This paper reviews recent evidence on technology transfer to the rapidly growing Western Pacific region, where most developing countries have adopted relatively liberal policies towards the importation of technology and equity capital. In recent years Japan has emerged as a major supplier of technology to the region. Moreover, there have been important changes in the international technology market, which has become larger and more competitive. Nevertheless, many aspects of technology imports have been criticised, including the conditions attached to its sale, and its appropriateness for low income countries. The arguments for limited regulation of technology flows are assessed and the economic and administrative difficulties pointed out. From the host country viewpoint, the policies influencing diffusion of technology within the country seem to be at least as important as the policies directly bearing on technology transfer from overseas.