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March 23, 2007
China and technology
The Wall Street Journal has discovered an interesting idea -- Soon Made in China: High-Tech Products:
China is demonstrating a surprising ability to parlay its dominance in low-end manufacturing into a new strength in producing sophisticated high-tech goods.
Already the place where many of the world's computers and mobile phones are put together, it is expected to become home to a multibillion-dollar integrated-circuit plant run by Intel Corp., the world's biggest maker of computer chips.
The speed at which China is moving into more-complex manufacturing is a sign that its transition from a low-wage economy making cheap goods to a high-wage economy producing valuable ones may not be as difficult as once thought.
. . .
The electronics business is one of the main areas in which the transformation of Chinese manufacturing is taking place, and foreign investment is crucial for those changes. This deal also illustrates the force behind that transformation: The critical mass that China has built up in the labor-intensive, but relatively simple, assembly and manufacturing of many products is now allowing it to attract higher-value parts of those businesses.
. . .
The pattern in electronics is also seen in other industries. Chinese steelmakers have recently begun producing types of high-end processed steel that previously had to be imported. The car business has gone from near-total reliance on imported parts to heavy use of components made and designed at home.
So -- tell us something new. Many of us have been talking about the Chinese technological evolution for years. I am constantly surprised that people are surprised. There are many challenges facing the Chinese economy. But there is little reason to believe that they don't have the ability to transform from a low cost to a high-value added producer.
Posted by Ken Jarboe at March 23, 2007 9:33 AM
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