Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry

Hans W. Gottinger

doi:doi:10.11648/j.ijber.20130202.12

| Peer-Reviewed

Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry

Hans W. Gottinger

Published in International Journal of Business and Economics Research (Volume 2, Issue 2)

Received: 6 May 2013 Accepted: Published: 10 June 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

In this paper we trace the industry development of Chinese suppliers and competitors in the telecommunications industry.The observation period goes from the mid 1980s to about today.In the first stage we observe that Chinese startups targeted the basic need for infrastructural development in telecommunications in Western and rural China in supplying low cost telecommunications gear to those areas which were less lucrative for foreign vendors and joint ventures and were heavily encouraged by the Chinese national government in a sort of nurturing its own infant industry. This kind of asymmetic competition separated the startups from the established players in the Chinese market. We call it the separation stage. In the course of this stage the initiating’three horsemen’ underwent technological learning either through indigenous innovation or imitation of some sort,therefore gaining competitive strength and competing against foreigners on large scale projects in the Chinese market. This led to the convergence stage. When asymmetric competition turns symmetric we observe competitive convergence , in which each technology’s development is directed at expanding its appeal not only in its own home market but in its rival’s as well. While the Chinese companies with the implicit support of the Chinese government continued to gain market share against foreign competitors and as their technological learning advanced product quality at lower cost they expanded in actively seeking to bid successfully for telecommunications projects in developing and emerging economies where they gained further strength by competing on given product quality and lower prices. This is the globalization stage.

Published in	International Journal of Business and Economics Research (Volume 2, Issue 2)
DOI	10.11648/j.ijber.20130202.12
Page(s)	22-32
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Business History, Strategy, Technology (Innovation) Management, Industry Development, Globalization

References

[1]	Boorman,S. (1969) The Protracted Game: A Wei-Ch’i Interpretation of Maoist Revolutionary Strategy’, New York: Oxford Univ. Press
[2]	Bloomberg-Business Week(2012),’ZTE aims to pass rival Huawei in smartphone sales in China’, Jan.17
[3]	Business Week(2007), ’Huawei’s R&D Pot Rivals Western Firms’, Sept.11
[4]	Business Week(2008),’China’s Huawei Rides the Smartphone Wave’, June 1
[5]	Cheng,D. and Liu,L.(2003) The Truth of Huawei, Beijing:Contemporary China Press
[6]	China Top 100 Electronics Company List(2003), www.ittop100.gov.cn/search
[7]	The Economist(2008),’ZTE Silent Mode. An emerging Chinese telecoms giant is growing steadily-and stealthily’, Oct.14
[8]	The Economist(2009),’Up and Up and Huawei’,Sept.22
[9]	The Economist(2012),’Huawei. The Company that spooked the World, Aug. 2
[10]	Edquist,C. (2003), The Internet and Mobile Telecommunications System of Innovation- Developments in Equipment, Access and Content, London: Elgar
[11]	DeWoskin,J.(2001),’The WTO and the telecom sector in China’,The China Quarterly, pp. 630-654
[12]	Dittberner(2004)’Worldwide digital switching status and forecast’, www.huawei.com.cn/about/yeji.shtml
[13]	Fan,P.(2006),’Catching up through developing innovation capability:evidence from China’s telecom-equipment industry’, Technovation 26, 359-368
[14]	Gottinger,H.W.(2006), Innovation, Technology and Hypercompetition, London: Routledge
[15]	Gottinger,H.W. (2009), Strategic Economics of Network Industries, New York: Nova Science
[16]	Govindarajan,V. and Trimble,C. (2012), Reverse Innovation, Boston: Harvard Business Press
[17]	Kissinger,H., On China, New York: The Penguin Press
[18]	IBM Institute for Business Value (2004),The Growth Triathlon, pp.1-29.
[19]	IBM Global Services, Somers, NJ
[20]	Lee,K., Cho,S-J and J.Jin(2009), Dynamics of Catch-up in Mobile Phones and Automobiles in China: A Sectoral System of Innovation Perspective, Chinese Economic Journal 1, 2009, May, 1-34
[21]	Li, Cheng(2006),’China’s Telecom Industry on the Move:Domestic Competition, Global Ambition, and Leadership Transition’, China Leadership Monitor 19,Sept. 22, www.media.hoover.org/documents/clm19_cl.pdf
[22]	Li Sun,S. (2009), Internationalization Strategy of MNEs fom Emerging Economies: The Case of Huawei, Multinational Business Review 17(2), 2009, 129-155
[23]	Ministry of Information Industries (1994-2003),’The development status of Chinese telecommunication industry in 2003, www.mii.gov.cn/mii/hyzw/tongji/tongjifenzi200312.htm
[24]	Ministry of Information Industry(1991-2003). The annual statistics report of telecommunication industry, www.mii.gov.cn/mii/hyzw/tjxx.html
[25]	Nakai,Y. and Tanaka,Y.(2010),’Chinese Company’s IPR Strategy: How Huawei Technologies succeeded in dominating overseas markets by Sideward Crawl Crab Strategy’, PICMET Proceedings, July 18-22, Phuet,Thailand, 650-654
[26]	Naughton,B. (2007), The Chinese Economy, Transitions and Growth, Cambridge: MIT Press
[27]	Porter,M.E.(2004),Competitive Strategy, New York: Free Press
[28]	Scherer,F.M.(1992),International High Technology Competition, Cambridge: Harvard Univ. Press
[29]	Tirole,J.(1989), The Theory of Industrial Organization, Cambridge: MIT Press
[30]	Varian,H. and Shapiro,C.(1999), Information Rules, Boston: Harvard Business Press
[31]	The Wall Street Journal(2004),’Chinese telecommunication equipment suppliers in the international market’,Feb.26
[32]	The Wall Street Journal(2005),’France’s Alcatel Feels Pressure from the East’, Feb.10
[33]	The Wall Street Journal (2012a),’Huawei’s handset progress could squeeze big players’, March 7
[34]	The Wall Street Journal (2012b),’Huawei aims for higher profile in smartphones’, March 8
[35]	The Wall Street Journal (2012c),’Huawei aims to become more mature’, Asia Technology,March 18
[36]	The Wall Street Journal(2012d),’Cisco CEO sees China’s Huawei as its toughest rival’, April 6
[37]	The Wall Street Journal (2012e),’China Warns Huawei Report could harm U.S. China Relations’,Oct.9
[38]	Yasuyuki,M.(1995), An Asian Paradigm for Business Strategy, Tokyo: The Ishi Press
[39]	Zhang,W. and Igel,B.,’Managing the product development of China’s SPC Switch industry as an example CoPS’, Technovation 21, 361-368
[40]	ZTE (2003),’ZTE’s three phases of development’ www.zte.com.cn/about/about 2-2asp.,Nov.

