中国经济奇迹背后的缺陷

日期：2005-08-15 23:37:09|0000-00-00 00:00:00　来源：no　作者：乔治·吉尔博伊

<编按：美国《外交》杂志2004年7 8月号发表了乔治．Ｊ．吉尔博伊撰写的《中国奇迹背后的迷思》一文，文章集中考察和分析了最近十年（1993 2003年）中国经济发展背后的一些缺陷和不足，并认为美国执行对华“战略性接触“的政策符合美国的最终利益。虽然该文的目的是为了给美国政府出谋划策，但我们也可以从中获得某些启示。文章主要内容如下。> 中国作为一个全球贸易大国的突然崛起所引起的反响是奇特的，掺杂着敬佩与担忧。对中国经济发展繁荣前景的非理性热情促使投资者们急冲冲地去购买中国企业的股权，而很少知道这些企业究竟是怎样运作的。与些同时，对中国成就和潜力的过高估计又助长了种种担忧，说中国必将打破全球贸易和科技力量的平衡，最终会在经济、科技和军事上成为美国的威胁。这些反应都是错误的：它们忽视了中国经济奇迹背后的缺陷，也忽视了美国从中国参与全球经济的特殊方式上所获得的战略利益。 实际上，中美两国正在发展着美国战略长期以来梦寐以求的那种经济关系。中国正在参与美国半个多世纪以来一直在努力建立的自由而又有规则的全球经济体系。但是经济市场化的过程导致了两大没有预料到的严重后果。首先，中国政府实行的经济改革非常有利于国有企业，给予它各种优惠和便利政策以获取资金、技术和进入市场。改革也有利于外国投资者，导致外国公司在中国工业出口中占有巨大份额，在中国国内市场也得了有利的位置。结果是，中国工业领域充斥的是低效但又仍然庞大的国有企业、日益占据优势地位的外企以及无力在同等条件下与这两者竞争的民营企业。 其次，中国现存政治体制下固有的商业风险导致在中国的经理人当中衍生出了一种“企业战略文化”，这种文化鼓励他们追求短期利益、地域分割以及经营的过度多元化；多数中国企业都侧重于发展与中共官僚体系中各级官员们的私人关系以谋取特权，而不是在企业之间建立起横向网络联结，也不在技术发展和推广方面进行长远投资。中国企业依然严重依赖国外的技术和关键性元件，这些严重制约了它为单方面利益而支配其科技和贸易力量的能力。克服这些弱点的最好希望在于中国对其相关体制进行改革。而美国的政策也不应沦为短视的贸易保护主义，这样会损害目前两国关系发展的有利趋势，而应该采取一种“战略性接触”的政策。 一、 最近有关中美贸易的争论忽略了以下事实，即与中国的经贸关系大体上是有利于美国的。自1978年中国改革开放以来，从中国进口廉价的产品为美国消费者节省了大约1000亿美元。美国的波音、福特、摩托罗拉等企业通过从中国这样成本更低的国家购买零部件，每年也可以节省数亿美元的生产成本，从而提高了它们的全球竞争力，也有利于它们在本国开发新的高附加值产品。 中国不仅仅是一个出中国，它的进口额在东北亚地区也是最大的。中国用于国内消费的进口额从20世纪90年代中期的的400亿美元上升到2003年的1870亿美元。如果不考虑进口加工再出口贸易，中国在2003年有50亿美元的贸易赤字。在电子和制造业等高科技领域，中国10年来每年的贸易赤字平均数是120亿美元。与日、韩等美国在亚洲的其他贸易伙伴不同，中国对美国产品和投资是敞开大门的。虽然近几年美国对华出口不太景气，但是在过去的10年内美国对华出口额增加了3倍，仅在去年一年内就增长了28%（同年美国出口总额仅增长5%）。特别是，中国是美国高科技产品的一个主要市场。 中国允许外国公司投资于中国的国内市场，其规模之大在亚洲是前所未有的。自1978年以来，中国吸收了5000亿美元的外国直接投资，是日本于1945-2000年间吸收外国直接投资总额的10倍。由于其对外国直接投资的开放，中国不能像日韩在经济高速发展时期所做的那样，保护本国市场使之只面向本国企业。相反，中国允许包括美国公司在内的外企为它们的产品和服务在中国开拓新的市场，特别是在诸如飞机、软件、工业设计、机械设备、半岛体和集成电路等产品附加值比较高的领域。 由于经济开放和需要大量进口，中国可以在全球贸易与金融等多个领域成为美国的盟友。而且，中国已经表现了按世贸组织规则行事的意愿。中国现在是建立区域贸易和投资机制的倡导者，包括与东盟建立自由贸易区，以及与澳大利亚签订双边自由贸易协定。 外贸和经济发展已经促使中国在商业法规方面作了改进，注意更多地征求消费者的意见，逐渐减少官僚作风以及遵守有关安全和环保的国际标准。 二、 尽管如此，美国政界和商界的领导人还是担心，中国在世界出口贸易比重的日益增长，将预示着东北亚地区另一个经济超级大国的崛起。然而这些担心是没有根据的，这有以下三个原因。第一，中国的高科技和工业产品的出口是由外国公司而不是中国企业在主导。第二，中国企业严重依赖从美国和其他工业发达国家进口的设计、关键性元件以及生产设备等。第三，中国企业几乎没有采取有效措施去吸收消化和推广它们进口的技术，从而使得它们不可能迅速成为全球工业中的有力竞争者。 我们通过仔细观察中国的出口状况 以生产企业类型为标准 来对中国的经济增长作一个透视。去年，外资企业占中国出口总额的55%。从这个角度看，中国不同于那些具有代表性的亚洲国家和地区的成功经验。在20世纪70年代中期，外资企业只占台湾制造业出口的20%；在1974-1978年间的韩国，外资企业只占其制造业出口的25%；在泰国，外资企业的出口份额从20世纪70年代的18%下降到20世纪80年代中国期的6%。 在中国，外资企业在高科技工业产品的出口方面占的主导优势更加明显。尽管在过去的10年内，中国机械工业的出口额增长了20倍（去年为830亿美元），但外资企业在其中所占的比重从35%上升到79%；电脑设备的出口额从1993年的7.16亿美元上升到2003年的410亿美元，外资企业在其中所占的比重从73%上升到92%；电子和电信产品的出口额增加了7倍（2003年为890亿美元），其中外资企业的比重从45%上升到74%。这种情形几乎存在于中国所有的高科技工业部门。 数据统计还显示出另外一种趋势，即中国对国外投资的依赖日益加深，以及外资企业和中国本国企业之间的差距日益扩大。1990年以来，中国允许另外一种外国直接投资模式出现：即从中外合资转向外国独资。现在，外商独资企业占在中国的外国直接投资总额的65%，而且它们主导了中国高科技产品的出口。与合资企业相比，独资企业更不愿意向中国企业转让技术，而且独资企业也没有像外资企业那样受合同约束而必须与中国合作者分享技术。为了占据中国市场的更大份额，它们极力对自己的技术保密。 三、 中国企业落后于外资企业的一个关键原因是它们没有在科学技术发展方面作长期投资。开发技术是一个困难而又不确定的过程。大量的资金投入或者现有的科技力量的集聚都不一定能确保成功。为了开发商业上可行的产品和服务，企业必须获取新知识、了解把握市场动向、对变化多端的消费需求迅速作出反应。那些与科研机构、金融家、股东、供应商以及客户保持紧密联系的企业在获取、转化新技术以及将其商业化方面就享有优势。那种水平的网络联结是获取知识、资本、产品和人才的基本渠道。 然而，中国现有的某些体制却抑制了中国企业间的横向网络联结，相反强化垂直联系。尽管市场改革已经给中国经济带来了新的规则，在没有制衡机制以及直接监督的前提下，中共官员在界定和实施那些规则方面还有广泛的决定权。特别是在地方上，政府能够，而且经常为了追求特定的地方利益而操纵经济政策。这样常常导致全国工业企业的地区分割以及重复投资带来的学浪费。 为了应对这些不确定性，在过去的20年里，中国企业发展出了一种了特殊的企业战略文化。首先，针对政府的特殊政策，中国企业往往注重从政府官员那儿获得特殊待遇：即进入市场或取得资源的特殊渠道，免受一些规则的制约以及一些官员的盘剥。其次为了特殊利益最大化，以及为了避免与别的企业及其背后支持者纠缠不清，许多中国企业之间不愿意进行合作，特别是跨地区或跨行政区域的合作。再次，它们往往置短期收益于长远投资之上，最后，中国企业为了减轻同行之间的价格竞争（这是由过剩的生产能力和重复投资造成的）带来的损失而倾向于生产和经营的过度多样化。 四、 考虑到中国目前的政治结构和商业环境，上述企业战略文化是合理而实用的。但是，这种文化削弱了中国企业的竞争力，还有可能损害中国经济，使其走下坡路。大多数中国企业注重短期收益，而不去提高开发新技术的能力。十多年来，它们用于研发方面的投入还不到其销售总额的1%。 注重短期收益也影响了中国企业对技术的进口。中国企业倾向于通过购买国外的生产设备来引进技术，通常是购买诸如装配线这样的整套设备。在整个20世纪80、90年代，硬件设施占中国技术进口的80%以上，而用于获得专利使用权许可、售后服务以及咨询方面的费用则分别只占9%、5%、和3%。 虽然中国近几年来开始引进“软技术” 主要是用于购买专利以利用好进口的设备，但含在这些设备里面的知识技术必须先消化、吸收和掌握（即技术“本土化”），而后才能为国内创新打下坚实有效的基础。中国企业在这方面的能力还是比较薄弱的。中国大中型企业在技术本土化方面的资金投入还不到其进口设备总开支的10%。中国企业的这种情形也与上世纪70、80年代的日本、韩国在追赶西方发达国家时的支出模式不同。这些国家的企业往往用两倍或者三倍于购买设备的钱来吸收包含在设备中的技术并使其本土化。 中国企业在国内也没有发展出强有力的技术供应网络。2002年，中国企业用于购买国内技术的开支还不到其科技方面总预算（包括进口技术、维修现有设备以及用于研发方面的开支）的1%。 企业间的合作和横向网络联络也很稀缺，使得中国企业在相对孤立的情况下进行研发。2000年的一次全国性的研发调查统计显示，在中国企业总共27亿美元的研发费用中，93%用于企业内部的支出，只有2%用于与大学的合作项目，与国内其他企业的合作费用还不到1%。这些研究所的任务本来是推广技术，为企业服务的。但现在的情况是，很多研究所正在成为企业的竞争对手。2003年世界银行的一份报告指出，中国很多科研机构为了自身的经济利益，已经把很多研究成果用于大规模生产和销售，而不是通过专利技术去推广这些技术。 考虑到挑战竞争对手及其地方保护者所要承担的政治风险，很少有中国企业在别的省份进行投资或与别的省份的企业进行联合。强烈的地方政治背景使一个地区的经济与其他地区的经济割裂开来，这有助于解释为什么中国企业往往规模比较小以及整个国家的工业企业是分割的。受地方保护主义危害最大的行业是制药业、机电、电子和运输业。其中，国企和民营企业受害最深，外资企业受害最小。 为了获得短期收益而又要避免发展区域间产品供应链所导致的困难，中国企业往往走过度多样化经营之路，其结果对企业本身也是破坏性的。很多中国最著名的企业在转向经营一些辅助性商业方面都是不成功的。 总之，中国的相关体制以及地方企业的企业战略选择都制约了中国企业开发新产品和新服务的能力。在整个20世纪90年代，新产品在中国企业销售总额中所占的比重比较低，大概为10%。这一比重在经合组织国家的工业企业中占到场35%- 40%。在这方面，中国甚至还落后于一些发展中国家。由于重复投资、区域分割以及企业间的联系松散，甚至那些开发出新产品的中国企业也经常发现自身正处于恶性的价格竞争中，这使得它们不能从它们的技术创新当中获取高额回报。 因此，与其把中国视为亚洲又一个经济和科技上的“巨人”，不如把它视为一个正在出现的“正常”的工业强国，就像巴西和印度一样。由于政治文化和工业企业文化的相互影响，21世纪中国的科技和经济图景就像是一个无网络节点似的图案 有一些在科技方面比较成功的企业作为点缀。中国要成为科技和经济的超级大国，首先要在国内打好一个制度方面的基础。如果不对相关体制加以改革，中国吸收、发展和推广科技的能力仍将受到限制。大多数中国企业仍将在全球工业生产链条的低级环节上为了微薄的利润而相互竞争。 