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reverse-engineered, often with Soviet assistance; copied, often with simpli-
fications; and then mass-produced in China’s machine building factories
and distributed across vast swaths of the economy via the central planning
process. Whatever indigenous innovation occurred under comprehensive
economic planning was top-down, driven by the design bureaus of various
ministries and the planning organs that approved or rejected the proposals of
those bureaus for incorporation into the plan. Enterprise managers, not fac-
ing competition from more efficient firms and with costs covered by planned
allocations, had little incentive to innovate. Innovation was the job of higher
levels in Beijing. Seeking and trying out new technologies could be dangerous
for a manager whose job was to meet targets specified by higher-level plan-
ners. The incentives for managers in a planned economy were to scrupulously
meet plan targets, not to take risks by trying out new innovations. Moreover,
the technical experts who might have led the innovation process were politi-
cally suspect. The consequence of all this was industrialization without much
subsequent innovation. Once a set of machinery or technology was put into
use, it typically continued in use unchanged for decades.
This was brought home to me in the mid-1990s when I led a group of
Georgia Institute of Technology students on a tour of the First Automobile
Works (FAW) in Changchun, Jilin province. FAW was China’s first large-scale
automobile and truck factory, set up with Soviet assistance in the early 1950s.
As it turned out, the factory we visited was still producing trucks based on
designs supplied by the Soviet Union in the early 1950s. Those Soviet designs
had, in turn, been based on General Motor’s designs of the late 1930s. This
meant that in the mid-1990s China’s leading truck manufacturer was still
producing vehicles with the power, mileage, braking, controls, and pollution
standards of the late 1930s. In advanced capitalist countries, there was an im-
mense difference between automotive technology of the late 1930s and the
mid-1990s, with the latter vastly superior in all performance categories. The
FAW in the 1990s was, in effect, producing obsolete vehicles in an extremely
inefficient manner and foisting its inferior product on end users by govern-
ment fiat and protectionism.
While the PRC during the Maoist era was isolating itself from the out-
side world and persecuting its engineers as bourgeois elements, the advanced
capitalist countries were in the midst of a profound technological revolution.
Microelectronic science, engineering, and manufacturing had matured ade-
quately to allow integrated circuits (IC) built on silicon chips to be manu-
factured cheaply and reliably. IC chips were being integrated into a growing
array of devices from automobiles to telecommunications to manufactur-
ing to home appliances. Whole new industries were arising to produce IC
chips and the devices that used them: computers, microwaves, laser opti-
cal devices such as printers, fax machines, video recorders, satellite televi-
sion and telephones, sensing and imaging, and much more. The advanced