China: Technological price for entry in the biggest market

A Chinese investor looks at an electronic board showing stock information.

(Photo: Artemuestra/Flickr/CC BY-SA)

In the news, allegations have surfaced accusing China of forcing various entities in the technology industry to give Chinese establishments technology. Allegedly, this is required as part of their cost to do business in China, although China denies this. China’s increasing integration with the global economy has contributed to sustained growth in international trade.

The new wave of Chinese economics

China’s exports have recently become more diversified and have achieved greater penetration of industrial markets. This has been accompanied by a surge in Chinese imports from all regions — especially Asia, where China plays an increasingly central role in regional specialization. Tariff reforms have been implemented in China since the 1980s, and with its recent WTO accession, China has committed itself to additional reforms that are far reaching. Sustained implementation of these commitments would further deepen China’s international integration and generate benefits for most partner countries.

China emerges as a global power

Approaching this from a skeptical point of view, all the economic policies and trade processes that China is seen to be following could be a ruse in order to conduct or pursue its agenda in terms of increasing its advancement, even through illicit or prohibited means. It’s not as though China’s markets are free enough to have financial options like bad credit cash loans and installment loans. As China emerges as a global power, it is important to understand what role it will play and the security perceptions it has of both Asia and the world.

China’s view of U.S. society

The most important issue for China today is political stability at home. Any attempt to influence the status quo is not welcome and is deemed to be interference in China’s internal affairs. Many Chinese believe that the United States represents the core values of Western Civilization. Several believe the U.S. is in conflict with the Eastern civilizations represented by China. As a result, Chinese leadership views any American influence as a challenge to China’s political stability.

China aggressively pursues technology

In the 21st century, the status of superpower or world power requires a certain degree of technological advancement and progression. This is the age of information technology, and the fundamental resource of most modern and fast developing economies is technology. For a country to be powerful, it needs to possess a significant amount of advanced technology.

China is the world’s most populous country

Let’s assume for the moment that the allegations are true. Will the U.S. or any other country really do anything about it? Will the U.S. do as they said and really “push” China on the issue? That is highly unlikely. China is the world’s most populous country and the second largest energy consumer behind the United States. Rising oil demand and imports have made China a significant factor in world oil markets. Given this fact, China is a necessary part of the international economic system.

There would be significant repercussions if China is antagonized in any way. This means that by setting aside international trade policies, China can do pretty much what it wants in most cases. Given its status and place in the international arena, who can really do anything about it?

Source:

RePEc: http://ideas.repec.org/p/imf/imfwpa/04-36.html

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