Abstract
China transformed its economy by shifting from technological nationalism to a more pragmatic strategy of developing national capabilities in conjunction with multinational corporations. Consistent with this transformation, China has revamped its industrial and technology policies to become a major producer of computer hardware and a major market for computing products. In 2000, mainland Chinese purchased more than seven million PCs, while computer hardware production grew to $23 billion. China's policies clearly drew on the developmental approach of other Asia-Pacific countries that became leaders in the global computer industry through the strong support of government industrial and technology policies. China has likewise become a major force in the global PC industry, as both the most attractive growth market and as a large producer. New challenges loom as China joins the World Trade Organization and faces more pressure to open its market to foreign competition. The paper considers the regional and national environment.
Highlights
By carefully nurturing its domestic computing industry through tightly controlled partnerships with foreign manufacturers, China has become the fourth-largest computer maker in the world
China’s shift from technological nationalism to a more pragmatic strategy of developing national capabilities in conjunction with multinational corporations has transformed its economy. Consistent with this transformation, China has revamped its industrial and technology policies, moving from an isolationist approach aimed at achieving technological independence to become a major producer of computer hardware and a major market for information technology products
REGIONAL AND NATIONAL ENVIRONMENT A combination of factors influenced the growth of China’s computer industry, including the roles played by domestic PC makers, foreign multinationals, and Taiwanese contract manufacturers
Summary
By carefully nurturing its domestic computing industry through tightly controlled partnerships with foreign manufacturers, China has become the fourth-largest computer maker in the world. Because it is unwilling to give foreign firms control of its computer market, the government directly limits the role of foreigners in telecommunications services, data communications, and Internet services In computer hardware, it promotes domestic firms through direct and indirect support such as favored treatment in government procurement and access to technologies developed in state R&D institutions. China’s desire to develop strong domestic computer makers with indigenous technological capabilities echoes that of Japan, Korea, and, to a lesser extent, Taiwan Each of these economies has provided financial and technical resources to domestic companies and, in some cases, protected them from foreign competition. China’s GNP is about US$1 trillion, while in purchasing power parity terms, it is more than US$4 trillion
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