Divergent Hybrid Capitalisms in China: Hong Kong and Taiwanese Electronics Clusters in Dongguan

This article explores and compares the changing dynamics and organization of cross-border production by Hong Kong and Taiwanese electronics firms in China, on the basis of more than 40 semistructured interviews with firms from April 2005 to January 2007 in various towns of Dongguan, an emergent “global factory” in south China. Despite initial resemblances, Hong Kong and Taiwanese electronics clusters have adopted different approaches to organize their cross-border production since the late 1990s. Little systemic comparative analysis has been conducted on the causes. The divergent practices can be interpreted as differences in corporate strategies of parent and branch firms, industrial policies in Hong Kong and Taiwan, linkages with global leaders, and home-host interactions in response to the challenges of globalization. To tap into the domestic market of mainland China, Hong Kong companies have tended to become “domestic firms,” while Taiwanese companies have become wholly foreign owned and pursued a “pseudo-location” of suppliers of raw materials and components. The article concludes that more comparative studies are needed on divergent hybrid capitalisms that are driven by different sources of foreign direct investment in various host regions, so as to develop empirical insights into appropriate conceptual frameworks.