planned for South Korea and some Eastern European countries.

explaining catch-up

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 to 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.

References

1. China Telecommunications Over 50 Years. Ministry of Information Industry, beijing, 1999.

2. Fast Company. the world’s most innovative companies, (Feb. 2010); http://www.fastcompany.com/ mic/2010

3. Gibson, e. and McGregor, J. the world’s most influential companies, Business Week (aug. 8, 2008); http://images.businessweek.com/ss/08/12/1211_ most_influential/ index.htm

4. Global brands. Financial Times, london, 2007; http:// www.ft.com/reports/globalbrands2007

5. ICT-Eye. International telecommunication union, Geneva, 2010; http://www.itu.int/Itu-d/icteye/ Indicators/ Indicators.aspx

6. Ministry Report News. Central Government of the People’s republic of China, beijing, 2008; http://www. gov.cn/gzdt/2008-02/02/content_879678.htm

7. Telecommunication Industry Statistics. Ministry of Industry and Information technology, beijing, 2009; http://www.miit.gov.cn/n11293472/n11293832/ n11294132/n12858447/ 12985105.html

8. Wray, r. and stewart, H. Western business struggles to break Chinese barriers. The Observer, (Mar. 28, 2010), 38–39

 

Ping Gao ( [e-mail]) 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. sed.manchester.ac.uk/idpm/, http://www.manchester. ac.uk/cdi. Jiang Yu ( [e-mail]) 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.