Emergence as a Global Economic Power } 701
and reduce dependency on foreign patents. Among other things, it required
that foreign holders of patents that did not “sufficiently exploit” them, they
would be ordered to license the technology to Chinese firms. The China-based
R&D centers of large foreign firms, previously mostly focused on modifying
foreign products to suit Chinese tastes, were offered incentives to participate
in major research projects targeted by the MLP.
Core infrastructure—banking, telecommunications, ports, utilities—were
directed as part of the MLP to use only indigenous technology. Government
agencies were to purchase indigenous technology. Catalogues were pub-
lished showing long lists of goods for which government agencies should
purchase only or primarily indigenous technology. Chinese firms were to
work with government agencies to develop indigenous technology standards
distinct from those developed by foreign firms. Japan had used this method
for decades to largely exclude foreign goods from Japan’s domestic markets,
thereby reserving those markets for Japanese firms. Firms recognized by PRC
government agencies as “innovative enterprises” were made eligible for soft
loans from China’s Export-Import Bank. Procedures were tightened for for-
eign firms to license goods for sale in Chinese markets. Foreign firms were
required to reveal encryption codes and technology, a move which made
theft of IPR easier. Anti-monopoly laws were increasingly applied against for-
eign firms that held strong positions in many Chinese markets. Sometimes
these cases could be resolved by agreement on technology transfers. Foreign
firms found themselves confronting all sorts of informal pressures to transfer
advanced technologies.
Foreign firms and governments objected to many of these policies and
pushed back against them. In some cases, policies were redrawn or implemen-
tation delayed, regarding government procurement, for example. Critics of
the MLP, including Chinese critics, maintained that bureaucratic direction of
research resulted in few real breakthroughs in innovation. Most of the results
of massive state funding were still copies or derivatives of Western technol-
ogy, critics said.^53 Other analysts doubted if China would be able to escape
the mid-level process innovation niche China has assumed so effectively and
fortuitously in the global economy.^54 Be that as it may, China’s government
set for the nation the objective of becoming a world leading technology inno-
vator by the middle of the twenty-first century. It developed long-term and
well-funded strategies to achieve that objective. And it drew widely on global
inputs to achieve that end.
Successes of China’s Technology Development Push
World Bank indicators provide a number of measures of China’s rela-
tive successes in accomplishing a technological revolution together with