五、 考虑到中国威胁全球经济平衡的潜力所受到的各种制约，美国应该抵制各种保护主义政策。相反，在认识到中国工业发展进程所带来的机遇和挑战的情况下，美国应该采取一种与中国战略性接触的政策。该政策的目的是，在维护美国科技、经济和政治的领导权的同时，帮助中国变得更加繁荣稳定，并使之融入到全球经济体系中去。但美国必须接受以下事实，中国是一个正在发展的国家，它不可能在所有方面都符合发达国家制定的共同标准。 维持这种战略性接触有助于巩固和加强美国从现存中美关系中所获得的收益，确保中国持续繁荣稳定，以及鼓励中国按全球贸易规则行事。 中国要成为一个科技和经济大国所面临的一个困境是，在中国释放使其成为一个全球有力的竞争者的潜力以前，中国必须实行相关的体制改革而不是简单地使市场更加自由开放，或者吸引更多的投资。而中国的体制改革从长远来说有利于中美双方。 （美）麻省理工学院国际问题研究中心 乔治·吉尔博伊 北京大学国际关系学院 曾爱平 摘译 --------------------- The Myth Behind China‘s Miracle; George J. Gilboy. Foreign Affairs. New York: Jul/Aug 2004.Vol.83, Iss. 4; pg. 33 Abstract (Document Summary) Overestimates of China‘s achievements and potential are fueling fears that the country will inevitably tilt global trade and technology balances in its favor, ultimately becoming an economic, technological, and military threat to the United States. These reactions, however, are equally mistaken: they overlook both important weaknesses in China‘s economic miracle and the strategic benefits the United States is reaping from the particular way in which China has joined the global economy. Such misjudgments could drive Washington to adopt protectionist policies that would reverse recent improvements in US-China relations, further alienate Washington from its allies, and diminish US influence in Asia. Full Text (4940 words) (Copyright by the Council on Foreign Relations, Inc. All rights reserved.) George J. Gilboy the phantom menace China‘s sudden rise as a global trading power has been greeted with a curious mixture of both admiration and fear. Irrational exuberance about the country‘s economic future has prompted investors to gobble up shares of Chinese firms with little understanding of how these companies actually operate. Meanwhile, overestimates of China‘s achievements and potential are fueling fears that the country will inevitably tilt global trade and technology balances in its favor, ultimately becoming an economic, technological, and military threat to the United States. These reactions, however, are equally mistaken: they overlook both important weaknesses in China‘s economic “miracle“ and the strategic benefits the United States is reaping from the particular way in which China has joined the global economy. Such misjudgments could drive Washington to adopt protectionist policies that would reverse recent improvements in U.S.-China relations, further alienate Washington from its allies, and diminish U.S. influence in Asia. In fact, the United States and China are developing precisely the type of economic relationship that U.S. strategy has long sought to create. China now has a stake in the liberal, rules-based global economic system that the United States worked to establish over the past half-century. Beijing has opened its economy to foreign direct investment (fdi), welcomed large-scale imports, and joined the World Trade Organization (WTO), spurring prosperity and liberalization within China and across the region. China‘s own choices along the road to global economic integration have reinforced trends that favor the continued industrial and technological preeminence of the United States and other advanced industrialized democracies. In its forced march to the market, Beijing has let political and social reforms lag behind, with at least two critical -- and unexpected -- consequences. First, to forestall the rise of a politically independent private sector, the Chinese government has implemented economic reforms that strongly favor state-owned enterprises (soes), granting them preferential access to capital, technology, and markets. But reforms have also favored foreign investment, which has allowed foreign firms to claim the lion‘s share of China‘s industrial exports and secure strong positions in its domestic markets. As a result, Chinese industry is left with inefficient but still-powerful soes, increasingly dominant foreign firms, and a private sector as yet unable to compete with either on equal terms. Second, the business risks inherent in China‘s unreformed political system have bred a response among many Chinese managers -- an “industrial strategic culture“ -- that encourages them to seek short-term profits, local autonomy, and excessive diversification. With a few exceptions, Chinese firms focus on developing privileged relations with officials in the Chinese Communist Party (ccp) hierarchy, spurn horizontal association and broad networking with each other, and forgo investment in long-term technology development and diffusion. Chinese firms continue to rely heavily on imported foreign technology and components -- severely limiting the country‘s ability to wield technological or trading power for unilateral gains. China, in other words, has joined the global economy on terms that reinforce its dependence on foreign technology and investment and restrict its ability to become an industrial and technological threat to advanced industrialized democracies. China‘s best hope for overcoming its technological and economic weaknesses lies in a renewed focus on domestic political reform. Thus, rather than lapse into shortsighted trade protectionism that could undermine current favorable trends, Washington should pursue a policy of “strategic engagement.