China has ambitious goals, including a quadrupling of the 1980 industrial and agricultural output by year 2000. Progress so far has been above that rate (about 7 percent), primarily because a loosening of controls has freed a latent strength in the economy. New technology has made only a minor contribution but will be of increasing importance in the future. Goals for economic growth will not be met without improved technology to modernize industry and to alleviate constraints in energy, transportation, and communications. Technology transfer can foster not only an increase in production, but also an increase in the quality of products. Modern industrial equipment can easily surpass the quality levels of the antiquated equipment typical of Chinese factories. Exposure to modern management practices, which technology transfer often entails, broadens the Chinese manager’s concepts of what can be accomplished and how. Coupled with these new tools has been the realization of the need for quality in products if China is to compete well enough in world markets to earn the foreign exchange to continue buying technology. However, China’s modernization does not yet appear to have reached the point where improvements in one sector lead to improvements in others. There have, of course, been many examples of successful assimilation of specific technology transfers, but there have also been many cases of failure or incomplete success. For instance, computers and other modern equipment sometimes remain unused because of a lack of expertise or an adequate supply of a necessary input, such as electricity.