Building an Information Technology Industry in China

Government support, privatization, and a removal of barriers to foreign participation have been crucial for China's information technology (IT) success. But the degree and nature of this success can be easily misunderstood when China's performance is taken out of its global context. Data from the OECD show that China briefly overtook the United States as a high-tech exporter in 2005, but the Chinese government reported that 90 percent of these exports were made by foreign firms operating in China. China's leaders, who in the 1980s began to lay the groundwork for a modern IT industry, believed that China would be more secure if it did not depend on foreign IT and could instead use IT products made entirely in China. This report shows why their goal will be difficult to attain in an increasingly integrated and globalized industry.

James A. Lewis is director of the CSIS Technology and Public Policy Program.