I've highlighted this issue before.  U.S. taxpayers finance research and development in many, many ways:  tax credits for R&D, tax support of major universities, tax support for the defense budget, tax support for... a bunch of other stuff relating to promoting technological advancement.

The Chinese take our research in many, many ways: espionage, piracy, sending their students to U.S. Ph.D. programs with government high-tech contracts, state owned entities buying U.S. companies that are strategically important, and joint ventures. 

Joint ventures? Yes.  China conditions U.S. investment in their country upon the U.S. company transferring technology to their companies, often government controlled.  Baird Capital Partners learned this, as noted in a recent Wall Street Jounrnal China Business Briefing article. (I can't show you this, subscription only, but dated August 30, 2007).

Baird tried to set up a plastic molding company joint venture in China recently.

While reading the fint print of an agreement between Xaloy Inc. and a local manufacturer, Baird Capital came across a clause indicating that the Chinese entity planned to set up a sister company with access to Xaloy's proprietary technology.  Baird... slipped a noncompetition clause into the agreement and the other party pulled out.

Ask Microsoft, Intel and Google if they have transferred proprietary technology in return for permission to do business in China.

This is interesting.   And odd. 

China is adopting antitrust laws.  The U.S. is gutting its antitrust laws.

The law marks another step toward a market economy and away from a centrally planned economy in which a series of giant state-owned enterprises held vast and unchallenged monopolies.

China is moving away from central planning.  American agriculture is moving towards central planning by the bureaucrats at Cargill, Tyson, and Smithfield.

The law’s most controversial provision, added this summer, calls for the government to conduct more formal reviews of foreign purchases of Chinese companies based on their potential to harm national security, including economic security.

China wants to review and block foreign purchases for national security reasons.  The U.S. is endangering national security by selling off or outsourcing its major economic sectors relating to high technology (Seagate), defense, food production, investment (Blackstone) and basic manufacturing.

China has maintained most tariffs and export subsidies while appearing to cut them, merely by changing their names to value added tax charges on imports, and value added tax rebates on exports.  The U.S. unilaterally cuts tariffs even as virtually all its trading partners do the same switch-a-roo as the Chinese.

China has a fast growing economy, a huge credit surplus, and a huge trade surplus.  The United States does not.

Toys"R"Us has another China supply recall.  Lead aint was found in kids watercolor paints.  The supplier was Funtastic, a subsidiary of FPL Group in Hong Kong.   The paint set has crayons, pastels, colored pencils, bive pens, water colors and other art supplies.

Aurora Organic Dairy is a huge dairy farm in Colorado that produces both conventional and organic milk.  After complaints by the Cornucopia Institute and others, the USDA hasfound Aurora cannot prove its milk is really organic.  Andrew Martin of the NY Times reports on this story.  Aurora has to change its practices.  But it gained big market share, in the meantime, from small organic farmers.

USDA can't keep track of what is organic and what is not in America.  But the agency allows China to certify organic food too.  We really ought to look more into foreign organic.  There must be about a 5% chance that they are really organic.