18 April 2024
WP341 | Institutional Challenges for China’s Chip Industry
Abstract
Why have Japan, South Korea and Taiwan developed advanced capabilities in designing and fabricating semiconductor chips while China has not, even though it is a larger and more powerful state? A common explanation offered is that China’s efforts to develop its chip industry have been hindered by its strategic rivalry with the United States, which controls essential intellectual property and technology. However, this explanation is insufficient, and the apparent failure of China’s indigenous innovation policies merits a closer look. I argue that the institutional set-up – in particular, the extent of state versus private sector involvement – explains the variation observed in East Asian states’ pursuit of chip industry development. Building on previous work done by Douglas Fuller, I show that China’s state-dominated institutional set-up has led it to over-allocate resources to “paper tigers”, an approach that has hindered the advancement of its domestic chip industry. My argument is grounded in the seminal concept of “fragmented authoritarianism”, developed by Kenneth Lieberthal and Michel Oksenberg, and stands in contrast to recent analyses of China’s economic policymaking process which demonstrate how the country’s state-dominated institutional set-up has played an important role in achieving rapid growth that has defied expectations of an authoritarian political system.
About the Author
Manoj Harjani is a Research Fellow and Coordinator in the Military Transformations Programme (MTP) within the Institute of Defence and Strategic Studies (IDSS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU). Prior to joining MTP, Manoj was part of the Future Issues and Technology research cluster at RSIS, where he worked on building up the school’s research agenda and networks at the intersection of science, technology, and national security. Manoj began his career in the Singapore Public Service, with stints at the Ministry of Trade and Industry and Centre for Strategic Futures, where he held roles focusing on analysing long-term trends and building up public sector capabilities in futures thinking and scenario planning. He was also part of a team at the Public Service Division under the Prime Minister’s Office which led an initiative to build the public sector workforce’s digital capabilities. Manoj holds a Bachelor of Arts in Political Science from the National University of Singapore.
Abstract
Why have Japan, South Korea and Taiwan developed advanced capabilities in designing and fabricating semiconductor chips while China has not, even though it is a larger and more powerful state? A common explanation offered is that China’s efforts to develop its chip industry have been hindered by its strategic rivalry with the United States, which controls essential intellectual property and technology. However, this explanation is insufficient, and the apparent failure of China’s indigenous innovation policies merits a closer look. I argue that the institutional set-up – in particular, the extent of state versus private sector involvement – explains the variation observed in East Asian states’ pursuit of chip industry development. Building on previous work done by Douglas Fuller, I show that China’s state-dominated institutional set-up has led it to over-allocate resources to “paper tigers”, an approach that has hindered the advancement of its domestic chip industry. My argument is grounded in the seminal concept of “fragmented authoritarianism”, developed by Kenneth Lieberthal and Michel Oksenberg, and stands in contrast to recent analyses of China’s economic policymaking process which demonstrate how the country’s state-dominated institutional set-up has played an important role in achieving rapid growth that has defied expectations of an authoritarian political system.
About the Author
Manoj Harjani is a Research Fellow and Coordinator in the Military Transformations Programme (MTP) within the Institute of Defence and Strategic Studies (IDSS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU). Prior to joining MTP, Manoj was part of the Future Issues and Technology research cluster at RSIS, where he worked on building up the school’s research agenda and networks at the intersection of science, technology, and national security. Manoj began his career in the Singapore Public Service, with stints at the Ministry of Trade and Industry and Centre for Strategic Futures, where he held roles focusing on analysing long-term trends and building up public sector capabilities in futures thinking and scenario planning. He was also part of a team at the Public Service Division under the Prime Minister’s Office which led an initiative to build the public sector workforce’s digital capabilities. Manoj holds a Bachelor of Arts in Political Science from the National University of Singapore.