Cite This Article

Plain Text BibTeX RIS

APA Style

Hans W. Gottinger. (2013). Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry. International Journal of Business and Economics Research, 2(2), 22-32. https://doi.org/10.11648/j.ijber.20130202.12

Copy | Download

ACS Style

Hans W. Gottinger. Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry. Int. J. Bus. Econ. Res. 2013, 2(2), 22-32. doi: 10.11648/j.ijber.20130202.12

Copy | Download

AMA Style

Hans W. Gottinger. Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry. Int J Bus Econ Res. 2013;2(2):22-32. doi: 10.11648/j.ijber.20130202.12

Copy | Download

@article{10.11648/j.ijber.20130202.12,
  author = {Hans W. Gottinger},
  title = {Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry},
  journal = {International Journal of Business and Economics Research},
  volume = {2},
  number = {2},
  pages = {22-32},
  doi = {10.11648/j.ijber.20130202.12},
  url = {https://doi.org/10.11648/j.ijber.20130202.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20130202.12},
  abstract = {In this paper we trace the industry development of Chinese suppliers and competitors in the telecommunications industry.The observation period goes from the mid 1980s to about today.In the first stage we observe that Chinese startups targeted the basic need for infrastructural development in telecommunications in Western and rural China in supplying low cost telecommunications gear to those areas which were less lucrative for foreign vendors and joint ventures and were heavily encouraged by the Chinese national government in a sort of nurturing its own infant industry. This kind of asymmetic competition separated the startups from the established players in the Chinese market. We call it the separation stage.  In the course of this stage the initiating’three horsemen’ underwent technological learning either through indigenous innovation or imitation of some sort,therefore gaining competitive strength and competing against foreigners on large scale projects in the Chinese market. This led to the convergence stage. When asymmetric competition turns symmetric we observe competitive convergence , in which each technology’s development is directed at expanding its appeal not only in its own home market but in its rival’s as well. While the Chinese companies with the implicit support of the Chinese government continued to gain market share against foreign competitors and as their technological learning advanced product quality at lower cost they expanded in actively seeking to bid successfully for telecommunications projects in developing and emerging economies where they gained further strength by competing on given product quality and lower prices. This is the globalization stage.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry
AU  - Hans W. Gottinger
Y1  - 2013/06/10
PY  - 2013
N1  - https://doi.org/10.11648/j.ijber.20130202.12
DO  - 10.11648/j.ijber.20130202.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 22
EP  - 32
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20130202.12
AB  - In this paper we trace the industry development of Chinese suppliers and competitors in the telecommunications industry.The observation period goes from the mid 1980s to about today.In the first stage we observe that Chinese startups targeted the basic need for infrastructural development in telecommunications in Western and rural China in supplying low cost telecommunications gear to those areas which were less lucrative for foreign vendors and joint ventures and were heavily encouraged by the Chinese national government in a sort of nurturing its own infant industry. This kind of asymmetic competition separated the startups from the established players in the Chinese market. We call it the separation stage.  In the course of this stage the initiating’three horsemen’ underwent technological learning either through indigenous innovation or imitation of some sort,therefore gaining competitive strength and competing against foreigners on large scale projects in the Chinese market. This led to the convergence stage. When asymmetric competition turns symmetric we observe competitive convergence , in which each technology’s development is directed at expanding its appeal not only in its own home market but in its rival’s as well. While the Chinese companies with the implicit support of the Chinese government continued to gain market share against foreign competitors and as their technological learning advanced product quality at lower cost they expanded in actively seeking to bid successfully for telecommunications projects in developing and emerging economies where they gained further strength by competing on given product quality and lower prices. This is the globalization stage.
VL  - 2
IS  - 2
ER  -

