@misc{07d28c5cbbed4ac4b2fc25759c237e97,
title = "Enter the dragon: China's computer industry",
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. It has done so through a combination of industry promotion and entrepreneurial energy. New challenges loom as China joins the World Trade Organization and faces more pressure to open its market to foreign competition.",
author = "Kraemer, {Kenneth L.} and Jason Dedrick",
note = "Funding Information: Finally, having manufacturing capabilities inside Meanwhile, investment by Taiwan{\textquoteright}s PC makers has China is vital, both to avoid tariffs and the value-helped China become part of the global PC pro-added tax and to show a commitment to the duction network, while also increasing Taiwan{\textquoteright}s Chinese market. Such a commitment is needed if a economic linkages to China. company hopes to sell to government agencies and state enterprises, which make up most of China{\textquoteright}s large business and institutional markets. hina has become a major force in the global PC industry, as both the most attractive Implications for other developing countries C growth market and as a large producer. It China{\textquoteright}s success in developing its computer indus-has done so through a combination of industry pro-try has limited application to other developing motion and entrepreneurial energy that has taken countries. China has succeeded with an import-sub-advantage of the country{\textquoteright}s unique characteristics. stitution strategy that proved to be much less suc-New challenges loom as China joins the World cessful in India, Brazil, and Mexico during the Trade Organization and faces more pressure to 1980s. This success is due in large part to the size completely open its market to foreign competition. and dynamism of China{\textquoteright}s market, but other factors By now, however, China{\textquoteright}s PC makers are strong also played an important role. Chief among these enough to compete on an even footing in their were China{\textquoteright}s policy of exchanging market access home market. Some may also be ready to compete for foreign technology, requiring foreign multina-in other markets as well, potentially presenting a tionals to export much of their production, insist-new challenge to today{\textquoteright}s global PC leaders. ■ ing that foreign multinationals develop joint ventures with domestic companies, and letting Taiwanese companies set up production networks Acknowledgment in China to support domestic companies. Few, if This research was supported by a grant from the any, developing countries would have such desir-US National Science Foundation{\textquoteright}s directorates for able markets or be able to attract foreign invest-Computer & Information & Science Engineering, ment on terms so favorable to the host country. Information and Intelligent Systems, Computation On the other hand, other developing countries can and Social Systems, and the Alfred P. Sloan follow China{\textquoteright}s strategy of promoting computer use Foundation. to modernize their economy and create demand for We gratefully acknowledge the editorial assis-local firms. Also, China has focused on developing tance of Margaret Vona in preparing this manu-and exploiting national capabilities to support com-script. puter production and use. These capabilities include human resources, R&D institutions, and an infor- mation infrastructure, all of which can be upgraded References in most developing countries. Finally, while China 1. Yearbook of World Electronic Data, Reed Electron-has favored domestic firms, it has maintained a highly ics Research, Oxford, UK, annual editions and elec- competitive local computer market. This approach tronic databases, 1991-2001. benefits computer users and also helps domestic firms 2. J. Dedrick, and K.L. Kraemer, Asia{\textquoteright}s Computer Chal- prepare to compete in markets outside China. lenge: Threat or Opportunity for the United States China{\textquoteright}s computer industry policies have suc-and the World? Oxford Univ. Press, New York, 1998. ceeded in expanding both production and com-3. G.P. Goad and L. Holland, “China Joins Linux Band- puter use, taking advantage of domestic capa-wagon,” Far Eastern Economic Rev., 24 Feb. 2000, bilities as well as attracting leading multinationals p. 8. to produce in China. Although China{\textquoteright}s growing PC 4. Q. Lu, China{\textquoteright}s Leap into the Information Age: Inno- market has created opportunities for domestic and vation and Organization in the Computer Industry, foreign PC makers alike, the latter have seen their Oxford Univ. Press, Oxford, UK, 2000. market shares shrink dramatically, an outcome con-5. P. Lovelock et al., China{\textquoteright}s Golden Projects: Reengi- sistent with the government{\textquoteright}s desire to avoid for-neering the National Economy, Case 9-396-283,",
year = "2002",
month = feb,
doi = "10.1109/2.982913",
language = "English (US)",
volume = "35",
pages = "28--36",
journal = "ACM SIGPLAN/SIGSOFT Workshop on Program Analysis for Software Tools and Engineering",
issn = "0018-9162",
publisher = "IEEE Computer Society",
}