Economic liberalisation for high-tech industry development ? Lessons from China’s response in developing the ICT manufacturing sector compared with the strategies of Korea and Taiwan.

Abstract

This paper argues that China's response to economic liberalisation, which artificially focuses on promoting particular sizes of firms, cannot improve technological capabilities in the ICT manufacturing industry. Not only have historical and economic conditions created difficulties in adopting Korean and Taiwanese style policies, but also competitive ICT firms in the global economy are increasingly moving from manufacturing to innovation activities against a backdrop of increasing economic liberalisation. Given the WTO and ITA agreements, the main path which Korea and Taiwan employed is now unavailable. The government therefore should leave the size of firms to market forces.