Global Linkages, the Chinese High-tech Community and Industrial Cluster Development

Abstract

The development of industrial clusters in China has become a subject of international interest, but attention has primarily focused on government efforts to attract FDI to promote industrial clusters and regional development. The local process which supports the rise and growth of clusters driven by the domestic firms has been relatively ignored in this debate. Thus, this article considers the analytical framework of strategic coupling and uses a case study of the Wuxi semiconductor industry to investigate the cluster formation, dynamics and effects driven by domestic, rather than FDI, firms with the mediating role of the transnational Chinese technical community, the state and domestic firms. It concludes that the rise and growth of the semiconductor domestic-led cluster in Wuxi is not dependent on FDI, but instead results from the dynamic interplay of several elements. Effects of technology spillover from the government-funded research institutions, as well as mutual competition and co-operation in technological emulation among domestic firms are important elements for the development of the domestic-led cluster. Moreover, all these elements lie within the strategic coupling of the regional assets and the transnational Chinese technical community, mediated by the state. It is the the state that has mobilised regional assets to negotiate with overseas technology talent for strengthening global linkages and facilitating the entrepreneurial knowledge absorption of domestic leading firms—a feature which has not been theoretically observed in Western countries.