“ Not simply engagement for its own sake, strategic engagement would explicitly acknowledge the advantages of U.S. technological, economic, and military leadership and seek to reinforce them, in exchange for increased prosperity and more security for China -- the more so now that China has a compelling economic interest in domestic political reform. open and opening Recent debates about U.S-China trade overlook the fact that the U.S. economic relationship with China is largely favorable and that it is conducted largely on U.S. terms. In particular, the focus on China‘s currency as a source of unfair trade advantage is misplaced, as economists Jonathan Anderson of ubs and Nicholas Lardy and Morris Goldstein of the Institute for International Economics have shown. Even a moderate appreciation of the yuan would make little difference to most U.S. firms and workers. Meanwhile, the currency issue obscures the significant economic and strategic benefits the United States now enjoys in its relations with China. According to Morgan Stanley, low-cost Chinese imports (mainly textiles, shoes, toys, and household goods) have saved U.S. consumers (mostly middle- and low-income families) about $100 billion dollars since China‘s reforms began in 1978. (Cheaper baby clothes from China helped U.S. families with children save about $400 million between 1998 and 2003.) U.S. industrial firms such as Boeing, Ford, General Motors, ibm, Intel, and Motorola also save hundreds of millions of dollars each year by buying parts from lower-cost countries such as China, increasing their global competitiveness and allowing them to undertake new high-value activities in the United States. In an effort to save 30 percent on its total global sourcing costs, Ford imported about $500 million in parts from China last year. General Motors has cut the cost of car radios by 40 percent by building them from Chinese parts. And although global sourcing can cause painful employment adjustments, the process can also benefit U.S. workers and companies. A recent independent study sponsored by the Information Technology Association of America found that outsourcing to countries such as China and India created a net 90,000 new U.S. jobs in information technology in 2003 and estimated that outsourcing will create a net 317,000 new U.S. jobs by 2008. China is not just an exporter; it imports more than any other state in northeastern Asia. Although it had a $124 billion trade surplus with the United States in 2003, it had significant trade deficits with many other countries: $15 billion with Japan, $23 billion with South Korea, $40 billion with Taiwan, and $16 billion with the members of the Association of Southeast Asian Nations (asean). Most significantly, China is a large and growing market for domestically consumed imports (ordinary trade that excludes imported goods that are processed and reexported). Chinese imports for domestic consumption rose to $187 billion in 2003, from $40 billion in the mid-1990s. Discounting the processing and reexport trade, China ran a $5 billion trade deficit in 2003, compared to a $20 billion surplus just five years earlier. In industries it classifies as “high tech,“ including electronic goods, components, and manufacturing equipment, China has averaged a $12 billion annual deficit for the last decade. Unlike other U.S. trading partners in Asia, such as Japan and South Korea, which spurned U.S. imports and investment for decades, China is also a large, open market for U.S. products. Although total U.S. exports have stagnated in recent years, U.S. exports to China have tripled in the last decade. They increased by 28 percent last year alone (whereas overall U.S. exports went up by only 5 percent). In particular, China has become a staple market for advanced U.S. technology products. According to U.S. government data, U.S. aerospace exports to China were valued at more than $2 billion in 2003 -- about 5 percent of total U.S. aerospace exports and nearly as much as comparable exports to Germany. U.S. firms exported $500 million of advanced manufacturing equipment to China in 2003, more than they exported to France. And U.S. chip makers exported $2.4 billion of semiconductors to China in 2003, the same amount they exported to Japan. Furthermore, China allows foreign firms to invest in its domestic market on a scale unprecedented in Asia. Since it launched reforms in 1978, China has taken in $500 billion in fdi, ten times the total stock of fdi Japan accumulated between 1945 and 2000. According to China‘s Ministry of Commerce, U.S. firms have invested more than $40 billion in more than 