Technology Transfer Between the US, China and Taiwan

Moving Knowledge

Douglas B. Fuller, Murray A. Rubinstein

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781136168772
• Edition: 1
• Topic: Business
• Subtopic: IT Industry
• Index: Business

Examining the flow of technical knowledge between the US, Taiwan and Mainland China over the last sixty-five years, this book shows that the technical knowledge that has moved between these states is vast and varied. It includes the invention and production of industrial goods, as well as knowledge of the patterns of corporate organization and management. Indeed, this diversity is reflected in the process itself, which is driven both by returning expatriates with knowledge acquired overseas and by successful government intervention in acquiring technology from multinational firms.

Technology Transfer Between the US, China and Taiwan engages with the evolving debates on the merits, importance and feasibility of technology transfer in the process of economic development globally, and uses the example of Taiwan to show that multinational corporations can indeed play a positive role in economic development. Further, it reveals the underlying tension between international cooperation and nationalism which inevitably accompanies international exchanges, as well as the delicate balancing act required between knowledge acquisition and dangerous levels of dependency, and the beneficial role of the US in East Asia's technological development.

With contributors from disciplines ranging from history, geography, urban planning, sociology, political science and electrical engineering, this multi-disciplinary book will be of great interest to students and scholars working across a broad range of subjects including Taiwan studies, Chinese studies, economics, business studies and development studies.

1 The KMT and science and technology, 1927-1980

J. Megan Greene

Technology transfer from the US to China has been going on to one degree or another at least since the Opium Wars and the subsequent opening of the treaty ports. Although much of the Western technology acquired by China in the nineteenth century had military applications, by the late nineteenth century the emergent industrial sector had also become a locus of technology transfer. As the KMT came to power in 1927, it rapidly became apparent that this modern Chinese state would need to develop strategies to foster and manage technology transfer that could assist with national development. To this end, both in China, between 1927 and 1949, and in Taiwan, after 1945, the KMT constructed a series of institutions that were designed, at least in part, to develop and manage relationships with foreign states and firms that might lead to the transfer of technologies that China needed. As this chapter shows, there was considerable continuity in the approach to technology transfer taken by the KMT over the long period between 1927 and 1980. However, throughout this period the KMT also demonstrated a high degree of flexibility, and in particular an ability to adapt to changing international and domestic circumstances by adjusting their approach to interacting with foreign states and businesses and creating new institutions when needed. This chapter examines the efforts of the KMT to foster technology transfer both in China, from 1927–1949, and in Taiwan, from 1949–1980. It describes the institutions the KMT constructed as well as the ways these institutions served to build and manage relationships with foreign states and businesses that had technologies the KMT needed.

Building institutions and networks: The KMT and technology transfer, 1927-1945

As the KMT looked to shape itself as a potential ruling party governing a modernizing China in the 1920s, the merits of accepting technical assistance from abroad were quite evident to its leaders. By the time the KMT established its government in Nanjing in 1927, for example, it had taken a considerable amount of technical assistance from the Comintern in the form of military and political advisers as well as the weaponry that it had used in its bid to gain control of the country. Although the faction of the KMT that ultimately led the new Nanjing government did not regard the Comintern as a reasonable source of further assistance, it did not take long for the new government to begin developing other networks through which China might acquire modern technology and knowledge. It would be inaccurate to suggest that the leaders of the Nanjing government were systematic in these efforts, but they nonetheless developed several patterns of interaction with foreign-trained Chinese and foreign states and institutions that would continue to serve them well over the long run.

Over the course of the Nanjing Decade and during the Sino-Japanese War the KMT established patterns that it continued to employ even after it relocated to Taiwan. It constructed institutions to promote the modernization of China’s scientific and technical sphere, including agriculture and industry; it recruited talented and skilled technicians, many of whom were trained overseas, into leading positions in these institutions; it established cooperative relationships with foreign governments and foundations through which knowledge and technology could be transferred; and it developed structures that would facilitate overseas training.

Academia Sinica

Even as it constructed its new government, the KMT created a new academic research institution, Academia Sinica, that party leaders imagined would have the potential to attract highly trained Chinese students back to China from the US, Europe and Japan to serve national needs. An early dimension of the KMT’s approach to technology transfer, therefore, was an emphasis on recruiting highly skilled and foreign-trained Chinese talent into state-sponsored institutions. These researchers and scholars would bring to the service of the state the fruits of the training they had received abroad. In so doing, the state tapped into a desire on the part of many of the intellectuals who had studied abroad in the early decades of the twentieth century to use their knowledge to strengthen and modernize China. One such group of intellectuals was the Science Society of China, which was organized by a group of Chinese students studying at Cornell University in 1914. When these young scholars established the new journal Science later that same year, they did so with the hope that it would “promote science, encourage industry, authorize terminologies, and spread knowledge.”¹ The Nanjing Government hoped to capitalize upon the desire of foreign-trained Chinese intellectuals to spread the knowledge with which they had returned home. Although the technology transfer that took place in Academia Sinica and other state-sponsored academic research institutions did not necessarily yield direct or immediate results for China’s industrial or agricultural development, it nonetheless helped to transform the broader scientific and social scientific research and instructional environment in which technicians who went on to work in more applied fields were trained.

The NEC and the NRC

The Nanjing Government also constructed two economic development commissions in which research and development activities were undertaken by technicians in the employ of the state. The National Economic Commission (NEC) was established in 1931 by a group of reform-minded KMT leaders at odds with Chiang Kai-shek. It planned and implemented projects to develop China’s economy, particularly in coastal regions. The NEC’s primary goal was to end Chinese dependency on foreign manufactures and to encourage the development of domestic manufactures. To help accomplish this goal, it undertook projects ranging from highway construction and water management to agricultural development, particularly in cotton cultivation and sericulture.

