Western firms have already passed much of their technology on to the Chinese in order to gain a foothold in China's energy market. But China's approach has little to do with intellectual property rights and a lot to do with using federal policies to foster innovation. Shellenberger and Nordhaus suggest the U.S. would be wise to follow suit.
A reader (alias "bystander"), however, points out that IP laws are relevant in that the U.S. enforces them and China does not:
What's sobering (to me at least) is that so many Western firms have rushed headlong into exposing their technology in exchange for a relatively transient opportunity to access the Chinese market. There's no reason to think that Western firms will get and keep a long-term foothold there. The evidence suggests that once a local capability grows up, local firms will be favored and the access that foreign firms enjoy will dry up.
The article above says "private firms recognize that some of their intellectual property will spill over in the same way that Silicon Valley firms borrow or steal from each other," but I think this obscures the enormous difference between the quite effective IP protection that is afforded by U.S. law and court.
Bystander also seems to be speaking from experience:
I had a ringside seat when the first high-tech firms fell over themselves to get access to the Chinese market, particularly the market for cell phones. They traded away enormous amounts of raw technology, employment, etc., in order to get access to the market. It was very cleverly negotiated by the Chinese and very clumsily handled by Western firms, if you ask me. The Chinese had the long term in view, the Western firms saw only a few years down the road. Ultimately what happens when you trade technology for access to a market is that you get access to the market for a few years, while local competitors build themselves up using the technology you have "transferred". After that, you are subtly or not so subtly pushed out of the market by local advantages, government preferences for local firms, etc. It's an awful tradeoff and it's heartbreaking to see it unfold time and again.
One of the firms I got to see up close in this game was Motorola. They had a huge advantage in cell phone technology, cellular infrastructure, etc., over the Chinese firms at the time. Now Huawei is eating their lunch not only in China but around the world, in the infrastructure realm, and local phone manufacturers have made Motorola a relatively small player in the handset market in China.