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Assessing China's Economic Catch-Up at the Firm Level and Beyond: Washington Consensus, East Asian Consensus and the Beijing Model

Author

Listed:
  • Keun Lee
  • Mansoo Jee
  • Jong-Hak Eun

Abstract

This paper takes a new Schumpeterian economics approach in examining firm-level technological catch-up strategies in China. We focus on the strategies for learning and gaining access to a foreign knowledge base. We also underline unique Chinese features, including forward engineering (i.e. the role of university spin-off firms) in contrast to reverse engineering, acquisition of technology and brands through international mergers and acquisitions (M&A), and parallel learning from foreign direct investment (FDI) to promote indigenous companies. These features comprise the Beijing model because they were not explicitly adopted by either Korea or Taiwan. At the macro and aggregate levels, we find that China follows the “East Asian sequencing” rather than the Washington Consensus. We also discuss several challenges facing China, such as design capabilities and localization of intermediate parts. We conclude that the Chinese industry will not remain a low-end original equipment manufacturer (OEM) economy but will rise to the level of high-end or brand producers.

Suggested Citation

  • Keun Lee & Mansoo Jee & Jong-Hak Eun, 2011. "Assessing China's Economic Catch-Up at the Firm Level and Beyond: Washington Consensus, East Asian Consensus and the Beijing Model," Industry and Innovation, Taylor & Francis Journals, vol. 18(5), pages 487-507.
  • Handle: RePEc:taf:indinn:v:18:y:2011:i:5:p:487-507
    DOI: 10.1080/13662716.2011.583463
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    References listed on IDEAS

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    1. repec:idb:idbbks:347 is not listed on IDEAS
    2. José Antonio Ocampo, 2005. "Beyond Reforms : Structural Dynamics and Macroeconomic Vulnerability," World Bank Publications, The World Bank, number 7378, July.
    3. Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, March.
    4. repec:idb:brikps:59518 is not listed on IDEAS
    5. Rob Vos & Roberto Frenkel & José Antonio Ocampo & José Gabriel Palma & Manuel Marfán & Jaime Ros & Lance Taylor & Nelson Correa & Mario Cimoli, 2005. "Beyond Reforms: Structural Dynamics and Macroeconomic Vulnerability," IDB Publications (Books), Inter-American Development Bank, number 59518 edited by José Antonio Ocampo, February.
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    Citations

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    Cited by:

    1. He, Xiyou & Mu, Qing, 2012. "How Chinese firms learn technology from transnational corporations: A comparison of the telecommunication and automobile industries," Journal of Asian Economics, Elsevier, vol. 23(3), pages 270-287.
    2. Sanghoon Ahn & Bronwyn H. Hall & Keun Lee, 2014. "Introduction," Chapters,in: Intellectual Property for Economic Development, chapter 1, pages 1-8 Edward Elgar Publishing.
    3. Paus, Eva, 2014. "Latin America and the middle-income trap," Financiamiento para el Desarrollo 250, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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