Singapore: NUS Press, 2021. x, 328 pp. (Tables, graphs.) US$32.00, paper. ISBN 9789813251489.
It is widely recognized that innovation is the path countries focus on to increase their economic participation in the global economy, and China is the latest country that is playing catch-up to raise its technological contribution. This book is a timely addition to the literature discussing the policies and strategies that have put China on the path of rapid technological progress. In eleven chapters, the book’s contributors examine incisively some of the major factors of technological catch-up, using methodologies that range from case studies to statistical analysis using large data sets.
Bert Hofman, Erik Baark, and Jiwei Qian do a wonderful job of setting the stage for capturing China’s technological progress for the subsequent chapter contributors, who then go on to not only present the hard data on investments on R&D in the country, but also to analyze the soft but critical geopolitical situation that faces China. Gary H. Jefferson, who addresses this topic in chapter 2, problematizes his two scenarios within an inverted “U”-shaped relationship between technology policy conflict and technology catch-up. This is an interesting vantage to me but does not really warrant a link with Kuznet’s articulation of the inverted “U”-shaped curve between the Gini coefficient of income inequality and GDP growth.
Dan Prud’homme and Baark provide a critical discussion of the evolution of China’s intellectual property rights (IPRs) regime in chapters 3 and 4. Whereas Prud’homme debunks the major myths that characterize China’s governance of IPRs, Baark discusses China’s efforts to promote indigenous innovation, arguing that such efforts are targeted at not only strengthening self-reliance but also at expanding the development of sustainable development technologies.
In chapter 5, Cong Cao and Denis Fred Simon discuss the return of talent to China, and the need for evolving human capital domestically, making the case that it is the scientists, engineers, and technicians, and the business and legal knowledge embodied in human capital, that has transformed China into a high-innovation economy. In doing so, they emphasize the significance of brain gain and brain circulation à la AnnaLee Saxenian and Rajah Rasiah. Chapter 6, by Simon, discusses the impressive international collaboration relationships with 155 countries and execution of their objectives with 100 countries on science and technology issues. Using the international innovation collaboration (IIC) as a case study, Xiaolan Fu, Cintia Külzer-Sacilotto, Haibo Lin, and Hongru Xiong discuss in chapter 7 how China has used conventional and unconventional routes to absorb foreign technology to stimulate innovation in the country, offering interesting implications for the latecomer catch-up literature.
Chapters 8, 9, 10, and 11 examine China’s innovation experience with industrial policies and global value chains. Carsten Holz, in chapter 8, contests the claim that industrial policies since 2004 (and the 2015, Made in China 2025 policy in particular) to constitute the decisive springboard of China’s launch towards becoming an economic power. Indeed, Holz claims that industrial policy has had little or no effect on China’s industrial transformation. Chapter 9, by Anton Malkin, attempts to evaluate the contradictory tensions that have arisen from China’s “Made in China 2025” policy, especially as it relates to the intangible economy, while emphasizing the need to use appropriate metrics to assess its successes and failures. Bai Gao and Yi Ru undertake a comparative study of the role of industrial policy and competitive advantage of the cloud computing industry in China in chapter 10. Drawing from the empirical evidence from Hangzhou and Shenzhen, the authors offer a rich analysis of how a nationally driven instrument, such as cloud computing, has evolved with strong collaborative participation of public and private interests. In chapter 11, Yuqing Xing uses China’s mobile phone industry to demonstrate the importance of global value chains. This chapter offers a rich account of how mobile firms began as contract manufacturers and then leading firms (such as Huawei, Xiaomi, and OPPO) began to face pressure from the United States as Chinese firms began closing in on the technological leadership of their American counterparts.
While all the chapters offer incisive arguments backed by solid empirical evidence to explain China’s march to catch up with developed nations, I would like to address two issues that other studies could consider when undertaking similar projects. The first is the reference to total factor productivity in the introductory chapter as a way of measuring China against developed countries. This is to my mind not a useful reference point, as reflected in the now debunked work of Alwyn Young, who used that model to throw cold water on the technological progress achieved by Hong Kong, Singapore, South Korea, and Taiwan. Evolutionary economists, such as Giovanni Dosi and Rasiah, reject Young’s findings because of his misplaced endogenization. The second point is the need to examine industrial policy using far-sighted models, which may explain the differences in interpretations in the chapters by Holz and that of Gao and Ru.
Rajah Rasiah
Universiti Malaya, Kuala Lumpur