In this talk, Prof. Naubahar Sharif argues that China is positioning itself to assume global leadership in technology within the coming few decades. Find out more about the talk at http://iems.ust.hk/events/event/china-as-the-worlds-technology-leader-in-the-21st-century-dream-or-reality-hkust-iems-ey-hong-kong-emerging-market-insights-series/

1. HKUST
Ins*tute
for
Emerging
Market
Studies
(IEMS)
China
as
the
World’s
Technology
Leader
Naubahar
Sharif
Associate
Professor,
Division
of
Social
Science,
HKUST,
and
Faculty
Associate

2. China’s
Economic
Ascent
• Rapid
economic
growth
from
1979
onwards
• Obvious
compe**ve
advantages
(i.e.
popula*on)
• Has
now
developed
into
a
leading
economic
(poli*cal?,
military?)
superpower
• Story
of
China’s
economic
ascent
has
been
widely
told,
heard
and
understood
– .
.
.
But
how
about
the
story
of
China
as
a
technological
superpower?
1

3. How
to
Measure
Leadership?
• Four
factors
comprise
‘technology
leadership’
– Research
and
development
(R&D)
intensity
– R&D
personnel
– Number
of
scien*fic
publica*ons
– Number
of
patent
applica*ons
2/50

4. A
Snapshot
Look
at
the
Strength
of
China’s
Innova*on
System
(1/3)
• Rate
of
spending
on
R&D
outpaces
overall
economic
growth
– In
2012,
China
spent
US$163
billion,
or
1.98%
of
its
growing
GDP
on
R&D
• Placing
it
2nd
in
the
world,
only
to
the
United
States
• With
3.2
million
R&D
personnel
in
2012,
China
now
turns
out
the
largest
number
of
undergraduate,
postgraduate,
and
doctoral
students
in
science
and
engineering
in
the
world
3/50

5. A
Snapshot
Look
at
the
Strength
of
China’s
Innova*on
System
(2/3)
• Over
the
period
2001-­‐2011,
China
ranked
2nd
in
the
world
in
research
output
as
measured
by
the
number
of
papers
published
by
Chinese
scien*sts
in
research
journals
• Ranked
7th—but
rising—in
terms
of
cita*ons
for
papers
authored
by
Chinese
scien*sts
• In
2012,
China
trailed
only
the
United
States,
Japan
and
Germany
in
patent
filings
under
the
Patent
Coopera*on
Treaty
(PCT)
administered
by
the
World
Intellectual
Property
Office
(WIPO)
4/50

6. A
Snapshot
Look
at
the
Strength
of
China’s
Innova*on
System
(3/3)
– In
2012,
two
large
telecommunica*ons
equipment
manufacturers,
ZTE
and
Huawei
ranked
1st
and
3rd
in
worldwide
ranking
of
top
PCT
applicants
– At
the
U.S.
Patent
and
Trademark
Office
(USPTO),
the
number
of
patent
applica*ons
origina*ng
in
China
grew
18%
from
2009
to
2010
alone
• A
rate
matched
by
no
other
country
5/50

7. China’s
Technological
Ascent
Widely
Ques*oned
(1/3)
• Despite
these
indicators,
there
exists
considerable
skep*cism
over
China’s
capacity
to
alain
global
technological
leadership
– George
Gilboy,
a
research
affiliate
at
MIT
• Wrote
in
Foreign
Affairs,
in
2004,
that
‘Chinese
firms
.
.
.
forgo
investment
in
long-­‐term
technology
development.
.
.
[and]
rely
heavily
on
imported
foreign
technology
and
components’
6/50

8. China’s
Technological
Ascent
Widely
Ques*oned
(2/3)
– David
Shambaugh
of
George
Washington
University
• In
2012
iden*fied
ten
weaknesses
in
corporate
and
human
resources
management
to
explain
why
Chinese
companies
are
s*ll
taking
baby
steps
towards
parity
in
global
business
– Dan
Breznitz
and
Michael
Murphee,
professors
at
the
Georgia
Ins*tute
of
Technology
• Argued
in
2011
that
China
has
selled
on
merely
keeping
pace
with
technological
advances
elsewhere,
pursuing
innova*on
only
in
later
!
in
less
consequen*al
stages
of
the
produc*on
process
7/50

