China has considerable technological capability already, especially compared with that of other developing countries, but progress has been very uneven. Military industries in particular have been favored with priorities for investments and personnel. Some of these industries have developed “pockets of excellence” that can compete in world markets. For example, China has built and launched its own experimental communication satellites and has offered to launch foreign satellites. The military sector has now been ordered to help the civilian sector, especially since many military factories are underutilized because of the recent lowering of defense budgets. If this expertise can be used effectively, it may have a substantial impact on civilian production and exports. Much of China’s civilian technology is outof-date, if not obsolete. The Seventh Five-Year Plan (1986-90) has set the acquisition of technology as a high priority, especially in the fields of transportation, electronics and computers, telecommunications, and energy. The plan calls for importing much of this technology. One of the “Four Modernizations”-the policy program for development–was to raise the level of science and technology. The others—agriculture, industry, and defense—also to a large degree depend on improvements in technology. Some of these improvements could be accom- -. plished by the purchase of modern equipment without technology transfer, but China has limited funds for imports. China could develop some technologies independently, but in general this would be much slower and less efficient than acquiring them from abroad