Trade Friction and Chinese Innovation: A Case Study of the Semiconductor Industry

Trade Friction and Chinese Innovation: A Case Study of the Semiconductor Industry

Al-Sayed, Rafif and Yang Jianhua

University of Science & Technology Beijing (USTB), China


Major Chinese innovative technologies still depend on imported foreign core technologies. This dependence could affect sustaining growth in technological innovation for the Chinese Hi-Tech industry, which is one of the areas that has been most affected by the recent US-China trade conflict. The research explores if there is an impact of tension in trade scene on innovation in core technologies from the perspective of Hi-Tech industry experts in China. The method used a combination of semi-structured interviews and questionnaires addressed to experts and managers in the Chinese Hi-Tech industry. The statistical analysis used regression analysis of the experts’ answers where the findings propose a possible positive impact on endogenous innovation in the long term if it is combined with government policies that enhance innovation and increase R&D expenditures. The paper also highlighted the challenges that affect innovation in this industry and stresses the importance of the role of the entrepreneurial state that helped China to achieve breakthroughs in other domains. A case study of the semiconductor industry was analysed as a far-reaching endeavor, taking into account the scale of the challenges and the way forward for this significant core technology on which all of China’s Hi-Tech industries and exports depend.

Keywords: Global Trade Friction, Chinese Innovation, Endogenous Innovation, Chinese semiconductor industry, Made in China 2025.

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How to cite this article:
Al-Sayed Rafif and Yang Jianhua. Trade Friction and Chinese Innovation: A Case Study of the Semiconductor Industry. Global journal of Economics and Business Administration, 2019, 4:28. DOI: 10.28933/gjeba-2019-10-1505


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