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Case Study on China's Export Boom

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Case Study – Week 2 seminar China's Export Boom
By Oded Shenkar

China has replaced the U.S. as the world's top tech exporter. While no cause for panic, it's a wake-up call for the complacent. According to the Organization for Economic Cooperation & Development (OECD), China has overtaken the U.S. to become the world's largest exporter of informationand communications-technology goods. Crossing the largely symbolic threshold should put to rest outdated notions of China as a manufacturer and exporter of cheap T-shirts, though the country won't give up its thriving garment exports as it steps up production of laptop computers and memory chips. Indeed, China's ability to hold on to the labour-intensive segments of the global marketplace as it climbs the technology ladder is one of the unique features of the country's ascent -- and a remarkable source of resilience for its economy. It's also a factor in the country's $100 billion-plus trade surplus with the rest of the world and double that figure with the U.S. KNOWLEDGE PLAYER. It's easy to dismiss the importance of China's taking the lead in technology exports. Its tech goods contain substantial imported content, not to mention foreign technology, be it transferred, licensed, or "borrowed." Roughly 60% of exports are made by foreign-invested enterprises, and the percentage progressively rises with the technology level. So is China merely an export platform, a convenient low-cost base for the world's multinationals, which in turn retain core knowledge and capabilities, farming out the simple, low-value parts of the value chain? Not really. China has absolutely no intention of remaining an assembler and proving ground for someone else's knowhow and advanced capabilities. Rather, it's gearing up to become a producer of indigenous technology and a global knowledge player on the scale of Sony (SNE) and Samsung. If this

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