| dc.description.abstract | This project examines China’s efforts to accelerate its economic rise using technology extraction policies, defined as measures that condition foreign access to China’s market on technology transfers to domestic firms. Using original data, I address two puzzling and previously unexamined patterns in China’s technology transfer behavior. First, China’s use of tech extractors rose sharply in the years after it joined the World Trade Organization (WTO) in 2001, only to fall equally dramatically after 2015. Second, within this broad-based increase after 2001, there was surprising variation across industries in China’s use of these tools. China issued tech extractors liberally in many high value-added industries, including high-speed rail, aircraft manufacturing, and renewable energy technology. At the same time, it used them sparingly in others, such as battery technology, precision measurement equipment, and semiconductor design and fabrication.
What explains variation in China’s use of technology extraction policies? I argue that national power and regime security concerns lead China to pursue tech extraction in strategic industries, but that China is constrained in doing so, even in the most strategically vital sectors, by its bargaining power over foreign firms. China’s leverage is weakest when policy enforcement capacity is low and when it sits in the middle of global value chains in an industry, such that most imports consist of foreign inputs to be processed locally for re-export elsewhere. In these industries, China relies more on foreign firms to drive export growth and employment than they rely on it as a final market. This limits China’s bargaining power, constraining the use of tech extractors.
I evaluate these arguments using a combination of statistical analysis of an original industry-level dataset on technology extractors from 1995-2020 and detailed qualitative case studies of tech extraction in three strategic industries. My data, based on manual analysis of several hundred Chinese language regulations, reveal that strategic industries account for 85 percent of the increase in the use of tech extractors after 2001. However, I find that China is more than twice as likely to use these policies in strategic industries in which it is downstream of value chains as a final market than in those in which it is intermediate. Case studies of tech extraction efforts in wind turbine technology, semiconductors, and aviation illuminate the relationship between enforcement capacity and the rise of tech extractors, value chain position and the non-use of these tools in some strategic sectors, and the causes behind the decline of technology extraction policies after 2015. | |
