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Are you in the loop? China’s co-evolution dynamics

Author

Listed:
  • Junda Li

    (University of Wisconsin-Madison)

  • Dwayne Woods

    (Purdue University)

Abstract

This paper presents a co-evolutionary framework for analyzing China’s industrial ascent, focusing on sectors such as telecommunications (5G), electric vehicles (EVs), and semiconductors. Challenging linear models of technological upgrading, the study examines how state-market interactions, asymmetric feedback loops, and strategic policy interventions generate diverse developmental paths. Empirical analysis using patent authorization data (2000–2023) reveals distinct outcomes: telecommunications exemplify adaptive growth through state-backed innovation; EVs show initial success but risk stagnation due to market saturation and overcapacity; semiconductors highlight structural vulnerabilities amid geopolitical sanctions. Simulations validate the model, demonstrating sector-specific responses to external shocks. This research advances evolutionary economics by integrating endogenous state–market feedback into industrial strategy, emphasizing managed disequilibrium and resilience.

Suggested Citation

  • Junda Li & Dwayne Woods, 2026. "Are you in the loop? China’s co-evolution dynamics," Journal of Evolutionary Economics, Springer, vol. 36(1), pages 1-41, April.
    • Handle: RePEc:spr:joevec:v:36:y:2026:i:1:d:10.1007_s00191-025-00937-2
    DOI: 10.1007/s00191-025-00937-2
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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