U.S.-China state visits always make for great television. That level of stiltedness is rarely seen by an American television audience, and in China, the visit is always spun to show how great it is as a nation.

Watching the footage of Presidents George Bush and Hu Jintao, especially when Hu stepped from the podium too early, then winced when Bush grabbed him to pull him back (that will play as aggression in the provinces), the issues of the trip began to come into focus.

The U.S. still wants China to increase the value of its currency. That's nice if you're a U.S. merchant selling goods there. But really, the issue is a political tool. The fact is that Americans and many of their counterparts elsewhere in the world like the well-made, inexpensive goods we get from China, including DVD players and clothes, just to name a couple.

Perhaps Mr. Bush and others should concentrate on the value of things instead of their cost. Case in point: the plethora of research and development centers built in China by major tech companies.

In theory, the centers make sense. Rather than H1-B a whole bunch of Chinese engineers and programmers, hire them in their country (perhaps even their home city), pay them locally, and use lower tax rates and low land costs to reap the benefits. That's fairly simple.

But more often these centers are also gigantic political tools, representing hundreds of millions of dollars in investment. Sometimes they pop up in less developed areas, or spots well away from a city-center designated for construction. The idea is intended to be win-win, with the government satisfying its goals of development and employment, and the company getting the facility they want at a cut rate.

So far it seems the Chinese side is the only one winning. Previous Microsoft Corp. public statements indicate the company invests US$100 million per year in its research arm here, Microsoft China Research and Development Group. But what can it show for that money, other than localization of Microsoft products, software that Redmond is quick to point out sells poorly due to piracy?

Microsoft is far from the only company in China to pursue this path. Google Corp. has just joined the parade, with boss Eric Schmidt winging over from the West Coast to open it. The company didn't put a price tag on its R&D facility, located in Beijing, but was happy to announce that in Chinese, the company will now be known as "Gu Ge," or "Harvest Song," which immediately made it an online laughing stock in this country.

Where is the value in all these R&D centers? Where is the D? What was the last major announcement to come out of one of these centers that had an impact outside of China's borders, or even within? Otherwise, are companies simply throwing money at a problem for which they have no other solution -- entering the world's biggest potential tech market?

Like the current U.S. administration, foreign -- and especially U.S. tech firms -- continue to demonstrate they know the price of everything and the value of nothing in China.

IDG News Service

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