9. China’s
Technological
Ascent
Widely
Ques*oned
(3/3)
– Thomas
Friedman
(journalist,
columnist,
author)
• Argued,
in
Sep
2012,
that
driving
economic
growth
through
entrepreneurship
and
innova*on
depends
on
a
culture
of
trust
!
observing
that
‘China
has
a
huge
trust
deficit’,
a
lingering
remnant
of
Maoism
• Aforemen*oned
skep*cism
overlooks
several
important
factors
that
have
posi*oned
China
to
compete
for
global
technological
leadership
8/50

10. China’s
Sources
of
Technological
Advantage
• Three
dis*nct
sources
of
compe**ve
advantage
that
China
will
leverage
in
developing
its
capacity
for
technological
innova*on
1.
Rapidly
growing,
large
domes*c
market
2.
Autocra*c
system
of
governance
3.
Globaliza*on
9/50

11. A
Brief
Look
at
Tech
Leadership
Throughout
History
(1/6)
• Considering
the
period
from
the
Bri*sh
industrial
revolu*on
onwards
.
.
.
• .
.
.
Technology
has
been
leveraged
to
alain
compe**veness,
as
well
as
economic
and
military
leadership
• Over
the
70-­‐year
period
of
the
Bri*sh
industrial
revolu*on,
there
were
advances
made
in
the
iron,
colon
and
steel
industries
– These
advances
acted
as
catalysts
for
further
technological
change
in
associated
industries
10

12. A
Brief
Look
at
Tech
Leadership
Throughout
History
(2/6)
– Technological
changes
led
to
social,
economic,
poli*cal
and
social
changes
(and
vice
versa)
• By
the
end
of
the
industrial
revolu*on,
Britain
had
developed
a
considerable
technological
lead
over
na*ons
– Accomplishments
demonstrated
at
the
First
World’s
Fair
in
London
(Crystal
Palace)
in
1851
• Aqer
Britain,
Germany
began
to
industrialize
in
Europe,
and
then
also
France
– Technology
transfer
played
an
important
role
11

13. A
Brief
Look
at
Tech
Leadership
Throughout
History
(3/6)
• From
the
turn
of
the
19th
century
the
torch
of
global
technological
leadership
shiqed
from
Europe
to
USA
• America
is
the
global
technological
leader
today
– !
But
being
threatened
by
China!
• By
the
First
World
War
America
firms—especially
in
chemical
and
electronic
industries—had
established
first-­‐class
industrial
R&D
labs
– These
labs
were
insulated
from
more
immediate
corporate
pressures
to
solve
shop-­‐floor
problems
• Allowed
them
to
dedicate
more
*me
to
inven*on
12/50

14. A
Brief
Look
at
Tech
Leadership
Throughout
History
(4/6)
• Post
World
War
II
American
dominance
was
due
to
advanced
technology
– Rise
of
large
US
corpora*ons
noteworthy
as
they
pioneered
mass
produc*on
techniques,
the
assembly
line,
standardized
product
and
long
produc*on
run
• From
mid-­‐1900s
onwards,
large
US
corpora*ons
had
developed
a
clear
technological
edge
in
global
produc*on
and
trade
• US
viewed
as
‘leader’
and
other
countries
as
‘followers’
in
the
“catching-­‐up
hypothesis”
13/50

15. A
Brief
Look
at
Tech
Leadership
Throughout
History
(5/6)
• American
technological
leadership
has
not
remained
uniformly
strong
throughout
the
20th
century
• Was
threatened
in
the
1980s
by
Japan
• Japan’s
focus
on
innova*on
and
technological
advance
propelled
Japan
into
the
leadership
posi*on
within
the
Asian
region
• Ini*al
explana*ons
to
describe
Japan’s
ascent
focused
simplis*cally
on
copying,
imita*ng,
and
impor*ng
foreign
technology
– With
passage
of
*me
this
explana*on
was
no
longer
adequate
14/50

16. A
Brief
Look
at
Tech
Leadership
Throughout
History
(6/6)
– Gradually
became
clear
that
the
correct
explanatory
factors
were:
higher
technological
sophis*ca*on
of
new
products
and
processes,
shorter
lead
*mes,
rapid
diffusion
of
new
technologies,
and
integra*on
of
R&D,
produc*on,
and
technology
imports
at
firm
level
• Aqer
Japan,
smaller
countries
have
focused
their
alempts
on
taking
a
‘slice’
of
the
technological
leadership
pie
(i.e.
Israel,
Sweden,
Denmark,
Finland,
Korea,
Taiwan,
Singapore)
15/50

