The case of Chinese mobile phone industry
MNEs and technology transfer in economic development Program name: International business management
Recently, the number of multinational enterprises has experienced prosperity in Chinese smartphone markets. As the most profitable sub-sector of the telecommunications industry, mobile phones have become an indispensable tool for modern communication in China. Compared with 2006, in the year of 2007 domestic sales of cell phone experienced a rapid increase by 74%, which is 190 million. No mater the traditional customers’ demand and new mobile phone users, they both make a great contribution in Chinese phone industry. Mobile subscribers in China are now using 330 million smartphones, which is a 150% increase over last year. The thriving and prosperous of Chinese mobile phone industry could not ignore the entry of foreign direct investment. It means that, with the development of increasing economy and policy, the advantages from Chinese market attracts a large number of foreign direct investments to explore the smartphone industry. Importantly, this emerging industry pushes the technology development of domestic market in China. The aim of this following report is to bring increasing attention on importance of Chinese Technological Development from Chinese mobile phone industry under the push of multinational companies. Following this introduction, through combining specific features and current situations from Chinese market, it will present a brief set of sound reasons to explain strengths and challenges in this market. Even though it has to been confronted with these difficulties, it has been claim that multinational companies make a great contribution in technology development in Chinese smartphone industry. Characteristics of Chinese
Even though the technology is globalized rapidly, the expansion of R&D internalization by the firm cannot be ignored in developing countries (Shin-Homg, C., 2003). As China has been seem the word’s largest smartphone market, there are a few elements and features of this country could explain the booming situation in this field, such as rapid economy growth, freedom trade environment, low level of technology capability, fierce competition and large market share. Firstly, in terms of the economy growth, the stably growth of nominal GDP in China is the health fundamental of the fast development of foreign investment. By the year of 2013, according to the International Monetary Fund (IMF) statistics, the nominal GDP in this state reached to almost to US $8.227 trillion. Due to the strong Chinese economy, the foreign smartphone multinational companies push the huge power to focus on potential this market. Therefore, the increasing attention has been paid on technology development of domestic mobile phone industry. Secondly, the proactive free trade government policy is another one of the reasons to attractive the foreign multinational enterprises to invest in Chinese mobile phone industry. Since 19, China has joint into World Trade Organization as well as responsible for the aim of this organization that lowering of barriers to cross-border trade and investment (Hill, 2012). Base on the statement of Bill Clinton and George W. Bush, the free trade made Chinese market become open. Under the trend of growing economy, there are loads of opportunities for multinational mobile phone companies to stimulate the technology innovative activities. In other word, the Chinese government has made a great effort in stimulating the technology development in this industry. In addition, the low level of technology development in domestic supplier and manufacturing from smartphone industry is one of the barriers that lead to...