Technology Transfer to the China Machine Tool Industry

Due to its fast growth China is rapidly becoming a focus for globalized manufacturing strategies and is now one of the world's largest markets for technology. The international transfer of manufacturing technology has also contributed significantly to the recent sharp increase in the rate of China's industrial development. The Chinese machine tool industry, for example, has exhibited an annual growth of more than 12% between 1980 and 1995 and is now one of the largest markets for machine tool technology. Technology transfer agreements are not motivated only by the willingness of foreign suppliers but also by the desire of Chinese enterprises to acquire technology. One of the major problems in technology transfer is how to establish the value of the technology. In many cases partnerships between foreign companies and Chinese enterprises fail to become established because the value of technology cannot be agreed by both sides. It is therefore important to establish a method for valuing transferred technology. This paper outlines the concept of a technology valuation model which is being developed using empirical data from the machine tool industry. It is based on research carried out in the UK and China, and draws on selected case studies of technology transfer in the machine tool sector supplemented by information obtained from questionnaire surveys carried out in both countries.