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A Divergent Path of Industrial Upgrading: Emergence and Evolution of the Mobile Handset Industry in China


  • Imai, Ken'ichi
  • Shiu, Jingming


Starting from almost null in the late 1990s, China's mobile phone handset industry has grown to account for more than 40 percent of the current world production. While export growth has been overwhelmingly led by multi-national corporations (MNCs), increasingly fierce competition in the domestic market ignited by the advent of local handset makers has induced unique industrial evolution: (1) outgrowth of independent design houses specialized in handset development and (2) emergence of IC fabless ventures that design core ICs for handsets. In the background of this evolutionary industrial growth there are factors such as, the scale and increasing diversity of China's domestic market that advantages local firms vis-a-vis MNCs; modularization of handset and semiconductor technologies; policy interventions that supports local startups. The emergence and evolution of China's handset industry is likely to have international implications as the growth of the global demand for low-cost and multi-function mobile phone handsets is expected to accelerate. Thus, our case suggests that the conventional view of latecomer industrialization and upgrading that emphasizes the key role of international production networks organized by MNCs needs to be modified in order to accommodate China's rise into perspective.

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  • Imai, Ken'ichi & Shiu, Jingming, 2007. "A Divergent Path of Industrial Upgrading: Emergence and Evolution of the Mobile Handset Industry in China," IDE Discussion Papers 125, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  • Handle: RePEc:jet:dpaper:dpaper125

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    References listed on IDEAS

    1. Dieter Ernst & Paolo Guerrieri, 1998. "International production networks and changing trade patterns in East Asia: The case of the electronics industry," Oxford Development Studies, Taylor & Francis Journals, vol. 26(2), pages 191-212.
    2. Hobday, Mike, 1995. "East Asian latecomer firms: Learning the technology of electronics," World Development, Elsevier, vol. 23(7), pages 1171-1193, July.
    3. Imai, Ken'ichi, 2006. "Explaining the Persistence of State-ownership in China," IDE Discussion Papers 64, Institute of Developing Economies, Japan External Trade Organization(JETRO).
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    Cited by:

    1. Ke Ding & Jiutang Pan, 2014. "The shanzhai cell phone: platforms and small business dynamics," Chapters,in: The Disintegration of Production, chapter 4, pages 101-126 Edward Elgar Publishing.
    2. Sturgeon, Timothy J. & Kawakami, Momoko, 2010. "Global value chains in the electronics industry : was the crisis a window of opportunity for developing countries ?," Policy Research Working Paper Series 5417, The World Bank.
    3. Kawakami, Momoko, 2008. "Exploiting the Modularity of Value Chains: Inter-firm Dynamics of the Taiwanese Notebook PC Industry," IDE Discussion Papers 146, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Kimura, Koichiro, 2009. "The Technology Gap and the Growth of the Firm: A Case Study of China's Mobile-phone Handset Industry," IDE Discussion Papers 214, Institute of Developing Economies, Japan External Trade Organization(JETRO).

    More about this item


    Industrial upgrading; China’s industrial growth; China; Telephone; Information services industry; 産業高度化; 中国の産業発展; 中国; 電話; 情報産業;

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • P2 - Economic Systems - - Socialist Systems and Transition Economies

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