ABSTRACT
This chapter has argues that one of the major reasons for China's decision to allow foreign participation in its economy was the expectation that such an "open door policy" would facilitate technology transfer. The American Motor Corporation case brought into sharp relief a plethora of operating difficulties that have plagued China's investment climate since the late 1970s. Beijing' s "open door" to trade, foreign investment, managerial expertise and imported technology constitutes the primary vehicle through which China seeks to make its presence felt. Two types of special enterprise categories were established: productive enterprises whose products are mainly for export and which can earn foreign exchange; and enterprises possessing advanced technology supplied by overseas investors that can be used to develop new products. The present thrust in Chinese technology import policy is characterized by a distinct move away from whole plant acquisition and a sharper focus on the import of "know-how.".
