Technology Transfer to China During the 1980s-How Effective? Some Evidence from Jiangsu

Abstract

DURING THE 1980s, in a major change from past practices, China adopted the so-called Policy (kaifangzhengce), the essence of which was a quest for accelerated economic development through the import and absorption of foreign technology. Because the nature of technology is difficult to define, technology import is not something that lends itself easily to measurement. For one thing, technology appears in different forms embodied in capital goods, codified or documented as formulas and blueprints, or stored as tacit knowledge in the memories of individuals. Nor do countries monitor all the channels used to transfer technology.' Consequently, reliable aggregate technology import statistics do not exist. However, crude measures are available, and perhaps the one most commonly used is the import of machinery and transport equipment. If this measure is adopted as a proxy for technology import, the evidence suggests that China imported huge quantities of technology during the 1980s. Machinery and transport equipment import increased from U.S. $2.03 billion in 1978 to an annual average of U.S. $5.08 during 1980-84 and an annual average of U.S. $16.51 during 1985-89. Between 1980 and 1989, roughly one-third of China's rapidly expanding import (or about U.S. $116 billion for the decade) consisted of machinery, transport equipment, testing instruments and apparatus, and photo and optical equipment.2 Not only did China significantly increase its pace of technology imports, it also greatly diversified the institutional mechanisms used to acquire technology. During the 1960s and the 1970s, before the era of the Open Policy, the primary method used to acquire foreign technology was arms-length