IDEAS home Printed from https://ideas.repec.org/p/tor/tecipa/tecipa-395.html
   My bibliography  Save this paper

The Fight for the Middle: Upgrading, Competition, and Industrial Development in China

Author

Listed:
  • Loren Brandt
  • Eric Thun

Abstract

When China acceded to WTO in 2001, there were fears that Chinese firms would lose market share in key sectors to foreign-invested enterprises (FIEs). Although aggregate data often indicate a shift in favour of FIEs, indigenous firms in many cases have slowly increased market share and deepened their technical capabilities. Through an analysis of aggregate data and three sectors, we show how the dynamics of competition between Chinese and FIEs in China's domestic market enhance the upgrading prospects for Chinese firms. China represents a new model of development in several important respects: industrial upgrading efforts are often domestically-driven, within this domestic market there is intense competition between both domestic and foreign firms, and this competition is driving and stimulating the upgrading efforts of domestic firms.

Suggested Citation

  • Loren Brandt & Eric Thun, 2010. "The Fight for the Middle: Upgrading, Competition, and Industrial Development in China," Working Papers tecipa-395, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-395
    as

    Download full text from publisher

    File URL: https://www.economics.utoronto.ca/public/workingPapers/tecipa-395.pdf
    File Function: Main Text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Crespo, Nuno & Fontoura, Maria Paula, 2007. "Determinant Factors of FDI Spillovers - What Do We Really Know?," World Development, Elsevier, vol. 35(3), pages 410-425, March.
    2. Unknown, 2005. "Forward," 2005 Conference: Slovenia in the EU - Challenges for Agriculture, Food Science and Rural Affairs, November 10-11, 2005, Moravske Toplice, Slovenia 183804, Slovenian Association of Agricultural Economists (DAES).
    3. Hubert Schmitz, 2007. "Reducing Complexity in the Industrial Policy Debate," Development Policy Review, Overseas Development Institute, vol. 25(4), pages 417-428, July.
    4. Steinfeld, Edward S., 2004. "China's Shallow Integration: Networked Production and the New Challenges for Late Industrialization," World Development, Elsevier, vol. 32(11), pages 1971-1987, November.
    5. Thun,Eric, 2006. "Changing Lanes in China," Cambridge Books, Cambridge University Press, number 9780521843829.
    6. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
    7. Alice H. Amsden & Wan-wen Chu, 2003. "Beyond Late Development: Taiwan's Upgrading Policies," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011980, December.
    8. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dallas, Mark P., 2014. "Manufacturing Paradoxes: Foreign Ownership, Governance, and Value Chains in China’s Light Industries," World Development, Elsevier, vol. 57(C), pages 47-62.
    2. Keun Lee & Di Qu & Zhuqing Mao, 2021. "Global Value Chains, Industrial Policy, and Industrial Upgrading: Automotive Sectors in Malaysia, Thailand, and China in Comparison with Korea," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 275-303, April.
    3. Pierluigi Montalbano & Silvia Nenci & Carlo Pietrobelli, 2018. "Opening and linking up: firms, GVCs, and productivity in Latin America," Small Business Economics, Springer, vol. 50(4), pages 917-935, April.
    4. Jan van der Borg & Erwin van Tuijl, 2011. "Upgrading of Symbolic and Synthetic Knowledge Bases: Analysis of the Architecture, Engineering and Construction industry and the Automotive Industry in China," Working Papers 2011_25, Department of Economics, University of Venice "Ca' Foscari".
    5. Mike Morris & Leonhard Plank & Cornelia Staritz, 2016. "Regionalism, end markets and ownership matter: Shifting dynamics in the apparel export industry in Sub Saharan Africa," Environment and Planning A, , vol. 48(7), pages 1244-1265, July.
    6. McWilliam, Sarah E. & Kim, Jung Kwan & Mudambi, Ram & Nielsen, Bo Bernhard, 2020. "Global value chain governance: Intersections with international business," Journal of World Business, Elsevier, vol. 55(4).
    7. Pipkin, Seth, 2011. "Local Means in Value Chain Ends: Dynamics of Product and Social Upgrading in Apparel Manufacturing in Guatemala and Colombia," World Development, Elsevier, vol. 39(12), pages 2119-2131.
    8. Staritz, Cornelia, 2012. "Value chains for development? Potentials and limitations of global value chain approaches in donor interventions," Working Papers 31, Austrian Foundation for Development Research (ÖFSE).
    9. Padmashree Gehl Sampath & Bertha Vallejo, 2018. "Trade, Global Value Chains and Upgrading: What, When and How?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 481-504, July.
    10. Yoruk, Deniz E., 2019. "Dynamics of firm-level upgrading and the role of learning in networks in emerging markets," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 341-369.
    11. Pavida Pananond, 2016. "From servant to master: Power repositioning of emerging-market companies in global value chains," Asian Business & Management, Palgrave Macmillan, vol. 15(4), pages 292-316, September.
    12. Leonhard Plank & Cornelia Staritz, 2013. "‘Precarious upgrading’ in electronics global production networks in Central and Eastern Europe: the cases of Hungary and Romania," Global Development Institute Working Paper Series ctg-2013-31, GDI, The University of Manchester.
    13. Amendolagine, Vito & Presbitero, Andrea F. & Rabellotti, Roberta & Sanfilippo, Marco, 2019. "Local sourcing in developing countries: The role of foreign direct investments and global value chains," World Development, Elsevier, vol. 113(C), pages 73-88.
    14. Vicol, Mark & Neilson, Jeffrey & Hartatri, Diany Faila Sophia & Cooper, Peter, 2018. "Upgrading for whom? Relationship coffee, value chain interventions and rural development in Indonesia," World Development, Elsevier, vol. 110(C), pages 26-37.
    15. Stefano Ponte, 2008. "Developing a ‘Vertical’ Dimension to Chronic Poverty Research: Some Lessons from Global Value Chain Analysis," Working Papers id:1743, eSocialSciences.
    16. Grumiller, Jan, 2019. "A strategic-relational approach to analyzing industrial policy regimes within global production networks: The Ethiopian Leather and Leather Products Sector," Working Papers 60, Austrian Foundation for Development Research (ÖFSE).
    17. Fucai Lu & Wei He & Yang Cheng & Sihua Chen & Liang Ning & Xiaoan Mei, 2015. "Exploring the Upgrading of Chinese Automotive Manufacturing Industry in the Global Value Chain: An Empirical Study Based on Panel Data," Sustainability, MDPI, vol. 7(5), pages 1-23, May.
    18. Fessehaie, Judith, 2012. "What determines the breadth and depth of Zambia's backward linkages to copper mining? The role of public policy and value chain dynamics," Resources Policy, Elsevier, vol. 37(4), pages 443-451.
    19. Rory Horner, 2022. "Global value chains, import orientation, and the state: South Africa’s pharmaceutical industry," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 68-87, March.
    20. Brandt, Loren & Thun, Eric, 2016. "Constructing a Ladder for Growth: Policy, Markets, and Industrial Upgrading in China," World Development, Elsevier, vol. 80(C), pages 78-95.

    More about this item

    Keywords

    China; industrialization; FDI; upgrading; value-chains; emerging markets; automotive;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:tecipa-395. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RePEc Maintainer (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.