Professional Documents
Culture Documents
ZHU Hengyuan - From Imitation To Innovation-Lessons of Industry Upgrading in China PDF
ZHU Hengyuan - From Imitation To Innovation-Lessons of Industry Upgrading in China PDF
8000
GDP per Capital ($)
7000
GDP per Capital($)
6000
5000
4000
3000
China Indonesia
2000
1000
0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
30
25
20
15 China Indonesia
10
5
0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: World Bank
China Industry Upgrading
China’s Processing trade VS General Trade China's Technology-Intensive Exports VS Labor-Intensive Exports
Percentage
Percentage
Source: Wind
China Industry Upgrading
China's ODI&FDI
$1,400.00
$1,200.00
$1,000.00
US DOLLAR
$800.00
$600.00
$400.00
$200.00
$-
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
ODI FDI
2.5
40000
2
30000
1.5
20000
1
10000
0.5
0 0
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2500.0
Production
2000.0
Quantity(M)
1500.0
1000.0
500.0
Sales
2500
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2000
Global Production(M) China Production(M)
Quantity(M)
1500
1000
500
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Before Chip
Vertically integrated branded manufactures (all foreign brand) Mobile operators
manufacturers
1997
First wave of innovation
Brand &
Components Design Manufacture Retail
Market
Chip
Vertically integrated branded OEMs Mobile operators
Before manufacturers
1997
Chip
Vertically integrated branded OEMs Retailers Customers
manufacturers
1997 - 1999
Chip
Vertically integrated branded OEMs Mobile operators
manufacturers
Before
1997
Chip
Vertically integrated branded OEMs Retailers Customers
manufacturers
Innovators
Partners
Bird,TCL,
Kejian Wavecom
Then the third…
Brand &
Components Design Manufacture Retail
Market
Chip
Vertically integrated branded OEMs Mobile operators
Before manufacturers
1997
Chip manufacturers
(provide integrated Design companies
2004 -2008
solution )
OEMs Licensed domestic manufacturers Customers
Chip manufacturers + Design companies
Independent Design House(2004-2005):
Independent design house Manufacturing power
Innovators Partners
Bridging global chipset providers and stronger indigenous Bird,TCL, CECW
manufacturing power Amoi, TechFaith
Fast and cost-effective product design and production to cater Kejian
rapidly evolving consumer preferences
Here comes the turn-key solution
Brand &
Components Design Manufacture Retail
Market
Chip
Vertically integrated branded OEMs Mobile operators
Before manufacturers
1997 MTK (联发科) is a famous Taiwan Chip manufacture, found
in 1997. MTK first entered into Mainland market in 2004
cooperating with Tianyu and then expanded its business.
Chip
Vertically integrated branded OEMs Retailers Customers
1997 - 1999
manufacturers
Tianyu, found in 2002, once was the largest ‘Shanzhai’
mobile phone manufacture, relying on the integrated
solution provided by MTK, now has huge sales portion.
Vertically integrated branded OEMs Retailers
Chip
manufacturers
Module providers domestic manufacturers
2000 - 2003 Customers
Chip manufacturers
OEMs Fulfilment Distributor
(provide integrated solution )
Chip manufacturers
(provide integrated Design companies
2004 - 2006
solution )
OEMs Licensed domestic manufacturers Customers
Chip manufacturers + Design companies
Turnkey Solutions(2006-2008):
Outsourcing manufacturing power Innovative channel strategies
Innovators Partners
Mass customized products to take over the low-end markets Tianyu MTK
Lenovo
Forcing multinational firms to adjust their product and
channel strategies
Capability accumulation in function phone era
Brand&
Components Design Manufacture Retail
market
Chip
Before 1997 manufact Vertically integrated branded OEMs Mobile operators
urers
Chip
1997-1999 Vertically integrated branded OEMs Retailers Customers
manufactur
ers
2000-2003
Vertically integrated branded OEMs Retailers
Chip Custom
manufacturers ers
Module providers domestic manufacturers
Foreign
2004-2008 manufacturers
OEMs foreign brands Retailers
Chip manufacturers
Custom
(provide integrated Chained direct sellers ers
solution )
Design companies OEMs Licensed domestic manufacturers
Smartphone era: go global
From exploration to exploitation
Two giants enter…
Xiaomi: Low-cost products
• Starting from 2009
• Custom-focused Innovation
• Designed Mi4i smartphone –a lower cost version of the
Chinese Mi4 smartphone in Indian Market.
• Planning to build an R&D center, a manufacturing facility,
a data center and a technical support center in India.
Source:TrendFroce
Looking ahead…
China faces an innovation imperative
The labor force is no longer growing Return on fixed asset investment is declining
Aging is expected to It takes 60% more capital
reduce the working-age to generate a unit of GDP
population by 16% by than it did from 1990 to
2050 2010
600
People(000)
500
200
100