China Not Ready Yet to Compete in IT with U.S.

LASVEGAS?China is closing the technology gapwith the U.S. every year, but it will be manyyears before it challenges the U.S. for dominance of the technologymarket, according to Fred Hu, co-head of Investment Banking for China at Goldman Sachs.

The country is alsoimproving human rights conditions and vows to resume a human rights dialoguewith the United States over its "sweat shop"policies?particularly in light of the upcoming Beijing Olympics. However,slowly churning human rights changes in China will still result in cheaper ITmanufacturing prices for U.S. companies, Hu told an audience, Feb. 26, atGoldman Sachs 2008 Technology Symposium here in Las Vegas.

"China has been making great strides ina lot of areas. It’s making large strides in IT to close the gap with the U.S., but that gap remains very, verybig," said Hu. "There are reasons to think one day China will become of the leaders intechnology?there is the human capital [quotient] where every year China trends 600,000 graduates inengineering. That’s by far the greatest number of engineers. So there is anabundance of human capital. And there is the social aspect?.but I haven’t foundanything event remotely compatible to Microsoft. Is it in five years[competitors will emerge]? I think even longer."

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