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Railroads and the Transformation of China Elisabeth Köll Cambridge MA: Harvard University Press, 2019 xi + 396 pp. £31.95 ISBN 978-0-674-36817-0
Thomas G. Rawski
Journal: The China Quarterly / Volume 239 / September 2019
Published online by Cambridge University Press: 09 September 2019, pp. 833-834
Print publication: September 2019
Edited by Loren Brandt, University of Toronto, Thomas G. Rawski, University of Pittsburgh
Book: Policy, Regulation and Innovation in China's Electricity and Telecom Industries
Published online: 08 June 2019
Print publication: 30 May 2019, pp vii-viii
1 - Policy, Regulation, and Innovation in China's Electricity and Telecom Industries
By Loren Brandt, Thomas G. Rawski
Print publication: 30 May 2019, pp 1-51
China represents a new chapter in ongoing controversy over the use of state intervention to promote innovation and upgrading. This book analyzes the nature and outcome of recent Chinese efforts to accelerate progress toward global technology frontiers in electricity, telecommunications and semiconductors.
Our contributors document impressive absorption and upgrading of a wide array of technologies as well as individual instances of path-breaking innovation. Notable advances include achievement and even extension of global technical standards in particular segments of electricity transmission and thermal power generation along with rising competitive strength in global markets for conventional and nuclear electricity, telecom equipment and software.
We also observe instances – notably semiconductors and wind turbine equipment - in which government efforts to promote innovation have encountered difficulty in penetrating overseas (wind equipment) and even domestic (semiconductors) markets. In addition, we observe consistently high levels of excess capacity and operational inefficiency – for example, the average cost of generating and delivering each unit of electricity is at least 30 percent higher in China than in the United States
Recent initiatives center on the Made in China 2025 plan to develop an extensive array of advanced manufacturing industries. Current strategy emphasizes instruments – self-reliance, channeling resources toward state enterprises, top-down selection of strategic products and technologies and Party control – that have retarded productivity growth in the past, while moving away from openness, competition, private-sector expansion and other measures strongly associated with past increases in productivity.
Telecommunication equipment, a sector that has thrived in an environment of openness and competition, offers a strong contrast to the recent decline in productivity outcomes visible at the industry-wide level and in several electricity-related product categories. Current policies reinforce distorted incentives that can only expand the massive costs associated with excess investment, misallocation and corruption. These costs will act as a powerful counterweight to the extraordinary human, financial and policy resources that China's leaders are now directing toward innovation and upgrading across a broad spectrum of industries.
Print publication: 30 May 2019, pp ix-xi
Appendix - Calculation of Profit-Sales Ratio
from 8 - Growth, Upgrading, and Excess Cost in China's Electric Power Sector
Print publication: 30 May 2019, pp 356-361
Print publication: 30 May 2019, pp xvi-xx
10 - Capability Upgrading and Catch-Up in Civil Nuclear Power: The Case of China
By Ravi Madhavan, Thomas G. Rawski, Qingfeng Tian
Nuclear power epitomizes the unusual combination of quantitative expansion, rapid upgrading of technological, managerial and regulatory capabilities, growing competitiveness, burgeoning global involvement, and also potential economic, environmental and security risk surrounding Chinese innovative efforts. A combination of domestic upgrading and international cooperation has delivered a rapid buildup of capabilities in design, construction, operation, equipment manufacture and regulatory capacity alongside ambitious nuclear investment. Surprising features of China's nuclear buildup include the centrality of enterprise initiative in an industry seemingly dominated by government controls; the strength of nuclear safety oversight in an economy with limited institutional capacity for prudential regulation; and China's sudden and unexpected emergence as a major player in the global market for nuclear power installations – an apparent instance of Christensen's theory of "new market disruption." Despite its impressive advance, China's nuclear sector faces multiple challenges arising from institutional limitations, corruption, conflicts between supply-chain inadequacies and pressure for import substitution, and an ironic confluence of overseas market success with a sudden erosion in the financial underpinnings of nuclear electricity production in China itself.
Appendix 5.1 - Technology Comparison for Four Mobile Phone Handsets
from 5 - When Global Technology Meets Local Standards
Map of China
Print publication: 30 May 2019, pp xxi-xxi
8 - Growth, Upgrading, and Excess Cost in China's Electric Power Sector
By Thomas G. Rawski
China's electricity industry has recorded immense achievements in many areas: growth, technical upgrading and innovation, improved reliability, and universal service. This record of excellence coexists with massive inefficiency. Despite multiple cost advantages, the unit cost of producing, transmitting and delivering electricity is at least 30 percent higher in China than in the United States. Latent potential for cost reduction clusters in coal-fired generation that supplies about two-thirds of total output. New reforms that deepen the influence of market forces will strengthen financial pressures and thus increase the likelihood of achieving potential cost reductions, perhaps increasing the output and share of coal-fired thermal plants.
Print publication: 30 May 2019, pp xv-xv
Print publication: 30 May 2019, pp v-vi
Policy, Regulation and Innovation in China's Electricity and Telecom Industries
Edited by Loren Brandt, Thomas G. Rawski
Print publication: 30 May 2019
Buy the print book
The scale of China's innovation ambitions inspires worldwide commentary, much of it poorly informed. Focusing on electricity, telecommunication and semiconductors, this book offers a richly detailed account of China's innovation efforts. Massive application of human, policy and financial resources shows great promise, but institutional obstacles, conflicting objectives, ill-advised policies and Soviet-era legacies inject inefficiencies, resulting in a complex mosaic of success and failure in both technical and commercial dimensions. State Grid leads the world in high-voltage power transmission, while domestic semiconductors lag behind the international frontier. Electricity and telecom providers record impressive technical advances, but overinvestment and inefficient operation contribute to high costs and prices. Nuclear power combines technical excellence with commercial weakness. Cost reduction rather than new technology underpins commercial success in solar materials. The book's granular studies look beyond specific technologies to incorporate the policy matrix, regulatory structures and global developments into the appraisal of China's innovation achievements.
Print publication: 30 May 2019, pp xii-xiv
Book: China's Great Economic Transformation
Published online: 24 May 2010
Print publication: 14 April 2008, pp xxii-xxii
Print publication: 14 April 2008, pp vii-x
China's Great Economic Transformation
Print publication: 14 April 2008
This landmark study provides an integrated analysis of China's unexpected economic boom of the past three decades. The authors combine deep China expertise with broad disciplinary knowledge to explain China's remarkable combination of high-speed growth and deeply flawed institutions. Their work exposes the mechanisms underpinning the origin and expansion of China's great boom. Penetrating studies track the rise of Chinese capabilities in manufacturing and in research and development. The editors probe both achievements and weaknesses across many sectors, including China's fiscal, legal, and financial institutions. The book shows how an intricate minuet combining China's political system with sectorial development, globalization, resource transfers across geographic and economic space, and partial system reform delivered an astonishing and unprecedented growth spurt.
Print publication: 14 April 2008, pp i-iv