Copy | Download

Author Information

Hans W. Gottinger

STRATEC Munich Germany

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Hans W. Gottinger. (2013). Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry. International Journal of Business and Economics Research, 2(2), 22-32. https://doi.org/10.11648/j.ijber.20130202.12

Copy | Download

ACS Style

Hans W. Gottinger. Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry. Int. J. Bus. Econ. Res. 2013, 2(2), 22-32. doi: 10.11648/j.ijber.20130202.12

Copy | Download

AMA Style

Hans W. Gottinger. Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry. Int J Bus Econ Res. 2013;2(2):22-32. doi: 10.11648/j.ijber.20130202.12

Copy | Download

@article{10.11648/j.ijber.20130202.12,
  author = {Hans W. Gottinger},
  title = {Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry},
  journal = {International Journal of Business and Economics Research},
  volume = {2},
  number = {2},
  pages = {22-32},
  doi = {10.11648/j.ijber.20130202.12},
  url = {https://doi.org/10.11648/j.ijber.20130202.12},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20130202.12},
  abstract = {In this paper we trace the industry development of Chinese suppliers and competitors in the telecommunications industry.The observation period goes from the mid 1980s to about today.In the first stage we observe that Chinese startups targeted the basic need for infrastructural development in telecommunications in Western and rural China in supplying low cost telecommunications gear to those areas which were less lucrative for foreign vendors and joint ventures and were heavily encouraged by the Chinese national government in a sort of nurturing its own infant industry. This kind of asymmetic competition separated the startups from the established players in the Chinese market. We call it the separation stage.  In the course of this stage the initiating’three horsemen’ underwent technological learning either through indigenous innovation or imitation of some sort,therefore gaining competitive strength and competing against foreigners on large scale projects in the Chinese market. This led to the convergence stage. When asymmetric competition turns symmetric we observe competitive convergence , in which each technology’s development is directed at expanding its appeal not only in its own home market but in its rival’s as well. While the Chinese companies with the implicit support of the Chinese government continued to gain market share against foreign competitors and as their technological learning advanced product quality at lower cost they expanded in actively seeking to bid successfully for telecommunications projects in developing and emerging economies where they gained further strength by competing on given product quality and lower prices. This is the globalization stage.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Chinese Innovation and Competition: An Industry Case of the Global Telecommunications Equipment Industry
AU  - Hans W. Gottinger
Y1  - 2013/06/10
PY  - 2013
N1  - https://doi.org/10.11648/j.ijber.20130202.12
DO  - 10.11648/j.ijber.20130202.12
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 22
EP  - 32
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20130202.12
AB  - In this paper we trace the industry development of Chinese suppliers and competitors in the telecommunications industry.The observation period goes from the mid 1980s to about today.In the first stage we observe that Chinese startups targeted the basic need for infrastructural development in telecommunications in Western and rural China in supplying low cost telecommunications gear to those areas which were less lucrative for foreign vendors and joint ventures and were heavily encouraged by the Chinese national government in a sort of nurturing its own infant industry. This kind of asymmetic competition separated the startups from the established players in the Chinese market. We call it the separation stage.  In the course of this stage the initiating’three horsemen’ underwent technological learning either through indigenous innovation or imitation of some sort,therefore gaining competitive strength and competing against foreigners on large scale projects in the Chinese market. This led to the convergence stage. When asymmetric competition turns symmetric we observe competitive convergence , in which each technology’s development is directed at expanding its appeal not only in its own home market but in its rival’s as well. While the Chinese companies with the implicit support of the Chinese government continued to gain market share against foreign competitors and as their technological learning advanced product quality at lower cost they expanded in actively seeking to bid successfully for telecommunications projects in developing and emerging economies where they gained further strength by competing on given product quality and lower prices. This is the globalization stage.
VL  - 2
IS  - 2
ER  -

Copy | Download