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The Disintegration of Production

Firm Strategy and Industrial Development in China Edited by Mariko Watanabe, Faculty of Economics, Gakushuin University, Tokyo, Japan
In the past two decades, China has experienced rapid industrial and economic growth. This fascinating book explores the unique Chinese business strategy of vigorous market entry and low prices, which has been the key feature of this accelerated industrial growth.
In Association with the Institute of Developing Economies, JETRO
Extent: 360 pp
Hardback Price: $147.00 Web: $132.30
Publication Date: 2015
ISBN: 978 1 78347 641 1
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  • Asian Studies
  • Asian Development
  • Asian Economics
  • Development Studies
  • Asian Development
  • Development Economics
  • Development Studies
  • Economics and Finance
  • Asian Economics
  • Development Economics
  • Industrial Organisation
  • Institutional Economics
In the past two decades, China has experienced rapid industrial and economic growth. This fascinating book explores the unique Chinese business strategy of vigorous market entry and low prices, which has been the key feature of this accelerated industrial growth.

Using a rich accumulation of research, the authors lay out a simple microeconomics framework to explain how Chinese industries have developed, aided by vertically disintegrated value chains and utilization of technology and transaction platforms. Case studies of specific industries – including electronics, automobiles, coal and energy, agriculture, finance, and pharmaceuticals – contribute to the comprehensive and timely analysis.

This book will appeal to scholars and students of industrial development, industrial organization, and development economics, as well as Chinese and Asian studies.
‘It is a conventional belief that the Chinese industrial economy is dominated by large state-owned enterprises closely connected with political power. While this perception is correct for some industries, such as petroleum refinery, this fascinating book, edited by Mariko Watanabe, presents us with a vivid picture of another side of the economy, where smaller enterprises specializing in separate modular products compete with each other on the basis of a common platform, contributing to its dynamism. The book combines fresh theories and hypotheses, derived from intimate field work, with empirical testing. This is certainly an eye-opening work for everyone interested in the future of the Chinese economy.’
– Masahiko Aoki, Stanford University, US

‘In short, The Disintegration of Production is important reading for all who are interested in understanding the rise of China as a manufacturing power. While questions remain as lo whether and how Chinese firms will make the transition into higher value-added activities, the cogent theoretical framework and rich empirical detail of the book provide an important contribution to the debate.’
– The Developing Economics
Contributors: Y. Asuyama, K. Ding, H. Hoken, N. Horii, K. Kimura, T. Marukawa, M. Ohara, J. Pan, M. Watanabe, M. Yamaguchi
Contents:

Introduction: The “Vigorous Entry and Low Price” Phenomenon – How Chinese Industries have Developed
Mariko Watanabe

1. An Analytical Framework for the Vigorous Entry and Low Price Phenomenon
Mariko Watanabe

PART I: Vigorous Entry

2. The ‘Make or Buy’ Decision and Supply-chain Governance
Tomoo Marukawa

3. TV and Air Conditioning: Product Innovation under Vertical Disintegration
Mariko Watanabe

4. The Shanzhai Cell Phone: Platforms and Small Business Dynamics
Ke Ding and Jiutang Pan

5. The Wind Turbine Industry: The Role of Policy and Markets in the Catch-up Process
Nobuhiro Horii

6. The Specialized Market System: The Market Exploration of Small Businesses
Ke Ding

PART II: Environment

7. Stratified Domestic Demand: The “Seed-bed Effect” on Automobile Firms Observed from County-level Sales Data
Moriki Ohara

8. Technology: Foreign Technology Introduction and Market Entry
Koichiro Kimura

PART III: Low Prices

9. Grains: Marketing Systems and Agricultural Technologies for Low Prices
Hisatoshi Hoken

10. Labor: From Fixed Cost to Variable Cost
Yoko Asuyama and Mami Yamaguchi

11. Energy: Price Reforms and the End of Low Energy Prices
Nobuhiro Horii

Index