17. China’s
Three
Compe**ve
Advantages
• In
order
to
alain
technological
leadership,
China
has
three
dis*nct
sources
of
compe**ve
advantage
(each
discussed
individually):
– Market
size
– Governmental
power
– Globaliza*on
16/50

18. Growing
Large
Domes*c
Market
(1/6)
• Market
size
is
an
important
determinant
of
innova*on
ac*vi*es
– Greater
the
demand,
greater
the
revenue
– More
efficient
the
produc*on
process,
greater
the
aggregate
cost
savings
• Implies
a
growing
market
with
growing
demand
will
lead
to
increasing
returns
from
investment
innova*on
– Companies
incen*vized
to
introduce
new
products
to
reap
increasing
returns
17/50

19. Growing
Large
Domes*c
Market
(2/6)
• Following
World
War
II,
US
companies
also
benefited
from
selling
to
the
world’s
largest
domes*c
market
(the
US)
– These
US
firms
led
the
world
in
developing
and
implemen*ng
leading-­‐edge
technologies,
and
claimed
largest
worldwide
share
in
many
export
goods
!
These
developments
reflected
longstanding
American
dominance
in
mass
produc*on
industries
–
a
dominance
that
resulted
from
ready
access
to
natural
resources
and
the
world’s
largest
domes*c
market
18/50

20. Growing
Large
Domes*c
Market
(3/6)
– Resource
and
capital
intensive
American
manufacturing
firms
operated
on
a
much
larger
scale
than
their
counterparts
elsewhere
!
Due
to
economies
of
scale
American
firms
enjoyed,
innova*ons
from
Europe
were
developed
and
brought
to
market
in
the
US
-­‐ Similar
dynamics
will
play
out
in
the
massive
Chinese
market
!
China
has
strengths
in
mass
produc*on
(‘workshop
of
the
world’)
able
to
adapt
Western
techniques
to
Chinese
condi*ons
19/50

21. Growing
Large
Domes*c
Market
(4/6)
• China’s
emergence
as
a
rapidly
growing
major
market
offers
it
a
unique
advantage
for
technological
advancement
– The
likes
of
which
no
na*on
other
than
the
US
has
hitherto
enjoyed
• Local
Chinese
firms
are
best
situated
to
sa*sfy
the
singular
tastes
of
the
Chinese
market
– In
terms
of
Chinese
consumers
expecta*ons
regarding
price,
quality,
and
product
features
20/50

22. Growing
Large
Domes*c
Market
(5/6)
• Integra*on
of
mass
produc*on
strength
with
the
world’s
second
largest
economy
has
led
forecasters
at
Goldman
Sachs,
Standard
Chartered
Bank,
the
Economist
to
predict
that
the
Chinese
economy
will
be
twice
as
large
as
the
US
economy
by
2030
– Jus*n
Yifu
Lin
(former
chief
economist
of
the
World
Bank)
predicted
that
by
2030,
100-­‐150
of
the
largest
Fortune
500
companies
in
the
world
will
be
Chinese
firms
21/50

23. Growing
Large
Domes*c
Market
(6/6)
• If
these
forecasts
prove
true,
capacity
of
Chinese
firms
to
con*nuously
leverage
advantage
of
their
large
home
market
to
enhance
their
technological
compe**veness
will
be
a
major
success
factor
22/50

24. China’s
Three
Compe**ve
Advantages
– Governmental
power
23/50

25. Autocra*c
System
of
Governance
(1/9)
• On
the
way
to
becoming
global
technological
leaders,
Chinese
companies
have
benefiled
significantly
from
the
Chinese
government’s
industrial
policy
• Chinese
government’s
industrial
policy
is
unmatched
in
scale
and
strength
by
Western
standards
• In
fact,
China
has
adopted
the
US
model
to
boost
their
own
state-­‐backed
R&D
investments
24/50

26. Autocra*c
System
of
Governance
(2/9)
• Success
of
high-­‐tech
industries
in
the
US
in
the
postwar
era
reflected
massive
private
and
public
investments
in
R&D
and
scien*fic
and
technical
educa*on
(made
aqer
World
War
II)
• Given
the
Chinese
autocra*c
system
of
governance,
China
is
able
to
steer
Chinese
(state-­‐
owned)
and
private
companies
to
increase
their
R&D
investments
– This
has
been
reflected
in
the
amount
of
money
spent
on
R&D
in
China
25/50

