Distinctive Characteristics of China's Path of ICT Development: A Critical Analysis of Chinese Developmental Strategies in Light of the Eastern Asian Model

Yu Hong


Although China roughly follows the developmental path of Japan and the Four Asian Little Tigers [Taiwan, Singapore, Hong Kong and South Korea] to pursue an export-led industrialization in the global informationalized economy, the timing, agents and modes of China’s information and communications technology (ICT) development are distinctively different from the Eastern Asian model, and therefore, China may not repeat the success stories of these economies. By comparing China’s ICT development with these Eastern Asian precedents, this paper argues that because the state introduced a massive infusion of foreign direct investment (FDI) to jump-start China’s ICT production and exports in the early 1990s, this mode of development has established the absolute domination of foreign capital in ICT production and exports. China’s infant ICT industries have been compelled into global market competition, and the premature entry of China’s infant industries has limited their development space from early on. Being squeezed by globalized market competition and hindered by financial and technological barriers, infant domestic enterprises do not enjoy an autonomous space to develop their R&D and market capacities and thereby could only hope to excel in the large-volume and low value-added stage of final production. As part of the global chain of production, domestic firms are specialized in handling large volume and low value-added production in global economy. Meanwhile, they lack financial, technological and marketing capacities to create a global reach and have to face an underdeveloped domestic market. It is uncertain whether China, while facing a different and difficult external business environment, can bypass its current position of low-tech assembly operation.

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