Entry Strategy For A Small High Technology Enterprise Into The Chinese Market

Author : Yu Zhou
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Download or read book Introduction written by Yu Zhou and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In contemporary China (and perhaps in most developing countries), the question was never whether, but how the state can play a role in technological development,. Evans contends that the state should assist entrepreneurship rather than simply acting as entrepreneurial police and regulators. This can be challenging. Simply identifying quality entrepreneurship (state-owned enterprises, privatized state enterprises, private entrepreneurs, foreign firms, etc.), is difficult, let alone the details of how best to evaluate the effectiveness of government assistance. This is an area the papers in this special edition diverge in their assessment of the effectiveness of state in China's high-tech market places. Fan's paper argues that Chinese state was instrumental and strategically flexible in supporting the domestic enterprises in the telecommunication sector. The roles of state differ significantly in different stages of market and enterprise development. Governments actively provided the initiation, research and development, market access and financial support in the infancy of domestic firms and later gradually withdrew direct support from firms that became self-sustaining. Instead, the state turned its focus to R&D projects that are of strategic national importance. While Fan's paper portrays the Chinese state as strategic and mostly benevolent, Zhang's paper conceptualizes the state-enterprise relations as patron-client relations with unequal power positions. He argues that China's highly concentrated and spatially biased internet service industry was a result of state control of key technological resources. The non-state actors were forced to cultivate and cater to the interests of the state whose relationships are more exploitive than supportive in nature. Zhou's paper, on the other hand, emphasizes the limited reach of the Chinese state in the domestic technology market. She focuses on China's technology standard policies. Though the state has concluded that China must get involved in global technology standards, it has encountered considerable difficulties as it seeks to coerce foreign firms to conform to China's national mandate and as much trouble coordinating unified movement among Chinese enterprises. She argues that due to the fact that the standard strategies are motivated primarily by commercial rather than ideological incentives, China's government is unable to dictate the course of action without having to deal with commercial interests that generate internal contradictions and external resistance. Sun's paper provides additional evidence demonstrating that the role of the state is limited in its ability to attract foreign R&D investment, which he argues is instead largely a product of China's growing market and enormous high-quality labor pool. Early attempts by the government to attract foreign R&D investment through preferential policies, political persuasion and other measures resulted in largely failed efforts and at best a handful of foreign showy R&D facilities designed more to publicly appease the Chinese government than to conduct serious R&D. Today, a growing domestic market and China's high-quality low cost labor supply is at the heart of foreign companies' decision to establish such R&D facilities in China. Together, the four papers, show that the role of the Chinese state is multiple and contradictory, enormously powerful, indispensable, yet not without limits. These findings allow us to interrogate and refine the model established by Evans in which we conceptualize a more complex interdependence between the state and domestic capital under a globalization context. State and enterprise relations in China appear to be dynamic in nature. While the state continues to control crucial resources and often plays favoritism toward selected indigenous firms, these favors or resources are also mediated through an intensely competitive market. The state/capital alliance is being created, but they are not firmly established as China transitional context continues to generate new actors and the rules of game are constantly contested. Though the special edition does not claim to have a consensus, we hope that it will contribute to and invite additional research on technology change in China. Many areas worth further exploration including China's national or regional innovation system, its changing regime of science and technology, and the multiple forms of foreign collaboration with Chinese local firms. As China emerges as one of the key players in global technology development, understanding its motivation, approaches, institutions, capacity and the implications becomes more pressing for the international community.