40,000 projects in China. Given its openness to fdi, China cannot maintain its domestic market as a protected bastion for domestic firms, something both Japan and South Korea did during their periods of rapid growth. Instead, it has allowed U.S. and other foreign firms to develop new markets for their goods and services, especially high-value-added products such as aircraft, software, industrial design, advanced machinery, and components such as semiconductors and integrated circuits. Thanks to this appetite for imports, powerful domestic coalitions, particularly China‘s growing ranks of urban consumers and its most competitive firms, will continue to favor trade openness. Chinese consumers pride themselves on driving foreign-brand cars and using mobile phones and computers with circuits that were designed and manufactured abroad. Many Chinese firms resist protectionism, because they need to import critical components for their domestic operations and fear retaliation against their exports. For example, in the 1990s, China‘s machine tool and aircraft industries failed to secure effective state protection in the face of opposition from domestic firms that preferred imports, and they suffered significant decline as a result. As an open economy and a large importing country, China could be an ally of the United States in many areas of global trade and finance. Already, Beijing has displayed a willingness to play by WTO rules. It has charged Japan and South Korea with unfair trade practices -- markets the United States has also long sought to crack open. China initiated 10 antidumping investigations in 2002 on products with import value of more than $7 billion, and another 20 investigations in 2003. China is now a leading promoter of regional trade and investment regimes, including a free trade zone with asean and a bilateral free trade agreement with Australia, one of the United States‘ closest allies in the Pacific region. Already, Beijing‘s proposals on regional economic cooperation seem far more relevant to most Asian nations than do Washington‘s. The final benefit the United States enjoys from China‘s global economic integration is in the long-term, patient battle to promote liberalism in Asia. Foreign trade and development have spurred advancements in Chinese commercial law, greater regulatory consultation with Chinese consumers, slimmed-down bureaucracies, and adherence to international safety and environmental standards. Although it is still limited, the people‘s freedom to debate economic and social issues has increased, especially in the robust financial media. This process of liberalization is incomplete and uneven, but it is in the interest of both China and the United States to see it continue. outside in Despite these benefits, business and political leaders in the United States now fear that China‘s growing share of world exports, especially of high technology and industrial goods, signals the rise of yet another mercantilist economic superpower in northeastern Asia. But these concerns are unwarranted, for three reasons. First, China‘s high-tech and industrial exports are dominated by foreign, not Chinese, firms. Second, Chinese industrial firms are deeply dependent on designs, critical components, and manufacturing equipment they import from the United States and other advanced industrialized democracies. Third, Chinese firms are taking few effective steps to absorb the technology they import and diffuse it throughout the local economy, making it unlikely that they will rapidly emerge as global industrial competitors. A close look at the breakdown of China‘s exports by type of producing firm puts China‘s economic rise in perspective. Foreign-funded enterprises (ffes) accounted for 55 percent of China‘s exports last year. In this respect, China diverges from the typical Asian success story. According to Huang Yasheng of the Massachusetts Institute of Technology, ffes accounted for only 20 percent of Taiwan‘s manufactured exports in the mid-1970s and only 25 percent of South Korea‘s manufactured exports between 1974 and 1978. In Thailand, the ffes‘ share dropped from 18 percent in the 1970s to 6 percent by the mid-1980s. As shown in the figure on the next page, the dominance of foreign firms in China is even more apparent in advanced industrial exports. While exports of industrial machinery grew twentyfold in real terms over the last decade (to $83 billion last year), the share of those exports produced by ffes grew from 35 percent to 79 percent. Exports of computer equipment shot from $716 million in 1993 to $41 billion in 2003, with the ffes‘ share rising from 74 percent to 92 percent. Likewise, China‘s electronics and telecom exports have grown sevenfold since 1993 (to $89 billion last year), with the ffes‘ share of those exports growing from 45 percent to 74 percent over the same period. This pattern repeats itself in almost every advanced