing and Airbus have monopoly/duopoly rights for large commercial aircraft manufacturing for the rest of the 21^st century.

D. It is also worth noting the history of the rise of the US economy - not exactly a story of just pure creativity and domestic inventions (a great book to read on this topic - A Nation of Counterfeiters: Capitalists, Con Men, and the Making of the United States by Stephen Mihm)