The Origins of Technological Catch-up in China

2021 ◽  
pp. 31-61
Author(s):  
Keun Lee
Keyword(s):  
Technology Transfer ◽  
Joint Venture ◽  
Knowledge Diffusion ◽  
Telecommunications Industry ◽  
Foreign Companies ◽  
Foreign Products ◽  
Market Shares ◽  
Catch Up ◽  
Market For Technology ◽  
Fixed Line

Chapter 2 examines the growth of technological capabilities in the telecommunications industry in China, with a focus on Huawei and ZTE. These companies grew rapidly by localizing the production of fixed-line telephone switches, which were earlier imported or produced by foreign joint venture (JV) companies. While the market used to be completely dominated by foreign products in the 1980s, four locally owned companies caught up with the foreign companies in market shares and became absolute leaders by the end of the 1990s. The catch-up can be explained by three factors, namely, (1) the famous Chinese strategy of technology transfer called “trading market for technology,” (2) the knowledge diffusion from the first foreign JV, Shanghai Bell, to the local R&D consortium and then to other locally owned companies including Huawei, and (3) the government’s explicit promotion measures.

Licensing as a Central Structure of Technology Transfer Agreements. Joint Venture and Franchising Agreements

2021 ◽  
Author(s):  
Manuel Guerrero Gaitán
Keyword(s):  
Economic Growth ◽  
Technology Transfer ◽  
Joint Venture ◽  
Market Imperfections ◽  
Sources Of Knowledge ◽  
Transfer Of Technology

Abstract R&D is one of the most important sources of knowledge and economic growth worldwide, and technology transfer is the principal means to access this knowledge. Nevertheless, market imperfections, externalities, and abusive behaviors have been used by some jurisdictions to justify the enactment of regulations on different contractual categories frequently used to implement this transfer of technology.

China issues new cybersecurity review measures

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Lester Ross ◽  
Kenneth Zhou
Keyword(s):  
National Security ◽  
Strategic Alliances ◽  
Chinese Government ◽  
Self Assessment ◽  
Extensive Experience ◽  
Content Type ◽  
Foreign Companies ◽  
Foreign Products ◽  
Doing Business ◽  
Business In China

Purpose To describe and analyze the implications of the new Measures (the “Measures”) for Cybersecurity Review jointly promulgated on April 27, 2020 by twelve Chinese government departments led by the Cyberspace Administration of China (CAC). Design/methodology/approach Defines the scope of the Measures, explains the functions and obligations of critical information infrastructure operators (each, a CIIO), outlines the self-assessment and cybersecurity review process and discusses the implications of the Measures for foreign companies doing business in China. Findings The Measures impose an obligation on CII operators to apply for a cybersecurity review when they intend to procure network products and services that present or may present a national security concern. Such review will focus not only on national security and data leakage concerns, but also on supply-chain security concerns. The cybersecurity review will likely further the decoupling between China and the US. Practical implications While the Measures are not formally intended to discriminate against foreign products and services, the promulgation of the Measures will have a significant impact on foreign companies that supply network products or services to CII operators in China. Originality/value Practical guidance from lawyers with extensive experience in advising Chinese, US, European and other companies on laws and regulations related to competition, cross-border investments, joint ventures, strategic alliances and international trade matters.

scholarly journals THE EMERGENCE OF THE AUTOMOTIVE INDUSTRY IN CHINA

2021 ◽  
Author(s):  
Olga Krause ◽  
◽  
Nadiya Golda ◽  
Iryna Pinyak ◽  
◽  
...  
Keyword(s):  
Automotive Industry ◽  
Automobile Industry ◽  
Economies Of Scale ◽  
Joint Venture ◽  
Developed Countries ◽  
Engineering Industry ◽  
General Motors ◽  
Small Range ◽  
Foreign Companies ◽  
Car Market

The engineering industry, including the automotive industry, belongs to the strategic branches of the country’s economy and to a large extent determines the level of development. The Chinese automobile industry dates back to 1953, and the first automobile factory, the First Automobile Works (FAW), was started in Beijing. Over the next few years, several more car factories were established in Nanjing, Khanhai, Jinan and Beijing. The requirements of funds, technologies and automotive modernization stimulated the attraction of external investment. A number of restrictive measures have been adopted to curb external competition, reduce car imports and attract innovative technologies, including high tariff and non-tariff barriers, screening, and restrictions on foreign capital, Limiting market share to foreign companies. When signing the joint-venture agreement, the Chinese side insisted on technology transfer and subordination to the Chinese leadership. Volkswagen first built a car factory in China. Today almost every progressive car company is represented in the Chinese car market, such as Mercedes-Bens, Ford, General Motors, Suzuki, Daihatsu, Honda, Subaru, Citreon, Toyota. Most of them have partnerships with one of China’s top three car manufacturers. American, European, and Japanese automakers see China as a promising market as demand for vehicles in the US and Europe shrinks. To the Chinese automobile market, the cars are made according to the requirements of the local consumer – conservative, with high-quality design, low and middle price segment. Since 2009, foreign automobile companies have accounted for 85% of the Chinese car market. About 60% of the cars sold in China are locally produced. However, China’s automobile industry is highly fragmented and mostly consists of small companies that produce a small range of components. Such production is labour-intensive with relatively low use of advanced technologies compared to car manufacturers in developed countries, often lacking economies of scale. Research expenditure accounts for a large part of the expenditure structure. Most companies produce low-tech parts with significant import presence.

