Digital Dragon

Digital Dragon: High-Technology Enterprises in China

Adam Segal
Copyright Date: 2003
Edition: 1
Published by: Cornell University Press
Pages: 200
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  • Book Info
    Digital Dragon
    Book Description:

    During the economic reforms of the last twenty years, China adopted a wide array of policies designed to raise its technological capability and foster industrial growth. Ideologically, the government would not promote private-ownership firms and instead created a hybrid concept, that of "nongovernmental enterprises" or minying qiye. Adam Segal examines the minying experience, particularly in high technology, in four key regions: Beijing, Shanghai, Xi'an, and Guangzhou.

    Minying enterprises have been neither clear successes nor abject failures, Segal finds. Instead, outcomes varied: though efforts to create a core of innovative high-tech firms succeeded in Beijing, minying enterprises elsewhere have languished. He points to variations in local implementation of government policies on investment, property-rights regulation, and government supervision as a key to the different outcomes. He explains these peculiarities of implementation by putting official decisions within their local contexts. Extending his analysis, he compares the experience of creating technology enterprises in China with those of Korea (the chaebol system) and Taiwan (enterprise groups).

    Based on interviews with entrepreneurs and local government officials, as well as numerous published primary sources, Digital Dragon is the first detailed look at a major Chinese institutional experiment and at high-tech endeavors in China. Can China become a true global economic power? The evolution of the high- technologies sector will determine, Segal says, whether China will become a modern economy or simply a large one.

    eISBN: 978-0-8014-5929-0
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. List of Figures and Tables
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)
    Adam Segal
  5. Note on Currency
    (pp. xiii-xvi)
  6. CHAPTER ONE High-Technology Enterprises in China
    (pp. 1-22)

    One of the main goals of the economic reform process started in 1978 by Deng Xiaoping was to raise China’s indigenous technological capabilities. Like their counterparts in other developing countries, Chinese leaders have been dissatisfied with and unwilling to accept their place in the international division of labor. Policymakers in these countries want to leave behind industries dependent on low labor costs and second- or third-generation technologies, gradually replacing them with high-technology industries. These countries are not content to remain consumers of the newest technologies produced by more advanced economies. Industrializing states want to be as close to the cutting...

  7. CHAPTER TWO Local Governments and Technological Innovation
    (pp. 23-50)

    The national policies that created nongovernmental high-technology enterprises ( minying keji qiye) did little to define what a “nongovernmental” enterprise actually was. This ambiguity spanned the reform period and opened the door to local variation. Officials in Beijing, Shanghai, Xi’an, and Guangzhou molded national technology policy to fit local conditions. Wanting to make information industries a “pillar industry” (zhizhu chanye) of the local economy, Beijing focused on smaller, hybrid enterprises, Shanghai concentrated on large business groups, Xi’an fluctuated between the two, and Guangzhou paid little attention to either, content to let the market drive development.

    Why did Shanghai and Beijing...

  8. CHAPTER THREE Beijing: Creating China’s Silicon Valley
    (pp. 51-86)

    Like other local governments in China, Beijing started the 1980s by reforming agriculture and by addressing the problems of large state-owned enterprises (SOEs) in more traditional industrial sectors.¹ After initiating these reforms, the local government then turned to the science and technology system. In particular, the local government hoped to link scientific research more closely with industrial production. Nongovernmental enterprises were meant to be a step away from the economic and institutional weaknesses of SOEs and a step closer toward the small, flexible, and privately owned technology firms found in the West, especially in Silicon Valley.

    Geographically and politically a...

  9. CHAPTER FOUR Shanghai: Small Enterprises in a Big Enterprise Town
    (pp. 87-119)

    At the most basic level, Shanghai did not significantly trail Beijing in either the quantity or quality of science and technology resources. In 1994 Shanghai had 1,473 research and development organizations of all types compared to Beijing’s 1,085, and Fudan, Jiaotong, and Shanghai Science and Technology universities were all at or near the top of the educational system.¹ In the same year, of total national science and technology (S&T) expenditures, RMB 10.24 billion was spent in Beijing; Shanghai followed not far behind with RMB 9 billion.² In addition, Shanghai fell under the same set of national policies to support the...

  10. CHAPTER FIVE Nongovernmental Enterprises in Guangzhou and Xi’an
    (pp. 120-154)

    There may be no two cases of technological development in China farther apart than the cities of Guangzhou and Xi’an. Across almost every measure, the two cases seem to be the reverse image of each other. As the capital of Guangdong, Guangzhou benefited from changing international markets, improved means of communication, and geographical closeness and historical ties to Hong Kong. Moreover, reformist provincial leaders aggressively exploited the “policy windows” opened by the central government on behalf of the region, often pushing reforms much further than had originally been expected and fostering some of the world’s fastest growth rates in the...

  11. CHAPTER SIX Technology and China’s Future
    (pp. 155-170)

    At the end of 1996, the world of nongovernmental enterprises received a shock: Giant (Juren), one of the most famous and successful nongovernmental enterprises, essentially went bankrupt. Founded in 1989 by Shi Yuzhu with an original investment of RMB 4,000, Giant had sales of its Chinese language card totaling RMB 160 million and profits exceeding RMB 35 million by 1992.¹ The company set up an office on Beijing’s “Electronics Avenue” and hired one of the former managers of Founders, Luo Binlong, to head the new Giant Advanced Technology Group. Both Jiang Zemin and Li Peng visited the company and praised...

  12. Appendix
    (pp. 171-176)
  13. Index
    (pp. 177-184)