How Did Chinese Bureaucracy Stifle Innovation

Three Takeaways From China’s New Standards Strategy. The Chinese government has unveiled plans to reshape a vast array of technical standards that shape the products and services that consumers around the world rely on, but Beijing’s designs could spawn unintended consequences.

China has always employed a far more state-centric approach to standardization than the United States and Europe have. But within the bounds of that approach, Beijing’s new strategy provides a nudge toward a greater role for industry actors in the development of technical standards.

  • Inching Toward Industry
  • Striving to Improve Competitiveness
  • Seeking International Alignment, for Better or Worse
  • Responding to China’s New Strategy

Video advice: Chinese academic research impeded by country’s bureaucracy

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In October 2021, China’s State Council released its national strategy for technical standards, a long-awaited document about an often-misunderstood aspect of the technology landscape. Such standards are the technical specifications that shape the products, services, and processes consumers rely on every day, including everything from the dimensions of a cargo container to the protocols for routing internet traffic. These specifications are often highly influential: they allow products from different companies and countries to work seamlessly together, and they also help customers find and compare products or have confidence in the safety and performance of those products.

Why China Can’t Innovate

And What It’s Doing About It.

Certainly, China has proven innovation through creative adaptation in recent decades, also it now has the ability to do a lot more. But could China lead? Will china condition possess the knowledge to lighten and also the persistence to permit the entire emergence of the items Schumpeter known as the real spirit of entrepreneurship? About this we’ve our doubts.

Innovation Through the Next Generation

China has no lack of entrepreneurs, market demand, or wealth, but can the country succeed in its quest to become the world’s innovation leader? For nearly 40 years, the government has been establishing research programs and high-tech zones, encouraging domestic firms to boost their innovation capacity, and helping colleges and universities flourish. Recently it declared its intention to transform China into “an innovative society” by 2020 and a world leader in science and technology by 2050.

Reverse innovation transfer in Chinese MNCs: The role of political ties and headquarters

Innovation augmentation via internationalization is motivated by headquarters entrepreneurial role in Chinese multinationals. Drawing on the parenting…

Keywords – View PDFUnder an innovative Commons licenseopen accessAbstractInnovation augmentation via internationalization is motivated by headquarters entrepreneurial role in Chinese multinationals. Applying the parenting theory, this paper investigates the results of headquarters’ political ties and the quality of internationalization on headquarters competence contribution to subsidiary and also the extent of reverse innovation transfer. With different survey of 177 subsidiaries in 99 Chinese multinationals via two questionnaires, the empirical results reveal that, while the quality of internationalization enhances both headquarters’ entrepreneurial role in supplying competence to subsidiary, and subsidiary reverse innovation transfer efforts, the effectiveness of headquarters’ political ties in your home country has harmful effects on the quality of internationalization as well as on headquarters’ competence contribution to subsidiaries, which eventually hinders reverse innovation transfer practices. Which means that, although internationalization may unlock benefits for Chinese multinationals, their political ties may hinder their fulfillment.

Will China’s Huge Tech Sector Crackdown Stifle Innovation?

Whether it’s billionaire tech giants or online tutoring CEOs or big-name celebrities, the CCP will not tolerate competition for power and influence.

Within an August 17, 2021, speech using the Central Committee for Financial and Economic Matters, General Secretary Xi Jinping said that common success is “essential to socialism. ” Common success has made an appearance several occasions in condition-backed media as well as in Xi’s other speeches, including the hundredth anniversary from the founding from the Communist Party.

Common Prosperity

Didi Chuxing (Didi Global, Inc. ), the largest ride-hailing company in the world, was reprimanded when it opened on the New York Stock Exchange after regulators warned it needed to shore up its data security issues. Meituan, China’s massive shopping and coupon app, was recently fined $533 million for “anticompetitive behavior. ” Alibaba, owned by tech billionaire Jack Ma, had to pay a $2. 8 billion fine for the same reasons. Antitrust regulators dinged Tencent, Baidu (China’s Google alternative), ByteDance (parent company for TikTok), and ecommerce company JD. com Inc.

How China’s Policies Have Stifled Global Innovation

A new report from the Information Technology and Innovation Foundation shows that Chinese policies have stifled foreign innovation.

Quite simply, the price of the very first method is very high, while subsequent products tend to be less pricey. Think software or jet aircraft. During these industries, bigger markets better enable firms to amortize individuals fixed costs over more sales, so unit costs could be lower and revenues for reinvestment in innovation greater. Firms in many innovation industries are, therefore, global.


Video advice: Exploring the links between business and the Chinese bureaucracy

Why did Shenzhen, a backwater fishing village, spawn the likes of industry leaders ZTE, Huawei, and Lenovo, while Suzhou, which previously scored massive investments from top “dragon head” foreign firms like Samsung and Philips, failed to spawn domestic innovation? What role did FDI and the local bureaucrats in charge of economic development play? And what lessons does this story hold for today’s Chinese industrial policy as well as development and innovation economics more broadly? For answers, we turn to Ling Chen, an assistant professor at the Johns Hopkins School of Advanced International Studies, and the author of the recent book Manipulating Globalization: The Influence of Bureaucrats on Business in China.


Unfair Advantage

As a result, Chinese crystalline solar PV prices decreased by 85% between 2009 and 2017 — and China exported 38% of the world’s solar panels in 2018. If the Chinese firms were innovation leaders, this might advance clean energy innovation. But they are not. At least through the 2000s, Chinese solar firms invested a much lower percentage of revenue on R&D compared with American and European solar firms — and clean energy patents in China were 4% of U.S. levels, when controlling for population.

