A Divergent Path of Industrial Upgrading: Emergence and Evolution of the Mobile Handset Industry in China
AbstractStarting from almost null in the late 1990s, China's mobile phone handset industry has grown to account for more than 40 percent of the current world production. While export growth has been overwhelmingly led by multi-national corporations (MNCs), increasingly fierce competition in the domestic market ignited by the advent of local handset makers has induced unique industrial evolution: (1) outgrowth of independent design houses specialized in handset development and (2) emergence of IC fabless ventures that design core ICs for handsets. In the background of this evolutionary industrial growth there are factors such as, the scale and increasing diversity of China's domestic market that advantages local firms vis-a-vis MNCs; modularization of handset and semiconductor technologies; policy interventions that supports local startups. The emergence and evolution of China's handset industry is likely to have international implications as the growth of the global demand for low-cost and multi-function mobile phone handsets is expected to accelerate. Thus, our case suggests that the conventional view of latecomer industrialization and upgrading that emphasizes the key role of international production networks organized by MNCs needs to be modified in order to accommodate China's rise into perspective.
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Bibliographic InfoPaper provided by Institute of Developing Economies, Japan External Trade Organization(JETRO) in its series IDE Discussion Papers with number 125.
Date of creation: Oct 2007
Date of revision:
Publication status: Published in IDE Discussion Paper. No. 125. 2007.10
Postal: Publication Office, IDE 3-2-2 Wakaba, Mihama-ku, Chiba-shi, Chiba 261-8545 JAPAN
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L6 - Industrial Organization - - Industry Studies: Manufacturing
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- P2 - Economic Systems - - Socialist Systems and Transition Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-17 (All new papers)
- NEP-CNA-2007-11-17 (China)
- NEP-TRA-2007-11-17 (Transition Economics)
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