Catch Up And Radical Innovation In Chinese State Owned Enterprises

This original book is a unique and original in-depth study on how, in the past decade, Chinese State-Owned Enterprises (SOEs) have achieved technological innovation in the large infrastructure sectors. It reveals a 'new world' of Chinese innovation, showing that SOEs are willing to innovate and are also more than capable of doing so. Based on findings from first-hand data and years of observations, this book shows how the innovation ecosystem perspective incentivises and facilitates Chinese SOEs' innovation and highlights the entrepreneurial role of the government. Using the examples of UHV Power Transmission, mobile telecommunication standards, high-speed trains, and nuclear electric power, the book exhibits the complex determinants of SOEs' success in radical technological innovations within the large infrastructure sector. Chapters also demonstrate the innovation process of SOEs, the unique innovation model of China, as well as its advantages and disadvantages. Catch-Up and Radical Innovation in Chinese State-Owned Enterprises will be a useful resource for academics in research disciplines such as development studies, innovation and entrepreneurship, and Chinese studies. It will also aid entrepreneurs, businesses and managers who intend to collaborate with Chinese SOEs, to better understand the trends of SOEs' engagement in radical innovation and the potential opportunities for broadening their international collaborations.

This original book is a unique and original study on how, in the past decade, Chinese state-owned enterprises (SOEs) have achieved technological innovation in the large infrastructure sector. It reveals a ‘new world’ of Chinese innovations, showing that SOEs are willing to innovate and more than capable of doing so. Based on findings from first-hand data and years of in-depth observations, this book shows how the innovation ecosystem perspective incentivizes and facilitates Chinese SOEs’ innovation and highlights entrepreneurial role of the government.

This book develops new theoretical perspectives on the economics and politics of innovation and knowledge in order to capture new trends in modern capitalism. It shows how giant corporations establish themselves as intellectual monopolies and how each of them builds and controls its own corporate innovation system. It presents an analysis of a new form of production where Google, Amazon, Facebook, Apple and Microsoft, and their counterparts in China, extract value and appropriate intellectual rents through privileged access to AI algorithms trained by data from organizations and individuals all around the world. These companies’ specific form of production and rent-seeking takes place at the global level and challenges national governments trying to regulate intellectual monopolies and attempting to build stronger national innovation systems. It is within this context that the authors provide new insights on the complex interplay between corporate and national innovation systems by looking at the US-China conflict, understood as a struggle for global technological supremacy. The book ends with alternative scenarios of global governance and advances policy recommendations as well as calls for social activism. This book will be of interest to students, academics and practitioners (both from national states and international organizations) and professionals working on innovation, digital capitalism and related topics.

China's extraordinary economic development is explained in large part by the way it innovates. Contrary to widely held views, China's innovation machine is not created and controlled by an all-powerful government. Instead, it is a complex, interdependent system composed of various elements, involving bottom-up innovation driven by innovators and entrepreneurs and highly pragmatic and adaptive top-down policy. Using case studies of leading firms and industries, along with statistics and policy analysis, this book argues that China's innovation machine is similar to a natural ecosystem. Innovations in technology, organization, and business models resemble genetic mutations which are initially random, self-serving, and isolated, but the best fitting are selected by the market and their impacts are amplified by the innovation machine. This machine draws on China's multitude manufacturers, supply chains, innovation clusters, and digitally literate population, connected through super-sized digital platforms. China's innovation suffers from a lack of basic research and reliance upon certain critical technologies from overseas, yet its scale (size) and scope (diversity) possess attributes that make it self-correcting and stronger in the face of challenges. China's innovation machine is most effective in a policy environment where the market prevails; policy intervention plays a significant role when market mechanisms are premature or fail. The future success of China's innovation will depend on continuing policy pragmatism, mass innovation, and entrepreneurship, and the development of the 'new infrastructures'.

This work is a continuation of the authors' earlier publication, "The China Miracle: Development Strategy and Economic Reform". The authors review the historical evolution of the state-owned enterprises, analyze the current problems, and suggest the direction for future reforms.

China’s extraordinary economic growth is inspiring research from a wide spectrum of fields to explain the phenomenon: What are the primary drivers of China’s economic growth? Can it be sustained? Can the Chinese business model be emulated by other countries? What long-term effects will China’s economic growth have on the global economy? In this volume, Chun Liao explores these issues in the context of firms’ governance structures, arguing that China’s dual business system of state-owned enterprises and private enterprises is uniquely suited to the challenges of economic development in the twenty-first century. On the one hand, China’s state-owned enterprises are characterized by state coordination, bank financing, insulation from the stock market fluctuations, and incremental productivity-enhancing innovations, which are similar to the firms in the business systems of coordinated market economies (like Germany and Japan). On the other hand, China’s private enterprises are characterized by private (often family) ownership, hard budget constraints, profit maximization, and more risky radical innovation, which are similar to the firms in the business systems of liberal market economies (like the US and the UK). Based on the state controlling shareholding in the state sector, the boundary between the state sector business system and private sector business system is clear. This dual type system is contrasted with those in liberal market economies and those in coordinated market economies, where only one type system dominates. Drawing from empirical data and industry analysis over the past 15 years, Liao provides unparalleled access to the dynamics of the Chinese economy, including ownership structure, management design, labor-management relations, business infrastructure, capitalization (including role of banks and financial institutions, private investment, and FDI) in both the public and private sectors. In the process, she analyzes both opportunities and challenges that result from China’s dual business system, particularly in regard to innovation, core competitiveness, and sustainable growth in both state strategic technology-based industries and private high technology industries . The result is an approach that sheds new light on China’s economic performance and its rise as a player on the international stage.

The transition from a catching-up style economy to an innovation-driven economy poses a major challenge for China. This book examines the major issues at stake, outlines developments in crucial business fields and industries, and discusses the roles of top-down politics and bottom-up entrepreneurship. It focuses in particular on the institutional foundations of innovation, arguing that successful innovation relies on the favourable interplay of business, politics, and society, and that comprehensive institutional and organizational changes will be required in China in order for innovation to succeed. Overall, the book assesses how far China will be able to depart from the Western paradigm of successful innovation regimes and create its own innovation system with Chinese characteristics.

This title offers an in-depth look at the status and trajectories of innovation in major Chinese technological sectors such as machines, tools, railroad, automobile, information, communication technology, and wind and solar energy. The book expands our understanding of the industrial foundations of China's attempt to become an innovation nation.