Emergence as a Global Economic Power } 697
emulation discussed above.^46 In 1984, China passed a patent law which was
elaborated and strengthened in 1992, 2004, and 2009. That law provided,
on paper in any case, for fairly strong protection of patents and other intel-
lectual property rights.^47 Second, once a technology was stolen and copied,
the foreign firm was likely to face a new competitor on both Chinese and
international markets. That Chinese firm was often able to offer a cheaper
price than the foreign competitor. The foreign firm therefore often looked
on closely held technological superiority as its core competitive advantage
against lower-cost Chinese imitators and competitors. Not infrequently,
this made foreign firms reluctant to transfer advanced and sensitive tech-
nology to China.
One method used by Beijing to overcome this foreign reluctance to
transfer advanced technology to China was to allow foreign firms access
to China’s domestic market in exchange for transfer of advanced tech-
nology. In their initial conception, China’s Special Economic Zones
were exclusively for export production. From the very beginning, some
foreign-branded and SEZ-produced goods “leaked” one way or another
into China’s domestic markets. As coastal cities were opened to foreign
investment in the mid-1980s, export mandates similar to the SEZs were
applied there as well. Foreign firms soon realized there was strong demand
within China for their high-quality, fashionable, and safe products, and
sought ways of gaining access to these domestic markets. Agreeing to
transfer of more advanced technology targeted by the MOST was one way
of gaining such access: market share for technology transfer. The Chinese
Academy of Science (CAS) was charged with following foreign technologi-
cal and scientific developments, and identifying items and processes that
should be acquired.
Targeted technologies that could not be acquired via commercial channels
were sometimes sought by illegal covert means: industrial espionage.^48 The
PRC, like most states, deployed clandestine operatives to foreign countries.
After 1991, Chinese espionage operations soon surpassed earlier efforts by the
Soviet Union. One of the distinctive features of Chinese foreign intelligence
operations was that they targeted advanced industrial and military technolo-
gies rather than the political and military information typically sought for-
merly by Soviet intelligence. In the decades after 1978, a dozen or so Chinese
spies were convicted by US courts for stealing for transfer to China various
sorts of advanced technologies. As the World Wide Web developed in the
1990s, and as US businesses and governmental agencies integrated that pow-
erful tool into their operations, Chinese intelligence agencies apparently dis-
covered and increasingly utilized this new method of penetration. Accessing
the research files of a major US corporation via the internet was, after all,
far easier, faster, cheaper, safer, and probably more effective than deploying
humans to undertake that task. Entities in China, which US governmental