Who’s Behind China’s Evan A. Feigenbaum High-Technology “Revolution”? How Bomb Makers Remade Beijing’s Priorities, Policies, and Institutions For seven years after the Tiananmen Square tragedy of 1989, virtually all signiªcant issues in U.S.- China relations became subordinate to concern about human rights and China’s suppression of political dissent. Yet in the three years since China’s 1996 missile exercise in the Taiwan Strait, high-technology issues have come increasingly to replace human rights at the center of the contentious and often politicized discussion that characterizes current debate about U.S.-China policy. Recent allegations concerning satellite exports and nuclear espionage, in particular, demonstrate the centrality of high technology to the debate about China’s place in the world. This makes it especially important to explore links that may bind China’s national technology and industrial policies to its ap- proach to security and development. How has the Chinese understanding of this linkage changed as the past priority of militarized growth has given way to the rapid expansion of a commercial economy since the late 1970s?1 Who is responsible for making important technology decisions in China? How have Chinese technology leaders thought about the relationship between technology and national power during the past twenty years? Has political change affected this worldview? Finally, how has renewed contact with international technical circles since the 1970s affected the Chinese approach to national high-tech strategy and investment? Evan A. Feigenbaum is a Fellow at the Belfer Center for Science and International Affairs at Harvard University’s John F. Kennedy School of Government. He is the author of Change in Taiwan and Potential Adversity in the Strait (Santa Monica, Calif.: RAND, 1995). This article is based, in large part, on extensive discussions conducted between 1993 and 1999 with specialists in the Chinese People’s Liberation Army, China’s military industrial system, the Chinese defense science and engineering complex, and some civilian technicians. For comments on earlier versions of this material, I am grateful to David Bachman, Wendy Frieman, John Holdren, David Holloway, Charles Wayne Hooper, Nicholas Lardy, John Wilson Lewis, Michael May, Barry Naughton, Michel Oksenberg, William Perry, Condoleezza Rice, Robert Ross, Ezra Vogel, Xue Litai, and four anonymous reviewers for International Security. 1. On the past priority of military goals, as well as the impact of military elites, institutions, and ideas on China’s Mao-era (1949–76) political economy, see Evan A. Feigenbaum, “Soldiers, Weap- ons, and Chinese Development Strategy: The Mao-Era Military in China’s Economic and Institu- tional Debate,” China Quarterly, No. 158 (June 1999). International Security, Vol. 24, No. 1 (Summer 1999), pp. 95–126 © 1999 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. 95 Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/016228899560068 by guest on 29 September 2021 International Security 24:1 96 This article surveys one of the most crucial aspects of China’s recent high- tech transition—the formulation of national investment priorities in areas that the central government and its technical advisers have deemed to be of stra- tegic importance to China’s national security and economic competitiveness. Such efforts by no means represent the only aspect of China’s recent high-tech policy. Indeed, strategic technology programs are just one of ªve main pillars that together support China’s twenty-ªrst-century technology agenda.2 But strategic technology efforts are crucial for four reasons. First, these programs represent perhaps the most explicit connection be- tween national security and economic development issues in China’s policy- making process. In addition, they constitute a critical link between purely domestic economic policy agendas and the international strategic concerns so central to Chinese decisionmakers. Second, for much of the period since 1987, strategic technology program- ming has comprised the largest source of direct central government ªnance for research and development (R&D) in priority sectors such as space, lasers, and supercomputing. This brand of public investment is not channeled through the intermediary agency of ministry and state corporation budgets, or via the major government banks. It is organized around its own administrative system with a unique set of procedures. National programming is caught up with a wide-ranging debate about the proper role of publicly targeted, as opposed to risk and equity, ªnance in shaping national competitiveness. Third, strategic programming focuses primarily on applied research and medium-term results. National high-tech programs thus lay bare the main military, civilian, and dual-use technical goals of the Chinese state for the early twenty-ªrst century. For this reason, the contents and procedures of such programs are revealing of Chinese aims. Much of what we know about Chi- nese goals reºects the writings or statements of Chinese political leaders, generals, scientists, and businesspeople on technology issues. An under- standing of recent strategic technology programming can supplement this discussion by shedding light on points at which concrete investment choices meet rhetorical bluster and wishful musing. Finally, for most of the 1990s, strategic technologies programming has been the purview of China’s most prominent technicians and industrial planners. 2. The other four pillars are (1) acquisition of foreign systems through technology transfer in joint venture, licensing, and coproduction arrangements; (2) promotion of commercial initiative in scientiªc laboratories; (3) creation of a budding venture capital industry to steer equity investment toward innovative technology start-ups; and (4) promotion of a greater role for industrial enter- prises in research and development (R&D). Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/016228899560068 by guest on 29 September 2021 Who’s Behind China’s High-Technology “Revolution”? 97 Today younger specialists in their thirties and forties, many with direct expe- rience in entrepreneurial ventures overseas, have begun to inºuence Chinese R&D debates. But nationally directed strategic approaches still stand front and center on the agenda of the most inºuential members of China’s science and technology (S&T) establishment, including government planners, prominent university scientists, and principal industrial cadres. This article advances three main arguments. The next section suggests that leading military-technical elites, not civilians, provided the initial push that made possible China’s shift from narrowly weapons-focused innovation and investment strategies to more comprehensive strategic technology efforts. The second section surveys the substance of the policy agenda that emerged from this large-scale shift of strategy. This is China’s top-priority critical technologies effort, established in 1986–87 and known as the “863 program” for the year (1986) and month (March) of its origin. A concluding section argues that, although a program such as 863 has real promise, it reºects persistent problems that plague government efforts to close the relative gap that separates China’s high-tech industries from international standards. Most important, 863 repre- sents the persistence of state-centric, highly nationalistic approaches to tech- nology indigenization that contrast starkly with entrepreneurship and the globalization of technological knowledge. A Crisis of Conªdence Yields New Strategies To understand the major changes in Chinese high-tech industrial policy since the late 1970s, one must ªrst understand that militarization skewed priorities in national technology strategy away from comprehensive development dur- ing the 1950s and 1960s. Weaponization initially became the main focus of China’s high-tech system because of Korean War logistics and equipment problems that dramatized China’s comparative technological backwardness. When China came under repeated threat of external attack during the 1950s, that sense of backwardness intertwined with a survival-state mentality to fuel the growth of a political constituency favoring massive, nationally directed strategic weapons and technology programs. Yet these programs required economic trade-offs, and by 1960–61, China’s decision to pursue the most advanced retaliatory systems, not just a bare minimum nuclear deterrent, brought strategic weapons advocates into debates about national priorities. This agenda survived initial challenges from civilian and conventional weap- ons–oriented constituencies. But as the 1970s ended, the emphasis on strategic Downloaded from http://www.mitpressjournals.org/doi/pdf/10.1162/016228899560068 by guest on 29 September 2021 International Security 24:1 98 weapons as a basis for national high-tech efforts began to erode for three reasons. First, China’s overall strategic environment underwent a critical change. After rapprochement with the United States and Japan in the early 1970s, China cleared away two potential threats while checking Soviet pressure through new strategic partnerships. By 1978, the post-Mao leadership under Deng Xiaoping (1977–97) felt sufªciently conªdent to bet publicly on twenty to ªfty years of comparative security after nearly thirty years in a survival-state posture. This newfound conªdence would enable a focus on the