This reverse flow of intangible assets helps explain why the export-driven development strategy is such a powerful one. And it also helps explain why China, in particular, has been so focused on holding down the value of the yuan, and so reluctant to switch to domestic-driven growth.

via Supply Chains and the Transfer of Intangible Assets « Mandel on Innovation and Growth.

There’s plenty of evidence that China understands the value of these intangible assets.  There are lots of stories that support that, such as this one:

“BOE got the technology they wanted. All we got was layoffs,” said Hwang Pil-sang, a Hydis worker.

via In Carmaker’s Collapse, a Microcosm of South Korea’s Woes – NYTimes.com.