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JOINT VENTURES, TECHNOLOGY TRANSFER AND TECHNOCRATIC ORGANIZATION IN NATIONALIST CHINA, 1928-1949 William c. Kirby Introduction. During the first half of the 1980's, over 2,000 Sino-foreign joint venture agreements were entered into by Chinese state enterprises and foreign companies, involving a potential US $6 billion in foreign equity investment. These are but the most visible part of an extensive series of technology transfer programs that include licensing agreements, technical assistance agreements, and various forms of •countertrade• (including barter, counterpurchase, offset and compensation trade arrangements). This so-called •open policy [kaifang zhengce] is a central element in China's present development strategy.[!] Although it is too early to judge the relative successes or shortcomings of these programs, we may presume that their results will do more than determine China's ability to meet stated economic goals; their achievements and limitations, and the changes they induce (or do not induce) in Chinese economic and political life will do much to define future patterns of Chinese development and Sino-foreign relations. Future historians who study technology transfer to China in the 1980's will also be analyzing a Chinese political and economic system in evolution.[2] Popular writers often emphasize the novelty of current Chinese policy, but historians know better. All Chinese governments since the mid-19th century have attempted to import and employ foreign technology for state purposes. None did so more aggressively and consistently than the Nationalist government that ruled the mainland from 1927 to 1949. The Nationalists inherited from the late Qing and early Republic a legacy of failed efforts at planned technology transfer as well as significant legal restrictions on Chinese economic sovereignty; they bequeathed to their successors on the mainland approaches, institutions and individual skills that were prerequisites for the PRC's early success in Sino-foreign technology transfer during the 1950s, and, in certain instances, models for contemporary developments. An overview of technology transfer policies in the 1930s and 1940s, focusing on joint ventures, not only serves to point out certain continuities in modern and contemporary Chinese history; it also reveals an earlier Chinese regime in transition, and furthers our understanding of the changing nature of Nationalist rule on the mainland. The Nationalist Inheritance Sun Yatsen's blueprint for Chinese industrialization called for the participation of foreign capital in enormous Sino-foreign cooperative enterprises under Chinese state ownership.[3] However, there were no historical precedents for Sino-foreign cooperative 3 ventures on the scale of Sun's schemes, and no strong state institutions for their planning and management. Certainly the history of earlier joint Sino-foreign enterprises could not have warranted Chinese confidence in this form of undertaking. Institutionally, the lack of central government interest and ability in coordinating technology transfer, the politically necessary linkage of industrial ventures with high officials (as, in •official oversight and merchant management• [guandu shangban] enterprises), and the relegation of technically competent individuals to extrabureaucratic positions were all severe impediments to enterprise planning and management. These weaknesses, combined with international power politics, ensured a Chinese junior partnership in Sino-foreign joint ventures of the late nineteenth and early twentieth centuries. This was most clearly the case in railway joint ventures, such as the Chinese Eastern Railway, whose Chinese president was only a figurehead in a Russian-run operation.[4) It was less universally true in Sino-foreign coal mines, but until the 1920s it was common for Chinese partners to be •front men• for foreign interests. In these enterprises, partnership emerged more commonly out of perceived political necessity than complementary economic interests, and wherever possible, foreign interests--which after all had the right to establish wholly foreign-owned enterprises on Chinese soil--sought to maintain absolute management control.(S] Thus Sino-foreign banks, like the Russo-Asiatic Bank and the Banque Industrielle de Chine, encouraged Chinese government participation as a minority shareholder, but allowed it no control.[6] As Noel Pugach has shown, there were important attempts at truly cooperative ventures under Chinese law during the first years of the Republic, but the three most ambitious of these--the Sino-American Pacific and Eastern Steamship Company, a petroleum development joint venture between Standard Oil and the government of Yuan...


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