Alliance Capitalism, Innovation and the Chinese State: The Global Wireless Sector PDF
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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
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