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To economic policymakers, the real meaning of becoming a strong economy lies beyond getting citizens to spend more and expanding the service industry. The next Chinese miracle, at root, will mean becoming a first-rate technological power. China's road ahead was on display in Shanghai in early December, when a San Francisco--based company called the Cleantech Group hosted a venture-capital forum aimed at driving investment dollars toward alternative-energy entrepreneurs on the mainland. Opportunities appear to be plentiful, despite the dim economic environment. Forum attendee Patrick Tam, CEO and general partner of Beijing Tsing Capital, says he is investing heavily in Chinese clean-tech companies--most recently in a Beijing firm called NetPower Technologies, which makes a battery that helps power-hungry businesses reduce their electricity consumption. "The government is just letting the venture-capital market rip in this field," says Tam. "It's exactly what needs to happen to develop new technologies and new jobs in China. I think in a lot of ways this is our future."
It's a compelling vision: China as a high-tech powerhouse. But making it come true will take years, and there are major obstacles. Idea theft is the biggest. Though the country has made progress in strengthening intellectual-property rights over the past several years, rampant piracy of software, music and other intellectual properties remains a huge issue. "People with the ideas have to be protected," says consultant Rosen. "They've moved on this because they know without it, a high-tech China remains a dream."
The next miracle, in other words, will be harder to pull off than the last one. That doesn't mean it won't happen. Consider what in 1978 constituted a "rich" eligible bachelor in urban China: he had to own a radio; he had to be able to buy his bride a fashionable wristwatch made by a state-owned company no one would ever confuse with Rolex; and he had to commute on the coolest set of wheels available--a bicycle called the Phoenix.
In just three decades, China has remade its world. For all the challenges the country now faces, is it wise to bet against it happening again?