industrial sector in China. The data featured in the figure highlight another trend that reinforces China‘s dependence on foreign investment and the growing gap between ffes and domestic Chinese companies. In the 1990s, Beijing permitted a new fdi trend to develop: a shift away from joint ventures and toward wholly owned foreign enterprises (wofes). Today, wofes account for 65 percent of new fdi in China, and they dominate high-tech exports. But they are much less inclined to transfer technology to Chinese firms than are joint ventures. Unlike joint ventures, they are not contractually required to share knowledge with local partners. And they have strong incentives to protect their technology from both domestic and other foreign firms, in order to capture a greater share of China‘s domestic markets. As a result, according to the most recent Chinese government statistics for high-tech industries (pharmaceuticals, aircraft and aerospace, electronics, telecommunications, computers, and medical equipment), ffes increased their total share of high-tech exports from 74 percent to 85 percent between 1998 and 2002. But perhaps more significant, in the same period, they increased their share of total domestic high-tech sales from 32 percent to 45 percent, while the share of that market held by China‘s most competitive industrial firms, soes, fell from 47 percent to 42 percent. Finally, the data in the figure reveal that China‘s private firms are not yet significant global players. Despite more than two decades of economic reform, China‘s leading domestic industrial and technology companies are still primarily soes. Although they remain inefficient and dependent on government-subsidized loans, they account for the bulk of advanced industrial production in China, boast the country‘s best research and development (R&D) capability, and spend the most resources to develop and import technology. Their preferential access to markets and resources has blocked the rise of private industrial firms. Likewise, collective firms owned by provincial and local governments have failed to emerge as major players in China‘s advanced industrial and technology sectors. particular and exceptional One of the key reasons that state, collective, and private firms in China lag behind ffes is that they have failed to invest in the type of long-term technological capabilities that their Japanese, South Korean, and Taiwanese predecessors built during the 1970s and 1980s. Developing technology is a difficult and uncertain process. Neither large capital investments nor a significant stock of existing science and engineering capability can guarantee success. To create commercially viable products and services, firms must monitor and access new forms of knowledge, understand evolving market trends, and respond rapidly to changing customer demand. Firms that can develop strong links to research institutions, financiers, partners, suppliers, and customers have an advantage in acquiring, modifying, and then commercializing new technology. Such horizontal networks are essential conduits for knowledge, capital, products, and talent. Yet China‘s unreformed political system suppresses such independent social organization and horizontal networking and instead reinforces vertical relationships. China remains a fragmented federal system, its fractious regions unified by a single political party. The ccp controls all aspects of organized life, including industry associations, leaving few avenues for firms to work together for legitimate common interests. This structure drives business leaders to focus on building relationships through ccp officials and the bureaucracy. Although market reforms have brought more rules to the Chinese economy, without institutional checks and balances or direct supervision, ccp officials still exercise wide discretion in defining and implementing those rules, especially at the local level. They can, and often do, manipulate economic policies to pursue particular local goals. Some engage in this “particularism“ because they are corrupt, others because they directly own or operate firms. Most, however, do it because the political elite encourages them to: understanding that local economic growth promotes social and political order, the ccp tolerates, and even rewards, officials who use any means to produce local investment and employment. But this often results in fragmented national industries and wasteful overlapping investment. Chinese business leaders at both public and private firms recognize that an economy dominated by particularism is a risky business environment. Markets are fragmented; rules constantly shift under manipulation by government officials; and political obstacles prevent firms from associating, sharing risk, and taking collective action. To cope with these uncertainties, Chinese business has developed a distinctive industrial strategic culture over the past