Five reasons why China will rule tech

Recent development points to growing concern in Washington about China's tech moves, but here's why it may be unstoppable

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"Furthermore, only 2% of all U.S. 9th-grade boys and 1% of girls will go on to attain an undergraduate science or engineering degree. In contrast to these troubling numbers, Mr. Chairman, 42% of all college undergraduates in China earn science or engineering degrees," she said.

5. China is getting U.S. technology, all of it

In 2008, Sony Corp. closed what was identified as the last television manufacturing plant in the U.S., in Westmoreland, Pa. It shifted work to an assembly plant in Mexico, but the vast majority of TVs' electronics components are made in Asia. (Dell sources $25 billion annually alone in components from China, for example).

One year prior to the television plant's shuttering, Alan Blinder, a professor of economics at Princeton University and former adviser to the Clinton administration, told lawmakers at a congressional hearing that TV sets had become a commodity and that the loss of the manufacturing jobs was an indication of economic success, since it demonstrated that the U.S. had moved on to the production of higher-value goods.

"If we are to remain big exporters as the rest of the world advances, we must specialize in the sunrise industries, not the sunset ones," he said.

But Andy Grove, co-founder of Intel, wrote in an article this month for Bloomberg that he believes Blinder got it wrong.

The loss of the TV manufacturing wasn't a success, Grove contended. "Not only did we lose an untold number of jobs, we broke the chain of experience that is so important in technological evolution," he wrote.

China's goal is not to just build TV sets and computer components. It has established what it calls an indigenous innovation policy, meaning it wants Chinese-origin technology that is owned by Chinese companies.

This policy, "designed to encourage technology transfer and force U.S. companies to transfer R&D operations to China, will force U.S. companies to transfer technology in exchange for access to its markets," U.S. Commerce Secretary Gary Locke testified at a Senate hearing in June.

China's indigenous innovation policy may be showing results.

One Chinese-owned company, Dawning Information Industry Co., which makes servers for China's market and some foreign markets, just built the world's second-fastest supercomputer. The company includes a photo on its Web site of President Hu Jintao during a visit, illustrating the attention China's government is giving to supercomputing.

China built this system, which it called Nebulae, using Intel chips, but China has its own developing chip technology, and if it follows through on its innovation policy, it's only a matter of time before a Chinese-origin chip is used in future supercomputers.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at  @DCgov or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

Copyright © 2010 IDG Communications, Inc.

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