Catch-up in the IT Service Sector and the Role of the Government in China

2021 ◽  
pp. 156-171
Author(s):  
Keun Lee
Keyword(s):  
Chinese Firms ◽  
Foreign Companies ◽  
Security Software ◽  
Business Software ◽  
Catch Up ◽  
Barrier To Entry ◽  
The Government ◽  
Latecomer Firms ◽  
Role Of The Government

Chapter 7 analyzes the market and technological catch-up of indigenous Chinese firms in two information technology service sectors, namely, games and business software (enterprise resource planning (ERP) and security software) and focuses on two aspects. The first aspect is about how latecomer firms have been able to access and learn from foreign knowledge bases and acquire their innovation capabilities. The second aspect is the role of the government and regulation in the catch-up process. Indigenous firms in China have selected different learning and catch-up strategies in different technological regimes. For the online game sector, where imitation is easier and incremental innovation is more important than radical innovation, Chinese firms started with handling the publishing (or distribution) of games developed by foreign incumbents and later secured in-house game development capabilities by imitating the products of global leaders. In the business software sector, where imitation and creative innovation are difficult, Chinese firms acquired third-party technologies through mergers and acquisitions and then differentiated their products by taking advantage of local specificities. In general, intellectual property rights (IPRs) are critical in the business of these two segments. Despite the entry barrier effect of IPR protection by the foreign incumbents, the latecomer firms discussed in this chapter seem to have circumvented the barrier to entry and learning and to acquire their innovation capabilities. However, such learning and acquisition would not have led to commercial success without government regulation against foreign companies, such as business restrictions in online gaming and exclusive procurement of indigenous products in applied software (ERP and security software). Such restrictions against foreign companies were a critical constraining factor against their market share expansion in the Chinese market.

Institutional Transfer

2019 ◽  
pp. 526-530
Author(s):  
Hans-Jürgen Wagener
Keyword(s):  
Technology Transfer ◽  
Social Context ◽  
Diffusion Process ◽  
Eastern Europe ◽  
Social Values ◽  
Social Institutions ◽  
Transition Process ◽  
Eu Membership ◽  
Catch Up ◽  
Political Economic

This chapter examines institutional transfer, a special form of the knowledge diffusion process and an imitation of best practices that follows the model of the somewhat better-studied technology transfer. Central to the concept is the deliberate reference to a foreign model. The most common motive for institutional transfer is catch-up modernization and the urgent need for developed institutions. There are numerous examples of such transfers: Japan, Turkey, but also postcommunist Eastern Europe, where expectation of EU membership speeded up the transition process. A central problem is the fact that political, economic, and social institutions are embedded in a social context. They correspond to certain social values. Where they are too far apart from the latter transplanted institutions are hardly adaptable.

Patterns of Diversification and Specialization in International Trade

2021 ◽  
pp. 298-316
Author(s):  
Önder Nomaler ◽  
Bart Verspagen
Keyword(s):  
International Trade ◽  
Technology Transfer ◽  
International Technology Transfer ◽  
Total Entropy ◽  
Income Levels ◽  
Product Range ◽  
Catching Up ◽  
Catch Up ◽  
Pattern Of Specialization ◽  
Point Of Departure

Changes in the composition of production refer not only to the structure of production but also the composition of exports. The structure of exports is the topic of this chapter. The point of departure for the chapter is the well-known U-curve pattern of specialization proposed by Imbs & Wacziarg (2003). The chapter is informed by technology gap theories of catch-up. Due to international technology transfer laggard economies can start catching up. In this process they will tend to diversify. The main aim of the chapter is to test whether the U-curve hypothesis is valid. It makes an interesting distinction between specialization within product groups and specialization between product groups. For this, the chapter develops a new measure of entropy, which decomposes within and between group degrees of specialization. A rising trend for total entropy is observed over the whole product range. The curve tends to flatten at higher income levels, but it does not decline suggesting that there is no U-curve.

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