two decades -- a set of values or guidelines about what strategies “work“ in this environment. First, in response to the “particular“ application of policy, Chinese firms routinely focus on obtaining “exceptional“ treatment from key officials: special access to markets or resources, exemptions from rules and regulations, or protection against predation by other officials. Second, to maximize these exceptional benefits, as well as to avoid entanglements with other firms and their patrons, many Chinese companies shun collaboration within their industry, especially if such collaboration crosses regional or bureaucratic boundaries. Third, they generally favor short-term gains over long-term investments. Finally, Chinese firms tend to engage in excessive diversification in order to mitigate the potential damage of fratricidal price competition created by excess production capacity and overlapping investments. nodes without roads This industrial strategic culture is rational and effective given the current structure of politics and business environment in China. (These features echo patterns of interaction between authoritarian officialdom and merchant enterprise that were established in China‘s first period of industrialization in the Qing dynasty 150 years ago.) But China‘s industrial strategic culture weakens the competitiveness of Chinese firms and it may have damaging economic repercussions down the road. Most Chinese industrial firms focus on short-term gains and, despite increasing operational efficiency, sales revenues, and profits, have not increased their commitment to developing new technologies. Their total spending on R&D as a percentage of sales revenue has remained below one percent for more than a decade. R&D intensity (R&D expenditure as a percentage of value added) at China‘s industrial firms is only about one percent, seven times less than the average in countries of the Organization for Economic Cooperation and Development (oecd). Focusing on short-term returns has also guided China‘s imports of industrial technology. Chinese firms tend to import technology by purchasing foreign manufacturing equipment, often in complete sets such as assembly lines. Throughout the 1980s and 1990s, hardware accounted for more than 80 percent of China‘s technology imports, whereas licensing, “know-how“ services, and consulting accounted for about 9 percent, 5 percent, and 3 percent, respectively. Although China has recently begun importing more “soft technology“ -- mainly in the form of licenses for the use of imported equipment -- the knowledge embodied in it must be absorbed and mastered (or, in technology parlance, “indigenized“) before it can become an effective basis for domestic innovation. Chinese firms remain weak in this regard. Over the last decade, large and medium-sized Chinese industrial firms have spent less than 10 percent of the total cost of imported equipment on indigenizing technology. Indigenization spending at state firms in the sectors in which China is most often cited as a rising power (telecom equipment, electronics, and industrial machinery) is also low (at 8 percent, 6 percent, and 2 percent of the cost of imported equipment, respectively). This is far lower than the average for industrial firms in oecd countries, which amounts to about one-third of total technology import spending. The practice of Chinese firms also stands in contrast to spending patterns in Asian countries such as South Korea and Japan in the 1970s and 1980s, when they were trying to catch up with the West. Industrial firms in those countries spent between two and three times the purchase price of foreign equipment on absorbing and indigenizing the technology embodied in the hardware. Chinese firms have also failed to develop strong domestic technology supply networks. In 2002, Chinese firms devoted less than one percent of their total science and technology budgets (which include technology imports, renovation of existing equipment, and R&D) to purchasing domestic technology. China‘s best firms are among the least connected to domestic suppliers: for every $100 that state-owned electronics and telecom firms spend on technology imports, they spend only $1.20 on similar domestic goods. Thus Chinese technology suppliers do not enjoy a strong “demand pull“ from the best domestic firms to stimulate their own innovative capabilities; they are relegated primarily to serving rural enterprises and less competitive state-owned enterprises. And because ffes use their investments in China as technology “snakeheads“ (a Chinese term for portals), through which they bring product designs, advanced manufacturing equipment, and high-value components from foreign firms or their China subsidiaries, they too are poorly linked to Chinese domestic technology markets. Industrial collaboration and horizontal networking are also rare, prompting Chinese firms to run their R&D projects in