The National Resources Commission (NRC) was initially a secret group, created in 1932 to help Chiang Kai-shek make plans to develop China’s economy in preparation for war with Japan. Its primary role was to manage state-owned enterprises such as industries and mines, and in so doing it oversaw a considerable amount of technology transfer and diffusion of technical expertise. By 1933 the NRC was not only employing “chemists, geologists, and engineers; it also trained them, granting domestic scholarships for future service and sending individuals abroad (for example to foreign mining institutes) to study.”² NRC director Weng Wen-hao, himself a foreign-trained geologist, believed that the best way to pay for the technical assistance that China needed was to expand Chinese exports, and so he began to plan the “exploitation and export of mineral deposits” that would pay for the upgrading of state-owned enterprises.³ The NRC’s plan was to simultaneously “recruit foreign assistance and establish an independent industrial base.”⁴

In 1936 the NRC devised and began to implement a three-year plan that it administered in cooperation with Germany’s state-operated industrial development agency, Hapro. The plan was drafted with German assistance and all of its projects fit into a broad framework of Sino-German economic exchange. German firms would provide machinery and technical expertise for a particular set of Chinese industries including a steel mill, a coal liquification plant, a nitrogen plant and machine and electrical manufacturing works. Germany would also provide technical assistance for a set of mining and oil drilling projects. The Chinese would pay for these services with their tungsten and antimony mines, and with the manufacture of ferrotungsten.⁵ Owing to the outbreak of the Sino-Japanese war, the plan never reached completion, but parts of it were well underway by that point, and it serves as a good example of Sino-foreign economic cooperation that involved the transfer of a range of technologies.

Although cooperation with Germany broke down during the wartime period as Germany looked increasingly to Japan as its East Asian partner, the KMT continued to look abroad for scientific and technical assistance for military and industrial development. It sought foreign aid and training and it also examined foreign institutional models as it considered how best to develop its scientific and technical infrastructure. As Qian Changzhao, vice secretary of the NRC, observed in a 1942 speech, China would have to depend upon foreign cooperation to effectively build its industrial base in the post-war era. In the same speech, however, Qian also expressed his concern that it might not be easy to get the sort of cooperation that China most needed, since it was in the interest of the foreign powers to keep Chinese industry operating at a basic level rather than developing in more technologically advanced directions.⁶

The NRC and foreign assistance during World War II

The NRC, the Ministry of the Economy, and the Ministry of Education all actively sought to capitalize on foreign alliances to enhance their Science and Technology (S&T) capacity. Private, non-governmental organization and foreign government aid were all important sources of scientific and technical information and exchange during the wartime period. The China Foundation provided more than US $2 million for science teaching and research pro fessorships during the war.⁷ The United Nations Relief and Rehabilitation Administration (UNRRA) financed S&T education and research in China between 1944 and 1947. Both the UN and the US sent foreign advisors in fields such as medicine, engineering and agriculture, many of whom offered courses and seminars at Chinese universities. The US provided fellowships for Chinese students and educators to study in the US,⁸ and UNRRA sent educational equipment and books on medicine, agriculture and engineering to universities and technical colleges.⁹ Of the US government, the NRC requested publications and films on a variety of topics. Among the publications supplied by the US government were numerous scientific and technical journals, and educational films on topics such as animal fertilizer, the art of auto repair and railroad construction.¹⁰ Just how detailed the information in these films was is unclear, but both the films and the journals would have given researchers and perhaps even the general public access to foreign knowledge that might otherwise have been hard to come by. The NRC also requested France to assist with the construction of a coking plant, and at least one hydro-electric plant, and to provide instruction on methods for prospecting underground materials.¹¹

In addition, the NRC’s National Bureau of Industrial Research (NBIR) sent groups of engineers to the US from 1943–1945 to learn new techniques, get training, engage in technology transfer and establish relationships with American firms. This training program resulted from an offer by S.D. Ren, a Chinese-American Vice President of the Universal Trading Corporation in New York who wrote to the head of the NBIR to offer help. Ren was quickly enlisted to find places in American firms for “twelve technical experts along twelve different lines . . . [who would be] . . . sent to United States to visit factories and research institutions to study specific technical problems.”¹² Clearly, the intent of the program was to spread its impact as widely as possible by sending only one engineer in each of twelve fields. The participants were placed in factories and research institutes in fields as diverse as automotives, ceramics, vegetable canning and paper manufacturing. Y.T. Ku, Director of the NBIR, hoped that they would “acquire...

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures
• List of tables
• Notes on contributors
• Introduction
• 1 The KMT and science and technology, 1927-1980
• 2 The evolution of Taiwan's economic miracle 1945-2000: personal accounts and political narratives
• 3 Taiwan's techno-hybrid development model: Taiwan's industrial policies for high-technology sectors 1975-2012
• 4 Global reorganization of the IT industry and the rise of Greater China
• 5 Divergent engagements: comparing the roles and strategies of Taiwanese and mainland Chinese returnee entrepreneurs in the IT industry
• 6 Spatial clustering and organizational dynamics of trans-border production networks: a case study of Taiwanese IT companies in the Greater Suzhou region, China
• 7 The cross-strait economic relationship's impact on development in Taiwan and China: adversaries and partners across the Taiwan Strait
• Conclusion
• Index