EU and China’s Tech Rise
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EU and China’s Tech Rise

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China is catching up quickly in terms of technological innovation, and indeed is on the verge of becoming a global leader. This reality has sparked increasing concern over the future of Western leadership in science and technology.

The United States has approached the problem mainly from a national security perspective, trying to limit scientific cooperation with China in order to avoid the transfer of technologies that also have potential military applications. Europeans, in contrast, have turned science and technology cooperation with China into one of the pillars of the so-called strategic partnership that was established between the two sides back in 2003.

While the United States worries about security, economic considerations are the major driving force behind the overall European strategy of engagement with China, and not just in the technology field. China is now the EU’s second biggest trading partner behind the United States, while the EU is China’s No. 1 trading partner. The financial crisis has further strengthened the economic relationship, with successful export-oriented economies like Germany becoming ever more dependent on the Chinese market.

Simultaneously, Beijing is lending a helping hand (and lots of cash) to debt-stricken southern European member states such as Greece and Spain, in an effort to stabilize the euro area economy and thus China’s largest export market.

But it isn’t just about the money. Most Europeans believe that by engaging China on a broad range of issues, they can help to further open up China and steer its social and economic development in a direction that’s desirable for both sides.

The EU’s policy of dialogue and engagement has undoubtedly suffered its fair share of setbacks, for example on human rights in light of the current crackdown in China on critics of the Communist Party leadership. But in other areas, this policy has been quite successful. Economically, EU companies have reaped great financial benefits, despite ongoing problems with regard to the protection of intellectual property rights, forced technology transfers and market access for European companies. EU-China science and technology cooperation is another success story, and indeed is one of the few areas where the strategic partnership offers some real substance.

For Beijing, the main motivation has always been to acquire high technology that’s essential for the country’s economic development – hardware as well as knowhow. China is striving hard to lessen its technological dependence on foreigners by strengthening its indigenous innovation capacities. However, for the time being, transfers of foreign technology remain essential to China’s economic modernization efforts.

Beijing regularly praises the EU for being China’s largest source of technology imports. According to the Chinese Ministry of Commerce, the EU accounted for 30 percent of China’s overall technology imports in 2009. As Chinese high-tech companies are more and more active in European markets, China’s engagement might become increasingly driven by market access considerations in the future. Gaining access to the Chinese market remains the No. 1 motivation for Europeans, with the EU Chamber of Commerce in China estimating that the Chinese government procurement market alone is worth $1 trillion.

European companies want a piece of that pie. In addition, European researchers are keen to benefit from rising Chinese spending on research and development, especially at a time of austerity measures and spending cuts at home. Chinese R&D expenditure grew by an impressive 22 percent annual average between 2006 and 2010. In addition, Europeans also want to tap into the Chinese science and technology labour force, which is growing rapidly in both quantity and quality.

Last, but not least, Europeans expect that scientific collaboration will make technological developments within China more transparent to the outside world. And while one flagship cooperative project has failed spectacularly, namely collaboration over the Galileo global navigation satellite system, the science and technology relationship remains beneficial for both sides.

Regardless of the motivations, China’s relentless efforts to become a global leader in innovation seem to be paying off. For example, China’s output of research publications has grown more than four-fold between 1998 and 2008, from just over 20,000 papers to more than 112,000 papers. Globally, China ranks second only to the United States by annual output. The number of patents registered in China has also risen considerably, with an average total volume annual growth rate of 26.1 percent between 2003 and 2009. Reuters expects that Chinese patent filings will overtake Japan and the United States this year (having surpassed Europe in 2005), making China the global innovation ‘leader.’ While this says nothing about the quality of Chinese R&D, it certainly suggests a step in the right direction.

Both the EU and the United States should respond to this challenge by improving their own innovative capabilities, instead of following a policy of scientific containment. American attempts to limit scientific cooperation with China will prove as futile and economically harmful as its efforts to constrain Beijing’s military modernization drive. Europeans should therefore maintain their cooperative approach, while maintaining awareness of its potential security implications.

 

Oliver Bräuner is a Researcher in the China and Global Security Programme of the Stockholm International Peace Research Institute (SIPRI). His research focuses on Chinese foreign and security policy, primarily on China-EU relations and China’s international science and technology cooperation. 

Comments
6
Belinda
December 13, 2011 at 09:49

It’s called a self fulfilling prophecy. The containment of modern scientific knowledge which the West imposes on China will only fuel their desire to excel. China is civilization and cannot be contained! When China wakes, it will shake this world!

coockound
August 31, 2011 at 23:40

I am delighted to suggest that I’m probably the newest new member in here and as i i am looking forward to chatting with every body throughout here soon.

bhupinder
August 1, 2011 at 03:44

this is whole western xenophobia, which they consider their domain,,being surplus in money and good motivational govt , any country can excell,hitler did in 1935,stalin in 30 to 50,chinese are not surprise,, there is will,there is way in west ,lot of employee are for sale, they can sell to any one who pay them good commision ,or money,chinese have money ,will and way to produce different,becuase there product have immense demand readymade in their own marketing network, what they can produce, western could not even imagine,chine govt is fully motivational,those give high incentive to innovation,whole heartedly they always sucess,science inovation is craze,competition,if it start at grass root level,scientic knowledge automatically develop,chinese are wonderful they will match to any one in within 20 years,being dictorial govt with public welfare ,they will surpass any one imagination, it is universal those have consumerable market they can dictate the term and condition for any joint venture,chinese are doing the same which was done in 100 years ago ruthlessly by english,spain,germany,,good luck to chine

John Chan
July 28, 2011 at 21:39

@ashleyhk:
You surely have a strong racist undertone in your way of thinking that “only the West can invent and only the West can succeed.”

