Wednesday, May 09, 2007

Prof Douglas Fuller on China's Technological Development

I attended a lunch talk today with Prof Douglas Fuller, Assistant Professor of American University and Visiting Assistant Professor in the Department of Management of Chinese University of Hong Kong. The topic of his presentation was "Creating Ladders out of Chains: China's Technological Development in a World of Global Production" (download from here).

Professor Fuller argues for the positive effects of foreign investment especially those by ethic Chinese, contributing to China's development in the technological industry, and he was relatively skeptical of the argument for domestic government support policies or even the call for "indigenous innovation." While most "dragon-head" firms championed by the government and its policies turn out to be paper tigers, the pattern of foreign contribution is evident from his study of firms in the IC (integrated circuits) industry and patent data. All that can go wrong with a "picking winner" system have indeed gone wrong: easy for firms to claim strategic importance and government favoratism, but nothing to punish the losers.

This observation is nothing too surprising to most of us. Yet this is a refreshingly independent viewpoint well supported by data and good analysis that is worthwhile of notice. The deeper analysis of the reasons behind this phenomenon will be very crucial, as Prof Fuller points out, China's industrial policy has been one of failure. I look forward to reading more of Prof Fuller's
papers in future.

The event was organized by Savantas Policy Institute.

[photos courtesy of Mr Stephen Pong, MEIIA]


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