As one of emerging economies Chinas spectacular economic growth and

As one of emerging economies chinas spectacular

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As one of emerging economies, China’s spectacular economic growth and unprecedented success have attracted much attention from both academic scholars and policy-makers alike. Undoubtedly, today’s China has been the single most important new development affecting the world economy at the outset of the 21 st century (Elchengreen and Tong, 2007). China’s GDP has been the third largest country in the world after the US and Japan. China is now the world’s sixth largest trader, supplying more than six per cent of global exports, and the leading destination of foreign direct investment. With China’s rapid development, many Chinese firms have already been the leading players in the international market. LUBS research report said that Chinese multinationals could no longer be regarded as ‘apprentices’ on the international stage; they have already been investing in the developed countries to obtain intellectual property and to learn from joint venture partners (LUBS report, Jan. 2009). In the academic field, much attention has focused at macro-economic level on the impact of FDI on China’s economic growth. In the early stage, inward FDI in China was extensively studied. Scholars made consensus that FDI significantly and positively impacted on China’s industrialization as well as productivity (i.e. Kueh, 1992; Wang and Swain, 1995, Liu et al., 2001; Heid and Ries, 1996). Later on, as Chinese firms emerged as a strong group of foreign direct investors in other developed and developing countries, much research effort was switched to Chinese outward FDI and its impact on firm’s development and other countries’ economic growth (i.e. Elchengreen and Tong, 2007). We found that fewer studies at micro-level have considered frameworks that lead to Chinese firms’ catching up. Maybe it is because the number of successful catching up firms from China is not large. Child and Rodrigues (2005) have ever initiated an article aiming to stimulate discussion on this issue. However, as we can see, the studies are still very limited. Yu et al. (2006) gave the evidence that there have been a number of Chinese companies catching up. Duysters et al. (2009) argued in a case study of Haier Group that there is an alternative strategy for many Chinese firms to the much-acclaimed East-Asian route to growth. They all highlighted the importance of strategic alliances in the cases but unfortunately did not pay much attention to explore the catching up framework. Therefore in this study, we seek to identify a framework that part of Chinese firms in ICT industry used for catching up. By taking Huawei Technologies Co. Ltd. as a case work, we try to find out the strategies that Chinese firms used for developing absorptive capacity and innovation performance. Based on the case study of Huawei, we argue that FDI is inter-dependent with strategic alliances in the early stages of catching up and network alliances with universities and other firms effectively facilitate Chinese firm’s development. We are not saying that this network perspective view on catching-up framework is suitable for all
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