The inside Story of China's High-Tech Industry: Making Silicon Valley in Beijing. Yu Zhou

Abstract

The Inside Story of China's High-Tech Industry: Making Silicon Valley in Beijing, by Yu Zhou. Lanham: Rowman & Littlefield, 2008. xii + 201 pp. US$75.00 (hardcover), US$29.95 (paperback). At last we have an insider telling the story of China's Silicon Valley story in English! Yu Zhou's book, The Inside Story of China's High-tech Industry: Making Silicon Valley in Beijing, centers the study primarily on the information communication technology (ICT) industry, one of the most dynamic industries in and the world. This is the first comprehensive account of high-tech industrial development in Zhongguancun (ZGC) - the Beijing district with the greatest concentration of universities and research institutes in China. As an inhabitant of ZGC from middle school in the late 1970s till graduate school at Peking University - a major university located in the heart of ZGC - Zhou has built a remarkable network of informants. This allows her to unveil a truly inside view of the extraordinary and complex dynamics of ZGC. Though there are a few good journalistic books about ZGC published in Chinese by embedded journalists, and the early writers do provide a good insider view of the industry, many of these are not innovative but repetitive. More importantly, these nonacademic books lack the theoretical insights of Zhou's book. The book is written mainly for academics in geography, urban studies, innovation studies and economics, yet it is quite readable for the general public interested in China's economy and technological development. Chapters 2-4 detail the three phases of ZGCs development. Chapter 2 provides a historical overview of the period from the 1950s to the 1980s when ZGC was established. Chapter 3 explains the critical role of multinational companies (MNCs) in shaping technological competition and fostering innovation among local firms. Chapter 4 argues that the Internet boom is helping to consolidate the telecommunication sector in Beijing because ICT firms have to win approval or favor from the decision-makers in Beijing. This makes the city a favorable location for the industry (p. 67). Chapters 5-8 analyze the major actors in ZGC, namely the minying companies (privately owned companies freed of direct intervention from the Chinese government), multinational companies and companies established by overseas-trained Chinese entrepreneurs. Chapter 5 details the leading role of minying companies, which capitalize on a tech-savvy labor force, the collaborative networks with universities and the dense alumni networks embedded in ZGC. At the same time, minying companies also pay dearly for this legacy of the planned economy - lack of trust, weak enforcement of the legal framework and minimal protection of intellectual property rights. Chapter 6 analyzes competition and collaboration between local firms and the MNCs. Zhou asserts that the numerous MNC Research and Development centers are generally cut off from extensive interaction with the local firms, so formal technology transfer to local firms is minimal. Chapter 7 argues that the Chinese returnees act like MNCs in maintaining ongoing technological, capital and market connection with the global technology centers, but unlike MNCs they are well integrated into the research and business communities in China (p. 141). However, Zhou cautions that the state's preferential treatment of Chinese returnees has created unfair competition and prompted resentment among the local firms. Chapter 8 discusses the efforts of the Chinese state in exploiting the technological standard strategy to promote local firms. …