john-sutton-china-2009

advertisement

China’s Industries

• Preliminaries: industry characteristics

• The new industries

• Adjusting: the established industries

• How far has China come?

• Current Trends

σ

Linkages Across Submarkets

β

Effectiveness of Capability

Building

Low

Concentration

Low R&D intensity

High

Concentration

High R&D intensity

Low concentration

Low R&D intensity

Figure 1: Industry Characteristics

σ

Linkages Across Submarkets

Figure 2: Industry Characteristics: Example

The New Industries

• Some well known patterns

• Excess entry (Klepper et al)

• Shake-out/escalation (Klepper, Sutton, etc.)

20

0

80

60

40

20

10

0

80

60

40

20

200

80

60

40

20

100

80

60

40

20

Fridges

W/Machine s

60

50

40

30

100

90

80

70

20

10

Color TVs

78 9

80

1 2 3 4 5 6 7 8 9

90

1 2 3 4 5 6 7 8 9

00

1 2 3

The Established Industries

• Cement

• Steel

• Clothing

• Machine Tools

• Beer

Cement

• High Transport Costs Segment Market

• Regulatory Regime Strengthens This

• A Quiet Life … The BBMG Company

• A Turnaround at Sunnsy

Clothing and Textiles

• Key to Turnaround is Not Privatisation but

Permission to Export Directly (Lanyan)

• Hangsu in Silk: Capability Building and

Direct Exporting

• Ever Glory: Fast Growing Private Firm

Steel

• Slow but Steady Technical Progress

• Key Role Played by Equipment Suppliers

(Jiangsu link with Fuchs)

• Joint Ventures: Jiangsu with Posco

(Korea)

• Still ‘High Volume Moderate Quality’… with a Large Fringe of Small Producers

Machine Tools

• Slow but Adequate Adjustment Towards

CNC Machines

• Transition Cushioned by Profits from

Conventional Machines

• Joint Ventures Established over Past Few

Years are Building Capability in Advanced

CNC Machines (Dalian Company with

Index of Germany etc.)

Beer

• First Moves towards Classic Pattern become Evident

• Interaction of Scale Economies and

Advertising

• Foreign Stakeholders Move In

How Far Has China Come?

• Two Methods –

1. Benchmarking in Autocomponents

2. Trade Statistics by Product Line

0 ppm

-3

00

-7000 -12

000 00

0

Figure 4: Component Suppliers to Multi-National Car Makers

Figure 5: Component Suppliers to Steering Gear Firms

Current Trends

• Seeking a Foothold: Air Conditioners for Saudi

Arabia

• The Nineties see a Move in FDI Away from Low wage Seeking Towards the Pull of the Large

Domestic Market. Illustration from DVD Market etc

• Chinese Firms seek Low Labour Cost Locations

… Ever Glory …

• Making Fridges in Italy … A Reverse Process

Download