The Digital Business Ecosystem

The Digital Business Ecosystem

Edited by Angelo Corallo, Giuseppina Passiante and Andrea Prencipe

By bringing together elements of a radical new approach to the firm based on a biological metaphor of the ecosystem, this unique book extends the limits of existing theories traditionally used to investigate business networks.

Chapter 7: China and the New Economy: A Case of Convergence?

Max Boisot and John Child

Subjects: business and management, organisational innovation, organisation studies, strategic management, innovation and technology, organisational innovation

Extract

Max Boisot and John Child INTRODUCTION China finally joined the World Trade Organization (WTO) in January 2002, following ten years of negotiations. The event was interpreted both inside and outside the country as a major step marking China’s progress toward becoming a ‘normal’ open market economy, though reservations have been expressed about how quickly this can be achieved (Garnaut and Song 2002). In particular, the Chinese authorities are sensitive to the need to apply WTO provisions with discretion in order to prevent a major collapse of inefficient state-owned enterprises with the surge in unemployment and social unrest this would trigger (Solinger 2003). Nevertheless, the prevailing assumption is that under its economic reform programme started in 1979, China has slowly been moving towards a market order that has become progressively more integrated into the global economic system through trading, foreign direct investment, the transfer of best practice and the spread of management education. The progressive development of such integration between economies and between their constituent firms is generally accepted as a defining characteristic of ‘globalization’ (Dicken 2003). With globalization, more intensive social relations accompany economic integration and these in turn are seen to lead to growing similarities in cultures, behaviour and practices (Steger 2003). China’s entry into the WTO is expected to accelerate its economic and social integration with the rest of the world. The hope is that the institutional and regulatory changes China’s WTO entry should bring about will make it easier either to compete or to collaborate...

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