High-technology industry in China

High-technology industry in China

The high-technology Chinese industries gained in vitality these last two decades. But the main part of the development was made under massive drip of foreign capital and imported technologies. It is rather understandable that a developing country as China follows the path of the technological imports for its development. But how long still does the country have to follow such a strategy of development?

High-tech in Asia

Japan, Taiwan and South Korea all knew this gap between technological imports and national innovations. For example, when South Korea began its industrialization impulsed by the heavy chemical industry in the 1960s, it chooses to import foreign technologies. Later, by making companies the main actors of the innovation with the support of an active policy, the country knew a development impulsed by the national technological capacities.

According to Daxue Consulting, the Korean firms are gradually crossed by the production of products conceived abroad (Original Equipment Manufacturing – ŒM) in the manufacture of products conceived in Korea (Own Design Manufacturing – ODM) and in that of their own marks (Own Brand Manufacturing – OBM) to get back more added value. We would wish that China follows the same trajectory.

Daxue Consulting

Daxue Consulting is the most efficient market research firm on high-tech in China

Foreign technologies in China

At the same time, the experience of the recently industrialized Asian savings also suggests that it is not the technological imports, but rather the lack of local absorption capacity to assimilate, adapt and improve the imported technologies, that pull dependence to the foreign technologies. And the foreign direct investments as vectors of technological transfer can strengthen to a certain extent this dependence.

According to JX Paulin, founder of Mysimax, numerous advantages should invite China to resolve the current technological crisis and to create in the XXIth century an economy based on the knowledge. The new products and the services resulting from innovations would easily be likened by the vast national market, so opening the way in some more of innovations. But the advantages of the market, as well as the comparative advantage of the manpower could discourage the Chinese companies to be innovative.

Mysimax

Cost of distribution in China

China, by the combination of its trump cards of moderate costs of manufacture and distribution, surmounted successfully its weakness in quality terms, and it motivates probably less companies to be represented in the first rank. With the development of its market, China will certainly continue to have access to the foreign technologies. But, as explained by SJ Grand, it is only with the greater technological capacity that she can acquire leader’s position on the world market and raise the national firms at the level of those of the industrialized nations.

See also:

http://daxueconsulting.com/consulting-china/

http://www.theguardian.com/science/political-science/2013/oct/11/china-science-superpower

http://online.wsj.com/news/articles/SB10001424052702303819704579320544231396168

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