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If I was in china's position and so much is at stake, how can I go towards engineering all the tech from scratch when I can reverse engineer existing tech from west?
You wouldn't and you shouldn't. You should copy. It's what I would've done also. It's just what it is.
It's also the foundation of the US economy. Look up the cotton gin patent some time. And the early days of Hollywood.
And textile production and the industrialization of New England.