China’s New Power Play: More Control of Tech Companies’ Troves of Data – Beijing is calling on tech giants to share the huge amounts of personal information they collect—and asserting its authority over data held by U.S. companies operating there as well. The efforts are part of Xi Jinping’s push to rein in the country’s increasingly powerful technology sector and use it to his party’s advantage.

Shortly after rising to power in late 2012, Xi Jinping made his first company visit in his new job as China’s Communist Party chief, to Tencent Holdings Ltd. There, he raised a topic that has become both an opportunity and a challenge for his rule: the vast troves of personal data being gathered by the country’s technology companies.

Beijing’s Tech Sector Crackdown Sends a Clear Warning to Companies Going Global

By Josh Bramble Beijing has pursued a multi-pronged approach to rein in Chinese technology firms and shore up its political power over private enterprises. The crackdown encompasses several overlapping measures, including scrutinizing the initial public offerings (IPOs) of major internet companies, proposing broad new rules to limit overseas public listings, and introducing sweeping data security laws. Although these moves create a self-inflicted economic wound by restraining China’s top tech companies, Beijing has made clear that it is willing to suffer significant costs in order to exert political control. China’s prominent internet companies listing on US exchanges are among the primary targets of Beijing’s current campaign against big tech. One of the most high-profile victims to fall prey to the government’s crackdown is Chinese ride-hailing giant Didi. The Cyberspace Administration of China (CAC) allegedly warned Didi to delay its IPO and conduct an internal cybersecurity review as early as three months before it went public. However, in the absence of a direct order, coupled with mounting pressure from investors, Didi proceeded with its listing in what was the second-largest IPO in the United States by a Chinese firm. Days later, Didi found itself in the center of a regulatory firestorm. The crackdown began with a cybersecurity review of the company and was followed by the removal of Didi’s app from Chinese app stores. Beijing moved swiftly against Didi, halting new user registrations for a review period of up to 45 days. The CAC and six other ministries, including the Ministry of State Security and the Ministry of Public Security, stationed themselves within Didi’s offices to conduct China’s first cybersecurity review of a private firm. Although it did not release details of its probe on Didi, the CAC announced that any company with data on at least one million users would need to go through a cybersecurity review process before listing abroad. Didi is not alone in facing heightened pressure from Beijing.

However, economic dynamism cannot come at the fee for the party’s political control. Internet companies formerly enjoyed a time period of growth that they could be employed in a regulatory grey zone, but Beijing is becoming cautious about what it really views the “ topsy-turvy growth of capital ” and it is more and more prepared to make a good example from high-profile companies.

Beijing has pursued a multi-pronged approach to rein in Chinese technology firms and shore up its political power over private enterprises. The crackdown encompasses several overlapping measures, including scrutinizing the initial public offerings (IPOs) of major internet companies, proposing broad new rules to limit overseas public listings, and introducing sweeping data security laws. Although these moves create a self-inflicted economic wound by restraining China’s top tech companies, Beijing has made clear that it is willing to suffer significant costs in order to exert political control.

Why China crushed its tech giants

After years of breakneck growth at the likes of Alibaba and ByteDance, China is pulling ranks on its own Big Tech darlings.

China’s ban on all cryptocurrency transactions, announced on Friday, is only the latest of a number of bombshells that more than only one year have profoundly reshaped the nation’s technological landscape. It isn’t just bitcoin miners, crypto-traders, or video gamers which have all of a sudden found themselves in Beijing’s crosshairs. Generally it’s China’s largest internet platforms which have been feeling heat. One to another, tech giants like Ant, Meituan, and Didi happen to be targets of antitrust probes. It has intersected having a tightening of information protection regulation, which is viewed as a nationwide security issue, along with a general drive to curb capitalist excess. Ride-hailing firm Didi, for example, hasn’t just belong to antitrust scrutiny: 2 days after its New You are able to IPO in June, it had been made to stop accepting new users while regulators investigated accusations it could leak user data towards the US. Only a couple of years back, China’s technology companies accustomed to appear safe from regulation. Their CEOs were idolised.


Video advice: Peter Lorentzen: Does China’s bureaucracy work?

There has been significant debate amongst Western analysts regarding the corruption that exists in the Chinese bureaucracy. Peter Lorentzen analyses the pattern of promotions in Chinese politics, exploiting the fact that promotions are based on the judgement of one’s performance by their superiors. He finds that whilst people who got promoted for little reason faced an increased likelihood of being arrested on corruption charges in the future, this did not apply to associates of President Xi Jinping.


[FAQ]

Why China crushed its tech giants?

One after another, tech giants like Ant, Meituan, and Didi have been targets of antitrust probes. ... This has intersected with a tightening of data protection regulation, which is seen as a national security issue, and a general drive to curb capitalist excess.

Does China practice innovation corporate or economic mercantilism?

But most of China's innovation policies are mercantilist in nature and have reduced global innovation. As China seeks to win in even more advanced-technology industries, its policies will likely have an increased negative effect on innovation unless market-oriented, rule-of-law nations take stronger action.

What is a Chinese innovation?

The Chinese invented gunpowder, the compass, the waterwheel, paper money, long-distance banking, the civil service, and merit promotion. Until the early 19th century, China's economy was more open and market driven than the economies of Europe.

Does China have innovation?

According to the Global Innovation Index, “ China stands out for producing innovations that are comparable to those of the high-income group”. Not surprisingly, China also has some of the world's most innovative tech companies according to the Boston Consulting Group.

Why is China cracking down on its tech industry?

How is China cracking down? With fines, regulatory orders and forced restructurings. In late July China ordered more than two dozen tech companies to carry out internal inspections and address issues such as data security.

Erwin van den Burg

Stress and anxiety researcher at CHUV2014–present
Ph.D. from Radboud University NijmegenGraduated 2002
Lives in Lausanne, Switzerland2013–present

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