Chapter 13: China’s Move to High-tech Innovation: Some Regional Policy Implications
Richard P. Appelbaum and Rachel Parker1 1. INTRODUCTION China has emerged as a major economic player in recent years. Even as the United States, Europe and Japan are plagued with sluggish economic growth and growing financial strains, China continues with double-digit growth and sizeable surpluses of foreign revenues, surpluses that are ploughed back into growth-inducing infrastructure projects. The United States in particular, as of this writing (August 2011), appears to be politically gridlocked over the appropriate vision for government: should it be investing in future economic growth, or avoiding economic involvement altogether, letting the market determine economic outcomes? This is in part a question about the role of the state in fostering economic development, and in broad terms about industrial policy. Such a question is not a matter of great contention in China, which is investing heavily across the Chinese economy, particularly in high-tech sectors. The Chinese government is placing its bets that heavy public investment in targeted areas, focusing especially on supporting research and development, will pay off in a big way: it will make China less dependent on foreign firms and their technologies as the key source for innovative ideas, products and markets. China, in other words, appears to be moving increasingly towards uncoupling itself, at least in part, from dependence on others. In this chapter, we first examine the steps China has recently taken to ‘leapfrog development’ through a series of government programmes intended to foster indigenous innovation. We examine the ways in which these programmes serve...
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