Contradictions on Technology Contracting and National Security?

Rakesh Bhandari bhandari at Princeton.EDU
Fri Mar 17 10:24:00 PST 2000

This is from Robt Gilpin's The Challenge of Global Capitalism (Princeton, 2000):

"The rapid growth and potentially immense size of the Chinese economy has made China a magnet for FDI [foreign direct investment]. American, Japanese, and other MNCs have been involved in an intense competition to establish themselves firmly in the Chinese market. The attractiveness of investing in their market has not been lost on Chinese officials, and they have frequently imposed very costly performance requirements on potential investors. American critics fear that firms, eager to gain a foothold in the Chinese market, could give and in fact have given the Chinese access to vital American technology, especially dual use technology; that is, technology with military as well as economic significance. For example, China refused to purchase aircraft from Boeing unless Boeing agreed to produce aircraft in China; this coproduction agreement obviously increased Chinese capabilities in aircraft design and manufacture. Although Boeing and other American firms deny that they are giving away vital secrets to the Chinese or anyone else, critics charge that American firms are selling out US commercial and security interests to gain corporate profits."

p. 180-81

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