Synchronizing Export Orientation with Import Substitution: Creating Competitive Indigenous High-Tech Companies in China

SummaryThis paper examines how the synergy between China’s domestic and the international market has affected its most competitive indigenous companies. Through case study in China’s ICT sectors in the 1990s, the paper shows that when export upgrades and domestic market growth intersect in timing and sectors, that is, when they synchronize, Chinese companies found conditions most favorable to compete with foreign companies within the domestic market. The synchronization has significant impact on sectors for both mature products and technologically advanced products. It is thus necessary to reexamine the role of import-substitution practices under the new context of globalization and in conjunction with exports.