China Repeals Policy That Favors Chinese

We’ve blogged about China before (see China Is More E Than E-Waste These Days).

In his article for Harvard Business Review called “What’s Wrong With America’s Innovation Policies,” Bruce Nussbaum talks about China’s “Fast Follower” innovation policy and how it’s a combination of state-driven policies that:

  1. require Western companies to partner with Chinese firms to do business
  2. demand transfer of the latest technologies in exchange for access to markets
  3. favoring “indigenous innovation” in government purchasing; fencing off green and other industries from foreign competition
  4. offering low-interest state-bank loans to local champions

Well, China has now repealed the technology policy that favored Chinese producers in government purchases of computers and other tech goods.  The policy was at odds with World Trade policies but was in place for a long time anyway.  This announcement from the Chinese Finance Ministry is the second time in a month that Beijing repealed a technology policy after complaints by its trading partners.

The Associated Press is now reporting that a brief ministry statement late Wednesday June 29 said the Chinese government would no longer enforce procurement rules that are part of a decade-old “indigenous innovation” campaign to spur domestic technology development.

“This repeal represents a forward step toward leveling the playing field in the government procurement market in China,” said Davide Cucino, president of the European Union Chamber of Commerce in China, in a written response to questions, as quoted in Product Design and Development.

Still, a great place to be in regards to profiting from China’s economic surge is, interestingly, in Education.  Parents sending their children to study in the U.S. is an insurance policy that many Chinese these days are purchasing.  While the trade playing field appears to be leveling on one hand, some argue that China is edging closer to a police state type of nation — leaving the educated, competent and savvy once again looking Westward for quality of life.

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