27. Autocra*c
System
of
Governance
(3/9)
• Use
of
industrial
policy
to
help
domes*c
companies
upgrade
technological
capability
have
their
roots
in
Hamiltonian
economic
philosophy
!
Holds
that
a
big
country
needs
big
organiza*ons
to
succeed
and
that
the
federal
government
should
partner
with
private
enterprise
to
finance
scien*fic
research
and
provide
resources
and
infrastructure
that
businesses
lack
• Under
this
Hamiltonian
approach,
American
government
sponsored
projects
such
as
the
Erie
Canal,
transcon*nental
railroad,
land-­‐grant
universi*es,
network
of
airports
26/50

28. Autocra*c
System
of
Governance
(4/9)
– Helped
create
within
the
US
a
huge
interconnected
marketplace
• Companies
such
as
Standard
Oil,
General
Motors,
US
Steel,
General
Electric
and
Sears
Roebuck
prospered
and
grew
– US
government
and
military
led
the
way
in
financing
innova*on
in
its
early
stages
– Government-­‐financed
research
and
procurement
fueled
industries
that
produced
hybrid
seed,
radar,
synthe*c
rubber,
the
microchip,
GPS,
Internet,
etc.
27/50

29. Autocra*c
System
of
Governance
(5/9)
– Helped
create
within
the
US
a
huge
interconnected
marketplace
• Companies
such
as
Standard
Oil,
General
Motors,
US
Steel,
General
Electric
and
Sears
Roebuck
prospered
and
grew
– US
government
and
military
led
the
way
in
financing
innova*on
in
its
early
stages
– Government-­‐financed
research
and
procurement
fueled
industries
that
produced
hybrid
seed,
radar,
synthe*c
rubber,
the
microchip,
GPS,
Internet,
etc.
28/50

30. Autocra*c
System
of
Governance
(6/9)
• Most
of
the
centralized
power
that
enabled
China
to
run
a
planned
economy
remains
in
place
– Government
is
able
to
play
a
significant
role
in
shaping
increasingly
market-­‐oriented
ac*vi*es
• Chinese
government
has
more
policy
instruments
at
its
disposal
than
do
its
Western
counterparts
– Enables
the
government
to
facilitate
technological
learning
on
part
of
indigenous
firms
29/50

31. Autocra*c
System
of
Governance
(7/9)
• With
beneficial
policies,
Chinese
government
has
bolstered
the
wind
turbine
industry,
and
‘strategic
emerging
technologies’
which
include:
environmental
technology;
telecommunica*ons;
biotechnology;
advanced
manufacturing;
renewable
energy;
advanced
material
and
green
vehicles
– Beneficial
policies
include
large-­‐scale
government
grants,
tax
concessions,
easy
access
to
bank
loans,
policies
regarding
intellectual
property,
standardiza*on,
etc.
30/50

32. Autocra*c
System
of
Governance
(8/9)
• China
is
the
2nd
largest
performer
of
R&D
globally,
accoun*ng
for
12%
of
global
total
– US
is
the
largest
performer,
with
31%
• The
pace
of
real
growth
in
China’s
overall
R&D
expenditure
over
the
period
1999-­‐2009
has
been
excep*onally
high,
at
20%
annually
• In
March
2006,
China
launched
its
‘Na*onal
Mid-­‐
and
Long-­‐Term
Science
and
Technology
Development
Plan
for
2006-­‐2020’
31/50

33. Mid
to
Long-­‐Term
S
&
T
Development
Plan,
2006-­‐2020
• A
plan
that
demonstrates
remarkable
foresight
for
a
developing
country
• In
the
Plan,
the
R&D
expenditure
to
GDP
ra*o
is
to
be
raised
to
2.5%
by
2020
– In
2012,
it
was
1.98%
• The
Plan
proposes
‘indigenous
innova*on’
– Represents
the
Chinese
leadership’s
ambi*on
to
sustain
economic
growth
through
indigenous
innova*on
and
increased
government-­‐led
R&D
investments
32/50

34. Autocra*c
System
of
Governance
(9/9)
• There
is
of
course
concern
in
the
US
and
elsewhere
that
Beijing’s
visible
hand
is
giving
China
an
unfair
advantage
because
China
is
not
playing
fairly,
‘by
the
rules
of
interna*onal
trade’
– This
too
is
a
symptom
of
the
CCP’s
style
of
governance
(where
a
heavy
hand
combined
with
secrecy
prevails)
33/50

