From Nationalism to Pragmatism: IT Policy in China

Since 1978 China has been transforming its centrally-planned socialist economy into a more mixed market system. China has also largely abandoned its nationalist technology strategy aimed at achieving self-reliance in favor of a more pragmatic strategy of importing advanced technologies and directing domestic R&D toward commercial purposes. This change has been evident in China's policies toward information technology (IT). The government has given up its goal of producing all classes of computers and is now focusing on increasing IT use and promoting production of personal computers, peripherals and software. In addition, China is planning massive investments to expand and modernize its telecommunications network. These policies have resulted in rapid growth in IT use and production, but China still faces serious challenges in trying to develop a coordinated strategy for IT production, use and infrastructure. These include bureaucratic infighting, problems with privatization of IT enterprises and concerns about loosening control over the flow of information. The rapidly expanding Chinese market offers tremendous opportunities for foreign companies, but they are finding China to be a difficult place to do business.