The article said China had made a surprising progress in innovation front, even the EU is impressed, yet you are bashing China out of jealous and resentment.

You said “The vast majority cover Chinese ‘innovations’ that make only tiny changes on existing designs.” It proves that you are completely ignorant about patents. In order to be patentable, the invention must not be ‘obvious’, it must be completely ‘novel’. Thus if the patent examiner finds there is ‘prior art’ in the open and patent literature or the know-how has been widely used, the patent application will be rejected forthwith. There is no way that China could file foreign technology sold to China.

You used “triadic” patent filings numbers to slander China’s contribution in innovation. It is well known fact that only deep pocketed international corporations will fill patents in that three countries (Europe, Japan and US) because the costs involved; majority patents are filed domestically due to the cost and benefit considerations.

You further accused China that “Chinese legal system that doesn’t recognize foreign patents.” It is preposterous slandering. Patent filing is a regional affair; no country or region will recognize a patent without being filed with that country or region first. Forcing a foreign patent on a nation without due process is a violation of that nation’s sovereignty. You have the same mentality like Goolge, demanding extraterritorial jurisdiction right as an entitlement.

You said “a Chinese filer ‘patents’ a foreign invention in China with the goal of suing the foreign inventor for ‘infringement’”, that is what the American and Japanese did to the Chinese when China first opened its door in the 1980s. That time Chinese had no clue about patent right and commercial implication, they were so eager to attract foreign investments, they showed the foreign investors everything on the believe that the better they were the more chance they got investment. Yet the investors filed Chinese inventions and sent legal letters to the Chinese inventors to pay royalty to use their own inventions.

You must be joking about the developed nations’ ignorance about protecting their patent rights. They are vicious and predatory regarding the protection of their IP rights.

It seems you are technology illiterate, because it seems to you that stealing somebody’s invention is as easy as borrowing a pen. Apply, Microsoft, RIM, Samsung, etc, steal other people’s invention as part of their business activity, they even try to use their enormous wealth to rob other people’s inventions without paying for it.

ashleyhk
July 28, 2011 at 02:31

I hope this guyr “research” is not taken too seriously. This from todays AWSJ.

The “inputs” for innovation are impressive. China’s R&D expenditure increased to 1.5% of GDP in 2010 from 1.1% in 2002, and should reach 2.5% by 2020. Its share of the world’s total R&D expenditure grew to 12.3% in 2010 from 5.0% in 2002, placing it second only to the U.S., whose share remained steady at 34-35%. According to UNESCO, China now employs more people in science and technology research than any other country.

At first blush, data on “outputs” also look impressive. According to the World Intellectual Property Organization, Chinese inventors filed 203,481 patent applications in 2008. That would make China the third most innovative country after Japan (502,054 filings) and the U.S. (400,769).

Yet there’s less here than meets the eye. Over 95% of the Chinese applications were filed domestically with the State Intellectual Property Office. The vast majority cover Chinese “innovations” that make only tiny changes on existing designs. In many other cases, a Chinese filer “patents” a foreign invention in China with the goal of suing the foreign inventor for “infringement” in a Chinese legal system that doesn’t recognize foreign patents.

A better measure is to look at those innovations that are recognized outside China—at patent filings or grants to China-origin inventions by the world’s leading patent offices, the U.S., the EU and Japan. On this score, China is way behind the others.

The most compelling evidence is the count of “triadic” patent filings or grants, where an application is filed with or patent granted by all three offices for the same innovation. According to the OECD, in 2008, the most recent year for which data are available, there were only 473 triadic patent filings from China versus 14,399 from the U.S., 14,525 from Europe, and 13,446 from Japan. Data for patent grants in 2010 by individual offices paint a virtually identical picture.

Starkly put, in 2010, China accounted for 20% of the world’s population, 9% of the world’s GDP, 12% of the world’s R&D expenditure, but only 1% of the patent filings with or patents granted by any of the leading patent offices outside China. Further, half of the China-origin patents were granted to subsidiaries of foreign multinationals.

Krypter
July 27, 2011 at 13:54

A policy of cooperating with China is incredibly foolish. They are sucking you dry, stealing every technology that isn’t nailed down, and concealing their own technology development behind secretive corporations and paranoid government regulations. It’s a losing relationship for Europeans, and you will suffer for it in 10 or 20 years.

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