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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

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  • 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. Jin W. Cyhn, 2002. "Technology Transfer and International Production," Books, Edward Elgar Publishing, number 2316.
    2. Vos, Rob & Frenkel, Roberto & Ocampo, José Antonio & Palma, José Gabriel & Marfán, Manuel & Ros, Jaime & Taylor, Lance & Correa, Nelson & Cimoli, Mario, 2005. "Beyond Reforms: Structural Dynamics and Macroeconomic Vulnerability," IDB Publications (Books), Inter-American Development Bank, number 347, November.
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    5. José Antonio Ocampo, 2005. "Beyond Reforms : Structural Dynamics and Macroeconomic Vulnerability," World Bank Publications - Books, The World Bank Group, number 7378.
    6. 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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    3. Sanghoon Ahn & Bronwyn H. Hall & Keun Lee, 2014. "Introduction," Chapters, in: Sanghoon Ahn & Bronwyn H. Hall & Keun Lee (ed.), Intellectual Property for Economic Development, chapter 1, pages 1-8, Edward Elgar Publishing.
    4. Zhou, Qingna & Gao, Ping & Chimhowu, Admos, 2019. "ICTs in the transformation of rural enterprises in China: A multi-layer perspective," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 12-23.
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    6. Ramani, Shyama V. & Urias, Eduardo, 2018. "When access to drugs meets catch-up: Insights from the use of CL threats to improve access to ARV drugs in Brazil," Research Policy, Elsevier, vol. 47(8), pages 1538-1552.
    7. Paus, Eva, 2014. "Latin America and the middle-income trap," Financiamiento para el Desarrollo 36816, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
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    14. Minaee, Mohammadreza & Elahi, Shaban & Majidpour, Mehdi & Manteghi, Manoochehr, 2021. "Lessons learned from an unsuccessful “catching-up” in the automobile industry of Iran," Technology in Society, Elsevier, vol. 66(C).
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