From Chaser to Maker.(China's emerging role as an economic power)

Wang Dongsheng adjusts his glasses and gazes at the tiny computer chip lodged in a green plastic board. Emblazoned on the chip's casing is the word THUMP, an acronym for Tsinghua University Microprocessor. Wang, a 37-year-old computer scientist at the university, drew on "100 percent Chinese talent" to build the chip, which could serve as the brains of a personal computer or server made in China. The project is part of an ambitious effort to kick-start China's electronics industry, with an eye to supplying a good portion of the potentially vast home market. "We can't just rely on technology from other countries," says Wang. "We have to develop our own talent."

Intel executives probably aren't losing sleep over the THUMP chip just yet--it's roughly comparable to Intel's Pentium II, introduced in 1998 and since surpassed by several later models. But the electronics push is yet another example of how China is putting itself in the driver's seat in key industries. "One of China's strategies is setting standards," says Adam Segal, an expert on Chinese research and development at the Council on Foreign Relations. "They're tired of being a technology chaser and want to be a technology maker." From fuel-cell technology to the farthest frontiers of medical research, China is establishing norms that, by sheer dint of its size and prosperity, may one day have to be adopted worldwide.

The main factor behind this growing influence is money. For the first time in a quarter century, China has become something more than merely a dream of vast markets. According to the American Chamber of Commerce, a survey of U.S. companies working in China showed that the profits of 42 percent exceeded worldwide averages in 2002. "China is suddenly the profit earner for many of them," says a Western diplomat based in Beijing. "That means they'll focus more and more on the requirements of the Chinese market." China's preference for freely available Linux software over Microsoft's, for instance, has already bolstered the cause of Linux in the West. Motorola's newest A760 smart phone-- featuring Linux OS and Chinese- handwriting recognition--debuted recently in China, the world's biggest cell-phone market. A vast homegrown chip industry could shape the development of semiconductor technology and ...