35. China’s
Three
Compe**ve
Advantages
– Globaliza9on
34/50

36. Intensified
Forces
of
Globaliza*on
(1/9)
• In
a
globalized
era,
Chinese
companies
need
not
develop
every
cuzng-­‐edge
technology
on
their
own
• Rather,
they
can
undertake
mergers
and
acquisi*ons
as
a
deliberate
strategy
for
acquiring
advanced
technologies
owned
by
foreign
firms
35/50

37. Intensified
Forces
of
Globaliza*on
(2/9)
• As
early
as
the
Tenth
Five-­‐Year
Plan
(2001-­‐2005),
Chinese
government
unveiled
its
‘go
global’
strategy
to
encourage
Chinese
companies
to
invest
abroad
• China’s
outward
foreign
direct
investment
(FDI)
accelerated
aqer
2009
– In
2010,
China’s
outward
FDI
amounted
to
US$68.6
billion,
ranking
it
5th
in
the
world
• Goal
of
many
outward
FDI
projects
has
been
acquisi*on
of
advanced
technology
!
some
illustra*ve
examples:
36/50

38. Intensified
Forces
of
Globaliza*on
(3/9)
• Lenovo
Group
struck
two
deals
in
close
succession
in
early
2014
– Jan:
Bought
IBM’s
low-­‐end
server
business
for
server
business
for
US$2.3
billion
– Feb:
Bought
Google
Inc’s
Motorola
handset
division
for
US$2.91
billion
• These
acquisi*ons
further
remodel
Lenovo
as
a
force
in
mobile
devices
in
addi*on
to
data
– Posi*ons
them
to
challenge
largest
global
tech
firms
such
as
Apple
and
Samsung
37/50

39. Intensified
Forces
of
Globaliza*on
(4/9)
• Beijing
Automo*ve
Industry
Holding
Company
Limited
(BAIC)
acquired
IPRs
affiliated
with
Saab
vehicles
and
engines
(Swedish
car
manufacturer
owned
by
General
Motors),
its
en*re
R&D
facili*es,
quality
management
systems,
and
supplier
development
and
management
systems
in
Dec
2009
– BAIC’s
objec*ve
in
acquiring
Saab
was
to
integrate
Saab’s
technology
into
its
future
R&D
opera*ons
to
develop
an
indigenous
BAIC
vehicle
• First
indigenous
BAIC-­‐brand
vehicle
developed
based
on
the
Saab
technology
was
launched
in
Sep
2014
38/50

40. Intensified
Forces
of
Globaliza*on
(5/9)
• Chinese
carmaker
Geely
completed
acquisi*on
of
another
Swedish
automaker,
Volvo,
from
Ford
motors
in
Aug
2010
– Geely
needed
Volvo’s
technology
in
order
to
improve
quality
of
its
own
brand
of
cars
because
of
increasing
local
compe**on
– Geely
requires
Volvo
engineers
to
help
it
improve
its
engineering
capabili*es
– Geely
owns
all
of
Volvo’s
key
technologies
and
IPRs
and
also
has
the
right
to
use
the
IPR
• IPR
ownership
represents
the
core
value
of
this
acquisi*on
39/50

41. Intensified
Forces
of
Globaliza*on
(6/9)
• In
avia*on,
China
Avia*on
Industry
General
Aircraq
(CAIGA)—largest
general
aircraq
manufacturer
in
China—acquired
US-­‐based
Cirrus
Aircraq
in
Jun
2011
– By
acquiring
Cirrus,
CAIGA
will
complete
development
of
a
new
single-­‐engine
‘Vision’
jet
40/50

42. Intensified
Forces
of
Globaliza*on
(7/9)
• In
renewable
energy,
R&D
alliance
between
China’s
Sinovel
and
US-­‐based
Windtec
in
2008
allowing
Sinovel
to
produce
five-­‐
and
six-­‐
megawal
turbines
in
2010
and
2011
• Chinese
company
Goldwind
acquired
70%
ownership
of
German-­‐based
Vensys
Energy
in
2008
allowing
it
access
to
the
world’s
leading
technology
and
professionals
in
area
of
permanent
magnet
direct-­‐drive
wind
turbines
41/50

43. Intensified
Forces
of
Globaliza*on
(8/9)
• In
machinery,
Sany
Group—China’s
largest
construc*on
equipment
manufacturer—
acquired
German
company
Putzmeister
(manufacturer
of
high-­‐tech
concrete
pumps)
in
Jan
2012
– For
its
cuzng
edge
technology
42/50

