Alliance Capitalism, Innovation and the Chinese State

236 Pages·2015·0.84 MB·English

International Political Economy Series
Alliance Capitalism,
Innovation and the
Chinese State
The Global Wireless Sector
Victoria Higgins
International Political Economy Series
Series Editor: Timothy M. Shaw , Visiting Professor, University of Massachusetts,
Boston, USA, and Emeritus Professor, University of London, UK
The global political economy is in flux as a series of cumulative crises impacts its
organisation and governance. The IPE series has tracked its development in both
analysis and structure over the last three decades. It has always had a concentra-
tion on the Global South. Now the South increasingly challenges the North as the
centre of development, also reflected in a growing number of submissions and
publications on indebted eurozone economies in Southern Europe.
An indispensable resource for scholars and researchers, the series examines
a variety of capitalisms and connections by focusing on emerging economies,
companies and sectors, debates and policies. It informs diverse policy communi-
ties as the established trans-Atlantic North declines and “the rest”, especially the
BRICS, rise.
Titles include:
Andrei V. Belyi
TRANSNATIONAL GAS MARKETS AND EURO-RUSSIAN ENERGY RELATIONS
Silvia Pepino
SOVEREIGN RISK AND FINANCIAL CRISIS
The International Political Economy of the Eurozone
Ryan David Kiggins ( editor )
THE POLITICAL ECONOMY OF RARE EARTH ELEMENTS
Rising Powers and Technological Change
Seán Ó Riain, Felix Behling, Rossella Ciccia and Eoin Flaherty (e ditors )
THE CHANGING WORLDS AND WORKPLACES OF CAPITALISM
Alexander Korolev and Jing Huang
INTERNATIONAL COOPERATION IN THE DEVELOPMENT OF RUSSIA’S FAR
EAST AND SIBERIA
Roman Goldbach
GLOBAL GOVERNANCE AND REGULATORY FAILURE
The Political Economy of Banking
Kate Ervine and Gavin Fridell (e ditors )
BEYOND FREE TRADE
Alternative Approaches to Trade, Politics and Power
Ray Kiely
THE BRICS, US “DECLINE” AND GLOBAL TRANSFORMATIONS
Robin Bush, Philip Fountain and Mark Feener ( editors )
RELIGION AND THE POLITICS OF DEVELOPMENT
Critical Perspectives on Asia
Markus Fraundorfer
BRAZIL’S EMERGING ROLE IN GLOBAL SECTORAL GOVERNANCE
Health, Food Security and Bioenergy
Katherine Hirschfeld
GANGSTER STATES
Organized Crime, Kleptocracy and Political Collapse
Matthew Webb and Albert Wijeweera ( editors )
THE POLITICAL ECONOMY OF CONFLICT IN SOUTH ASIA
Matthias Ebenau, Ian Bruff and Christian May (e ditors )
STATES AND MARKETS IN HYDROCARBON SECTORS
Critical and Global Perspectives
Jeffrey Dayton-Johnson
LATIN AMERICA’S EMERGING MIDDLE CLASSES
Economic Perspectives
Andrei Belyi and Kim Talus
STATES AND MARKETS IN HYDROCARBON SECTORS
Dries Lesage and Thijs Van de Graaf
RISING POWERS AND MULTILATERAL INSTITUTIONS
Leslie Elliott Armijo and Saori N. Katada (e ditors)
THE FINANCIAL STATECRAFT OF EMERGING POWERS
Shield and Sword in Asia and Latin America
Md Mizanur Rahman, Tan Tai Yong, Ahsan Ullah (e ditors)
MIGRANT REMITTANCES IN SOUTH ASIA
Social, Economic and Political Implications
Bartholomew Paudyn
CREDIT RATINGS AND SOVEREIGN DEBT
The Political Economy of Creditworthiness through Risk and Uncertainty
Lourdes Casanova and Julian Kassum
THE POLITICAL ECONOMY OF AN EMERGING GLOBAL POWER
In Search of the Brazil Dream
Toni Haastrup, and Yong-Soo Eun ( editors)
REGIONALISING GLOBAL CRISES
The Financial Crisis and New Frontiers in Regional Governance
Kobena T. Hanson, Cristina D’Alessandro and Francis Owusu (e ditors)
MANAGING AFRICA’S NATURAL RESOURCES
Capacities for Development
International Political Economy Series
Series Standing Order ISBN 978–0–333–71708–0 hardcover
ISBN 978–0–333–71110–1 paperback
You can receive future titles in this series as they are published by placing a standing order.
Please contact your bookseller or, in case of difficulty, write to us at the address below with
your name and address, the title of the series and one of the ISBNs quoted above.
Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke,
Hampshire RG21 6XS, England
Alliance Capitalism,
Innovation and the
Chinese State
The Global Wireless Sector
Victoria Higgins
Monash University, Victoria, Australia
© Victoria Higgins 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-52964-0
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
Copyright, Designs and Patents Act 1988, or under the terms of any licence
permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6–10 Kirby Street, London EC1N 8TS.
Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The author has asserted her right to be identified as the author of this work
in accordance with the Copyright, Designs and Patents Act 1988.
First published 2015 by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
175 Fifth Avenue, New York, NY 10010.
Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-55323-5 ISBN 978-1-137-52965-7 (eBook)
DOI 10.1057/9781137529657
This book is printed on paper suitable for recycling and made from fully
managed and sustained forest sources. Logging, pulping and manufacturing
processes are expected to conform to the environmental regulations of the
country of origin.
A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Higgins, Victoria, 1970–
Alliance capitalism, innovation and the Chinese state: the global
wireless sector / Victoria Higgins.
pages cm.—(International political economy series)
1. Technological innovations – Economic aspects – China. 2. Information
technology – Economic aspects – China. 3. High technology industries –
China. 4. Telecommunication – China. 5. Public-private sector cooperation-
-China. 6. Strategic alliances (Business) – China. 7. Technology and state
– China. I. Title.
