Saxenian wanted to illustrate how some of the contradictions of the Internet play themselves out in China. She said that “things are moving very fast on the production side and the political side” and that she’s interested in the role that overseas Chinese will play in the growing knowledge economy.

One example is that every major Chinese city has “science parks” – basically a high-tech office building(s) that are modeled after the innovation center of Silicon valley. So clearly the government sees the importance of innovation in the knowledge economy, but she’s skeptical about the path they’re taking.

China has not stopped creating state-owned industries. China talks about the growing venture capital industry, except that its all government money. So the country is still working out the details. It sees the promise, but Chinese politics are still playing a huge role.

There is a new potectionism in China. Standards are being created for every arena of high tech production. It wants to protect its own makers of RFID (radio frequency ID), CDs, etc., rather than lose to companies in Taiwan or the U.S. So that may cause conflict in a global economy.

China is on the edge of over-capacity in many industries, like mobile phones. Could also happen in the IC industry. The real competition may not be in the manufacturing, the place that the knowlege economy is going to grow is in content/design/engineering. This is where politics is going to meet the Internet in a big way. And this is where overseas Chinese (especially those who have returned) will play a huge role. They are bringing creativity and know-how – and opening up policy discussions.

Her favorite example: “little smarties” (mobile phones, very cheap) were started by foreign-educated Chinese. Sells $2 billion/year and employs over 5,000. When they first started, the government wasn’t going to allow it because it was old technology. But. little by little, the founders sold these phones city by city. And finally the government backed off the policy. “No encouragement, but no interruption” was the official line. So policy reform can happen, especially when technology meets local needs. Returnees who can meet the demands of the local market will have a place.

QUESTION: Asked Saxenian to compare the open-source software situation in China to India.

Saxenian said she understands the desire to set local standards. China and India are both inextricably linked to the global economgy – and now they want to play it by their rules. Open-source software can be globally collaborative (and has a lot of democratic potential) but the presumed politics of open-source software are not inherent to the technology.

QUESTION: Has the standardization process created new trade barriers?

Yes, and it will be fought on those terms by the WTO.

QUESTION: If China sends students to school in the U.S. won’t they lose contact with the network of scholars here?

Dean Schell answered that, currently, there are more opportunity for Chinese students to go find work back in China. That may change, but right now, there are opportunities in there. That’s not how it used to be. It used to be “you either left China or you stayed in China.” That’s not the case anymore.

Saxenian added that students are more than able to maintain communities in both places.