Table Of ContentInternational Political Economy Series
Alliance Capitalism,
Innovation and the
Chinese State
The Global Wireless Sector
Victoria Higgins
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Alliance Capitalism,
Innovation and the
Chinese State
The Global Wireless Sector
Victoria Higgins
Monash University, Victoria, Australia
© Victoria Higgins 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-52964-0
All rights reserved. No reproduction, copy or transmission of this
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in accordance with the Copyright, Designs and Patents Act 1988.
First published 2015 by
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DOI 10.1057/9781137529657
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A catalogue record for this book is available from the British Library.
Library of Congress Cataloging-in-Publication Data
Higgins, Victoria, 1970–
Alliance capitalism, innovation and the Chinese state: the global
wireless sector / Victoria Higgins.
pages cm.—(International political economy series)
1. Technological innovations – Economic aspects – China. 2. Information
technology – Economic aspects – China. 3. High technology industries –
China. 4. Telecommunication – China. 5. Public-private sector cooperation-
-China. 6. Strategic alliances (Business) – China. 7. Technology and state
– China. I. Title.
HC430.T4H55 2015
384.5(cid:2)30951—dc23 2015015594
Contents
Acknowledgements viii
List of Abbreviations i x
1 China’s New Alliance Capitalism and the Case of
the Wireless Communication Sector 1
Key objectives 5
Critical ecosystem dependencies and the global knowledge
economy 8
Alliance capitalism 11
Structure and agency in the global collaborative economy 12
State capitalism and innovation 14
The global network state as a theoretical framework 17
The Chinese developmental state and the global wireless
communication sector 22
Analytical framework and key concepts 23
Research methodology and data collection 25
Organisation of the book 28
2 The Perils of Strategic Technological Development
Policy: Two Failed Chinese Attempts, FDI and
Techno-Nationalism 30
FDI: trading market access for technology 31
China’s early science and technology policy and programs 35
Shallow integration and the liberal critique 37
Indigenous development/techno-nationalism 42
Standards development as competitive strategy 4 4
WAPI 47
Conclusion 51
3 Complex Global Technological Systems and the Chinese
State: From National Indigenous Innovation to
Globalised Adaptive Ecology 53
Ecological and socio-technological systems integration 56
Complex adaptive systems and technological evolution 59
Structure, agency and globalised adaptive ecology 63
Strategic niches and technological development 66
v
vi Contents
System integrators and network organisers 68
Intellectual property and the collaborative economy 70
Open innovation, patent tradability and China’s weak
intellectual property regime 75
Alliance capitalism, resource sharing and relational ties 78
Conclusion 83
4 Technological Development, Alliance Capitalism and
Chinese State Capacity 85
The developmental state 86
The Chinese developmental state 88
Chinese state capacity and high-technology innovation 95
National innovation and Science and Technology policy
objectives and reforms 100
Key policy directives and innovation indicators 102
The collaborative economy, alliance capitalism and the
Chinese government 108
5 Beyond Neo-Techno-Nationalism: An Introduction
to China’s Emergent Third Way: Globalised Adaptive
Ecology, Emergent Capabilities and Policy Instruments 115
Foreign domestic investment and shallow industrialisation 118
Chinese strategic policy and the case of the wireless
communication sector 119
Competition, compromise and alliance capitalism 121
The Chinese state and the wireless communication sector 122
4G: from neo-techno-nationalism to global ecosystem
development 125
Go Global Policy 130
Chinese government funding for domestic firms 131
Public procurement and trading technology for market access 134
Relational legitimacy versus forced technology transfers 135
Alliance capitalism and the Chinese global wireless
communication sector 137
Chinese government complicity in intellectual property
theft and industrial espionage 142
Conclusion 143
6 Global Wireless Communication Sector 1 46
Methodology 146
The Chinese government: learning from the failure of
TD-SCDMA 148
Contents vii
4G 150
China’s domestic firms and evidence of innovation capability 153
Alliance data and R&D expenditure 154
China Mobile 154
Huawei 157
ZTE 158
R&D expenditure 160
Foreign firms as strategic insiders 161
Patent data 162
Market share 165
Chinese government support and technological
development in the global wireless communication sector 171
Political implications of the new program 172
Conclusion 173
7 Conclusion 175
Empirical findings 176
Theoretical review and implications 177
Appendices 182
Appendix A – Chinese firm questions 182
Appendix B – Foreign firm questions 183
Appendix C – Government/ministerial/academic questions 186
Appendix D – Brief interviewee descriptions 189
Bibliography 191
Index 217
Acknowledgements
This book would not have been possible without the support I have
received from many people. I would like to thank Professors Stephen
Bell and David Jones for their guidance, support and breadth of knowl-
edge. Professor Bell read and commented on the entire typescript, for
which I am truly grateful.
I would like to convey my thanks to the University of Queensland,
specifically the School of International Relations and Political Science,
which has provided the funding and facilities required to complete my
research. I also would like to thank the committee of the Chinese Goes
Global conference held at Harvard University in 2011 for providing the
opportunity to present and refine my ideas. I thank Hu Biliang, Dean
of Beijing Normal University, for his invitation to present and further
refine my work as a guest lecturer at Beijing Normal University in 2012.
Thanks also to my interviewees in China for their time and pertinent
insights into China’s innovation process. Finally, I wish to express my
love and gratitude to my beloved family, for their understanding and
endless support, throughout the duration of the writing process.
viii
List of Abbreviations
APS application providers
BPO business process outsourcing
BWA broadband wireless access
C & D concept and develop
CASS Chinese Academy of Social Science
CCP Communist Party of China
CCSA China Communications Standardization Association
CDMA Code Division Multiple Access
CGINs collaborative global innovation networks
CIC China Investment Corporation
CIT Corporate Income Tax
CPs content providers
DCI Digital Cinema Initiative
DJIA Dow Jones Industrial Average
EDA electronic design automation
EMS electronic manufacturing services
EPs equipment providers
ETSI European Telecommunications Standards Institute
ETDZ economic and technological development zones
FDD frequency-division duplexing
FDI foreign direct investment
FFEs foreign-funded enterprises
FIE foreign-invested enterprise sector
FRAND fair, reasonable and non-discriminatory
FYP Five-Year Plan
GDP gross domestic profit
GFC global financial crisis
GIPN g lobal innovation production networks
GPN global production networks
GSM Global System for Mobile Communications
GTI Global TD-LTE Initiative
HDTV high-definition television sets
HSPA High Speed Packet Access
3G Third Generation Mobile Telecommunications Technology
Standards
3GPP T hird Generation Partnership Project
ix