HC430.T4H55 2015
384.5(cid:2)30951—dc23 2015015594
Contents
Acknowledgements viii
List of Abbreviations i x
1 China’s New Alliance Capitalism and the Case of
the Wireless Communication Sector 1
Key objectives 5
Critical ecosystem dependencies and the global knowledge
economy 8
Alliance capitalism 11
Structure and agency in the global collaborative economy 12
State capitalism and innovation 14
The global network state as a theoretical framework 17
The Chinese developmental state and the global wireless
communication sector 22
Analytical framework and key concepts 23
Research methodology and data collection 25
Organisation of the book 28
2 The Perils of Strategic Technological Development
Policy: Two Failed Chinese Attempts, FDI and
Techno-Nationalism 30
FDI: trading market access for technology 31
China’s early science and technology policy and programs 35
Shallow integration and the liberal critique 37
Indigenous development/techno-nationalism 42
Standards development as competitive strategy 4 4
WAPI 47
Conclusion 51
3 Complex Global Technological Systems and the Chinese
State: From National Indigenous Innovation to
Globalised Adaptive Ecology 53
Ecological and socio-technological systems integration 56
Complex adaptive systems and technological evolution 59
Structure, agency and globalised adaptive ecology 63
Strategic niches and technological development 66
v
vi Contents
System integrators and network organisers 68
Intellectual property and the collaborative economy 70
Open innovation, patent tradability and China’s weak
intellectual property regime 75
Alliance capitalism, resource sharing and relational ties 78
Conclusion 83
4 Technological Development, Alliance Capitalism and
Chinese State Capacity 85
The developmental state 86
The Chinese developmental state 88
Chinese state capacity and high-technology innovation 95
National innovation and Science and Technology policy
objectives and reforms 100
Key policy directives and innovation indicators 102
The collaborative economy, alliance capitalism and the
Chinese government 108
5 Beyond Neo-Techno-Nationalism: An Introduction
to China’s Emergent Third Way: Globalised Adaptive
Ecology, Emergent Capabilities and Policy Instruments 115
Foreign domestic investment and shallow industrialisation 118
Chinese strategic policy and the case of the wireless
communication sector 119
Competition, compromise and alliance capitalism 121
The Chinese state and the wireless communication sector 122
4G: from neo-techno-nationalism to global ecosystem
development 125
Go Global Policy 130
Chinese government funding for domestic firms 131
Public procurement and trading technology for market access 134
Relational legitimacy versus forced technology transfers 135
Alliance capitalism and the Chinese global wireless
communication sector 137
Chinese government complicity in intellectual property
theft and industrial espionage 142
Conclusion 143
6 Global Wireless Communication Sector 1 46
Methodology 146
The Chinese government: learning from the failure of
TD-SCDMA 148
Contents vii
4G 150
China’s domestic firms and evidence of innovation capability 153
Alliance data and R&D expenditure 154
China Mobile 154
Huawei 157
ZTE 158
R&D expenditure 160
Foreign firms as strategic insiders 161
Patent data 162
Market share 165
Chinese government support and technological
development in the global wireless communication sector 171
Political implications of the new program 172
Conclusion 173
7 Conclusion 175
Empirical findings 176
Theoretical review and implications 177
Appendices 182
Appendix A – Chinese firm questions 182
Appendix B – Foreign firm questions 183
Appendix C – Government/ministerial/academic questions 186
Appendix D – Brief interviewee descriptions 189
Bibliography 191
Index 217
Acknowledgements
This book would not have been possible without the support I have
received from many people. I would like to thank Professors Stephen
Bell and David Jones for their guidance, support and breadth of knowl-
edge. Professor Bell read and commented on the entire typescript, for
which I am truly grateful.
I would like to convey my thanks to the University of Queensland,
specifically the School of International Relations and Political Science,
which has provided the funding and facilities required to complete my
research. I also would like to thank the committee of the Chinese Goes
Global conference held at Harvard University in 2011 for providing the
opportunity to present and refine my ideas. I thank Hu Biliang, Dean
of Beijing Normal University, for his invitation to present and further
refine my work as a guest lecturer at Beijing Normal University in 2012.
Thanks also to my interviewees in China for their time and pertinent
insights into China’s innovation process. Finally, I wish to express my
love and gratitude to my beloved family, for their understanding and
endless support, throughout the duration of the writing process.
viii
List of Abbreviations
APS application providers
BPO business process outsourcing
BWA broadband wireless access
C & D concept and develop
CASS Chinese Academy of Social Science
CCP Communist Party of China
CCSA China Communications Standardization Association
CDMA Code Division Multiple Access
CGINs collaborative global innovation networks
CIC China Investment Corporation
CIT Corporate Income Tax
CPs content providers
DCI Digital Cinema Initiative
DJIA Dow Jones Industrial Average
EDA electronic design automation
EMS electronic manufacturing services
EPs equipment providers
ETSI European Telecommunications Standards Institute
ETDZ economic and technological development zones
FDD frequency-division duplexing
FDI foreign direct investment
FFEs foreign-funded enterprises
FIE foreign-invested enterprise sector
FRAND fair, reasonable and non-discriminatory
FYP Five-Year Plan
GDP gross domestic profit
GFC global financial crisis
GIPN g lobal innovation production networks
GPN global production networks
GSM Global System for Mobile Communications
GTI Global TD-LTE Initiative
HDTV high-definition television sets
HSPA High Speed Packet Access
3G Third Generation Mobile Telecommunications Technology
Standards
3GPP T hird Generation Partnership Project
ix