44. Intensified
Forces
of
Globaliza*on
(9/9)
• In
energy,
CNOOC
acquired
Canadian
oil
producer
Nexen
for
US$15
billion
in
Feb
2013
and
Sinopec
purchased
49%
of
the
North
Sea
opera*ons
of
Talisman
Energy
(another
Canadian
oil
company)
in
Jul
2012
– Provides
Chinese
firms
with
advanced
produc*on
technologies
to
draw
oil
and
gas
from
nontradi*onal
areas
such
as
deepwater
fields
and
hardened
rock
forma*ons
more
efficiently
43/50

45. Implica*ons
for
Emerging
Markets
(1/3)
• There
exist
plen*ful
opportuni*es
for
emerging
market
(EM)
firms
to
partner
with,
or
invest
in
Chinese
firms
and
R&D
facili*es
• Corporate
execu*ves
in
EM
should
expand
their
horizons
beyond
the
tradi*onal
S&T
superpowers
such
as
the
US,
Japan
and
Germany
44/50

46. Implica*ons
for
Emerging
Markets
(2/3)
• In
China,
opportuni*es
will
abound
in
industry
(and
academia)
for
– Coopera*on
in
S&T
applied
research
– Investment
in
R&D
partnerships
– Sourcing
technologically
sophis*cated
manufacturing
components
and
R&D
resources
• Not
only
will
EM
firms
find
it
cheaper
to
move
into
China,
since
some
of
them
are
Asian,
they
will
also
find
cultural
affini*es
there
45/50

47. Implica*ons
for
Emerging
Markets
(3/3)
• Knowledge
and
products
that
result
from
such
coopera*on
will
be
closer
to
market
for
domes*c
consump*on
(for
those
located
near
China)
• EM
firms
that
partner
with
Chinese
firms/
universi*es
to
conduct
R&D
or
manufacturing
in
China
will
be
able
to
take
advantage
of
China’s
growing
and
improving
S&T
infrastructure
and
human
capital
– And
be
closer
to
what
is
soon
to
be
the
world’s
largest
consumer
market
46/50

48. Conclusions
(1/4)
• Too
few
in
policymaking
and
financial
circles
an*cipate
the
rise
of
Chinese
mul*na*onals
to
posi*ons
of
global
technological
leadership
• To
be
sure,
some
Chinese
companies
have
benefiled
enormously
from
monopolies
granted
by
Beijing
and
con*nuous
improvement
of
Chinese
firms’
technological
strength
relies
on
poli*cal
stability
in
the
country
47/50

49. Conclusions
(2/4)
• However,
more
of
this
technological
rise
should
be
alributed
to:
– China’s
massive
growing
domes*c
market
– Strong
government
support
aimed
at
turning
China
into
an
‘innova*on
na*on’
– Intensified
forces
of
globaliza*on
48/50

50. Conclusions
(3/4)
• Combined,
and
individually,
these
factors
help
explain
how
and
why
Chinese
companies
will
move
beyond
their
tradi*onal
reliance
on
low
factor-­‐input
costs
to
scale
the
value-­‐added
chain
– Thereby
realizing
the
country’s
development
and
strategic
goals
based
on
its
burgeoning
technological
strength
• M&A
cases
are
par*cularly
insigh|ul
because
they
indicate
the
extent
to
which
technology
transfer
to
China
is
now
taking
place
across
a
broad
swathe
of
industries
49/50

51. Conclusions
(4/4)
– In
the
past,
Chinese
companies
had
to
be
content
with
acquiring
technology
through
license
agreements
or
joint
ventures
with
foreign
partners
• These
arrangements
limited
use
of
technology
by
Chinese
firms
– When
a
Chinese
company
acquires
an
overseas
counterpart
outright,
it
owns
the
underlying
technology
• Can
use
the
technology
is
as
it
wishes
(domes*cally
or
interna*onally)
– Furthermore,
overseas
acquisi*ons
represent
a
point
of
pride
in
China,
showcasing
its
rising
economic
strength
• Signaling
both
Chinese
triumph
and
decline
of
its
Western
counterparts
50/50

52. HKUST
Ins*tute
for
Emerging
Market
Studies
(IEMS)
• Provides thought leadership
on business and policy
challenges in emerging
economies
• 40+ Faculty Associates
• Founded in 2013 with
support from EY
iems.ust.hk
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