planned for South Korea and some
Eastern European countries.
We answer the question posed in the
headline for this column with a mixed
but generally positive response. In IT
infrastructure, China is catching up
quickly. In some areas of IT services
and innovation it has caught up. A
few IT firms and technologies are now
world-leading. How did this happen in
a country that, less than three decades
ago, was decidedly “Third World”?
China’s general economic growth
has helped. So has its large size. But
government and its policy of “
techno-nationalism” has been a significant influencing factor with a series of policies
that made IT—especially local IT capacity—a priority. The general approach
has been heavy control followed by
liberalization, but varied from sector
For example, in telecommunications services, infrastructure was very
weak in the 1980s but there was some
local capacity. The Chinese government decided to retain the state monopoly and granted it tax and investment privileges. Only as the market
grew was competition introduced to
boost growth, moving from monopoly
to duopoly in 1994, and then opening
to further competition in 1998 and
2008. In telecommunications equipment, local capacity was too limited
and risked stunting wider growth.
Government therefore opened the
market to foreign firms in 1982. It
used the lure of China’s 1. 3 billion
potential consumers as leverage to
encourage Western firms to compete
among themselves in offering the best
technology transfer to China, and the
greatest support to local innovation.
The Chinese government has also
created and supported a series of R&D
programs that bring firms, research
institutes, and universities together
to work on R&D for key technologies.
Creation of the TD-SCDMA standard involved just such a consortium. Together, these initiatives and actions mean
China now has a drastically improved
national innovation system.
challenges and future Trends
In IT infrastructure and services
penetration, China is still some way
behind the U.S., Western Europe,
and neighbors like Japan and South
Korea. Its national policies, though,
will no doubt allow the “catching up
quickly” to continue. For example,
China has invested extensively in
higher education over the next few
years, coinciding with cutbacks in
many Western nations.
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2. Fast Company. the world’s most innovative
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3. Gibson, e. and McGregor, J. the world’s most
influential companies, Business Week (aug. 8, 2008);
4. Global brands. Financial Times, london, 2007; http://
5. ICT-Eye. International telecommunication union,
Geneva, 2010; http://www.itu.int/Itu-d/icteye/
6. Ministry Report News. Central Government of the
People’s republic of China, beijing, 2008; http://www.
7. Telecommunication Industry Statistics. Ministry of
Industry and Information technology, beijing, 2009;
8. Wray, r. and stewart, H. Western business struggles
to break Chinese barriers. The Observer, (Mar. 28,
Ping Gao ( firstname.lastname@example.org) is a lecturer in
development informatics at the Institute for development
Policy and Management, and Centre for development
Informatics, university of Manchester, u.K.; http://www.
Jiang Yu ( email@example.com) is an associate
professor in the Institute of Policy and Management,
Chinese academy of sciences, China. He is the editor of
the Journal of Science and Technology Policy in China.