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Selling China Long-Term Innovation Assets For Short-Term Profits: Not a Good Strategy

Selling China Long-Term Innovation Assets For Short-Term Profits: Not a Good Strategy

Bruce Nussbaum, writing on businessweek.com, in an article titled “Selling China Long-Term Innovation Assets For Short-Term Profits: Not a Good Strategy” says that many US companies are parting with their intellectual property in exchange for doing business in China. Is this is a good bargain or are US companies creating formidable competition in return for short term profits?

A recent traveler to Beijing, Bruce Nussbaum reports a conversation where China is demanding a complete technology transfer in return for allowing a company access to the vast Chinese market. The story referred to a case where a businessman said that China was demanding the entire electric car charging technology in return for giving access to the Chinese market. US companies are parting with their cutting edge technology at next to no cost.

China is leveraging its market size for cutting edge technology. However, this is also possible because the Chinese are presently the only large scale market for many products such as high speed trains and electric vehicles.

The Chinese government is following a well thought out strategy of acquiring the best technology. There is a well planned, coherent policy in China that both private and state owned businesses follow to build national strength. This is a serious innovation game that China is playing.

US companies on the other hand are selling their family jewels for short term gains. However they really do not have any other options.

Note: The preceding is a summary of an article found though our research, and is provided here with editorial comment for members only. Please see the full article at the following link for full original content.http://www.businessweek.com

The New Asia Innovation Team

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