relative isolation. In the most recent national R&D census in 2000, Chinese industrial firms reported that they spent 93 percent of their $2.7 billion total R&D outlay in-house, but only 2 percent on collaborative activities with universities and less than 1 percent on projects with other domestic firms. China‘s research institutes are increasingly insular, too, especially since market reforms have forced them to commercialize their operations. In 2000, only 38 of China‘s 292 national industrial research institutes devoted more than one-third of total activities to collaborative projects, even though these institutes are specifically tasked with diffusing technology. Instead, many are becoming competitors of the firms they are supposed to serve. A 2003 World Bank report found that many Chinese engineering research centers have been mass-producing and marketing the products of their research for their own financial gain, rather than diffusing these technologies through patents. Failed collaborations have also plagued China‘s attempts to commercialize domestic innovations. Julong Technologies, the firm that developed China‘s first digital telecom switching equipment, is no longer a major telecom-equipment player due to conflicts among its research, production, and marketing arms, which came under the influence of competing political officials. China‘s homegrown mobile telephone standard, td-scdma, has received central government support, but thus far none of China‘s major telecommunications operators have agreed to commit to it, preferring a foreign standard, wcdma, instead. Given the political perils of challenging competitors and their local patrons, few Chinese firms develop alliances with or invest in companies in other provinces. One recent survey of 800 companies that have conducted domestic mergers and acquisitions found that 86 percent of them invested in firms within their own city and 91 percent invested in firms within their own province. Strong local political ties tend to isolate a region from the rest of the economy, which helps explain why Chinese firms are often small and the country‘s industries fragmented. For example, a recent study performed for the State Council (China‘s cabinet) revealed that Chinese managers regard the country‘s two most politically powerful technology and industrial hubs, Beijing and Shanghai, as leading centers of local protectionism in China. Among the industries most affected by such protectionism were pharmaceuticals, electrical machinery, electronics goods, and transport equipment. Soes and private firms suffered the most, ffes the least -- which suggests that the burden of particularism falls most heavily on Chinese firms. To avoid the difficulties of developing interregional supply chains while securing short-term profits, Chinese firms tend to engage in excessive diversification -- also with damaging results. Many of China‘s most famous firms have made unsuccessful forays into ancillary businesses: Haier (from household appliances into computers, mobile phones, and televisions), Fangzheng (from computers into tea, steel, software, and financial services), and Shougang (from steel into banking, auto assembly, and semiconductors). Huawei, China‘s best technology firm and maker of network equipment, has recently made a questionable entry into the mobile-handset market, where sales prices and margins have fallen dramatically for the last five years and 37 licensed vendors produced excess inventories of 20 million phones last year. Together, China‘s institutions and the industrial choices of local firms have restricted the ability of Chinese firms to develop new products and services. The share of total sales revenues accounted for by new products at Chinese industrial firms was flat, at about 10 percent, throughout the 1990s. (In contrast, new products account for 35 percent to 40 percent of sales revenue for industrial firms in oecd countries. Chinese firms lag behind firms in other developing countries as well: in 2000, for example, new products accounted for about 40 percent of total sales revenues in Brazil‘s electrical machinery industry.) And because of overlapping investments, fragmentation, and the weakness of industry associations, even those firms in China that make new products often find themselves engaged in vicious price competition, which prevents them from reaping high returns from their innovations. Rather than thinking of China as yet another Asian technological and economic “giant,“ it may be more useful to regard it, like Brazil or India, as a “normal“ emerging industrial power. Thanks to the interaction of political structure and industrial culture, China‘s twenty-first-century technological and economic landscape looks like a pattern of “nodes without roads“ -- a few poorly connected centers of technological success. Burdened by these peculiarities, China has yet to lay the domestic