Episode 33: EP33 - 'The Logic of Technology Transfer Policy in Rising China' with CWP Fellow John Minnich

China and the World Program's Podcast

Technology transfer policies have long been an important and controversial element in China's foreign economic policy toolkit. What explains Chinese authorities' use of these measures, and why do they refrain from issuing them in some strategic high-technology sectors? I examine China's efforts to accelerate its economic rise through technology extractors, defined as policies that condition foreign market access on technology transfers to domestic firms. I argue weak enforcement capacity and China’s position in global value chains (GVCs) constrain its bargaining power over foreign investors, limiting the use of technology extractors even in highly strategic sectors such as semiconductors. Case studies and analysis of a new industry-level dataset from 1995-2015 suggest that strategic industries account for most of the increase in China's use of tech extractors after it joined the World Trade Organization in 2001. However, when China occupies an intermediate position in global production networks, its reliance on foreign firms to drive exports and associated employment prevents it from issuing these measures. My findings illuminate how GVCs reshape the politics of bargaining over technology transfer between states and foreign investors, and how position in production networks influences the strategic choices behind China’s economic rise. Scaling the Commanding Heights: The Logic of Technology Transfer Policy in Rising China John David Minnich is a CWP fellow for the 2023-2024 academic year. He is a PhD candidate in Political Science at MIT, where his dissertation examines how China's position in global production networks shapes its pursuit of foreign technology transfers in strategic industries. Starting in Fall 2024, John will be an Assistant Professor of International Political Economy at the London School of Economics and Political Science. Prior to MIT, John worked in political risk analysis and lived and studied in China for over two years.