institutional foundations for becoming a technological and economic superpower. Without structural political reforms, its ability to indigenize, develop, and diffuse technology will remain limited. And most of its industrial firms will struggle to realize exiguous margins at the lower reaches of global industrial production chains. strategic engagement Given these limits on China‘s potential to threaten the global balance of economic power, the United States should resist the false promise of protectionism, whether in the form adopted by the Bush administration (rhetorical jabs at the Chinese currency peg) or that recommended by the afl-cio labor federation (calls for tariff protection in the guise of better rights for Chinese workers). Rather, recognizing both the challenges and the opportunities presented by China‘s industrial landscape, Washington should pursue a policy of strategic engagement with Beijing. The purpose of this policy would be to bolster U.S. technological, economic, and political leadership, while helping China become more prosperous, stable, and integrated into global economic networks. Pursuing it will require simultaneously strengthening the basis for U.S. technological and manufacturing mastery in the United States and promoting U.S. exports, investment, and liberal values abroad. The United States should revitalize manufacturing at home, for example. Tax cuts are no panacea; the United States needs focused policies to strengthen R&D, reduce legal and health care costs, and improve education. Innovation is critical to growth, but R&D spending in the United States has declined in relative terms from 60 percent of world R&D in the 1960s to 30 percent today. Meanwhile, although U.S. manufacturing productivity has risen by 27 percent in the last five years, health care premiums have risen by 34 percent and litigation costs by about 33 percent, according to the National Association of Manufacturers. To maintain its lead abroad, the United States should push its products into the portal opened by its investment “snakeheads“ in developing markets. It currently lags behind competitors in doing so: while Japan and the EU exported $79 billion and $49 billion in goods to China last year, the United States exported only $37 billion. Both the U.S. government and U.S. industry must do more to help small and medium-sized U.S. firms reach out to China‘s markets. The United States must accept that China is a work in progress and cannot yet meet all of the standards common in advanced industrialized economies. But focused bilateral sanctions, WTO complaints, and multilateral diplomacy should be vigorously pursued if China undertakes unfair trade practices that challenge core U.S. interests. The United States should prioritize carefully, however, focusing on the issues that pose the greatest threats and present the greatest opportunities. These include China‘s recent attempts to impose technical standards on foreign firms in China, such as for dvd players, wireless communications, and mobile telephones, or to tax imported goods such as integrated circuits (a policy tantamount to a domestic subsidy and prohibited by WTO rules). Washington should also urge Beijing to curb investments in excess manufacturing capacity, as they could threaten key industries such as automobiles and semiconductors. Continued engagement of this kind will help the United States consolidate the benefits it already reaps from the current relationship, ensure China‘s continued prosperity and stability, and encourage China to play by global rules. Working with its allies to further incorporate China‘s economy in international trade and industrial networks, the United States can reinforce the technological leadership of the advanced industrialized democracies, while diminishing the scope for Chinese technological and economic mercantilism. The paradox of China‘s technological and economic power is that China must implement structural political reforms, not simply freer markets or greater investment, before it can unlock its potential as a global competitor. But if it were to undertake such reforms, it would likely discover even greater common interests with the United States and other industrialized democracies. Pursuing strategic engagement is thus a way for the United States to hedge its bets: to preserve its competitive edge while encouraging China to continue developing its economy and liberalizing its politics. Chinese political reform is in the long-term interest of both Beijing and Washington. Unfortunately, the burden of a long history of fragmentation and authoritarian rule weighs heavily against China‘s successfully completing this final modernization. George J. Gilboy is a senior manager at a major multinational firm in Beijing, where he has been working since 1995, and a research affiliate at the Center for International Studies at the Massachusetts Institute of Technology.