Abstract
This study investigates the dynamic formation process of varieties of local developmental state models behind China's pursuit of emerging technological innovation at the global frontier. A local developmental state model is characterised by the development state's mobilisation and practice of the industrial policy pursuing economic and various development goals at the local level. The study is motivated by a simple puzzle, thus why do China's three most prominent innovation hubs, Beijing Zhongguancun High-Tech Park, Shanghai Zhangjiang High-Tech Park, and Shenzhen Nanshan High-Tech Park, choose different ways and focus on different technological innovations in the local development of artificial intelligence (AI) and Blockchain industries.This study proposes a new framework for understanding the varieties of local developmental state models by articulating the local state's distinctive industrial policy practice in building the local technological innovation industrial ecosystem. The study focuses on three aspects of the high-tech park's efforts to mobilise and practice industrial policies to foster local AI and Blockchain technological innovation clustering. The first one is the objective setting of industrial policy; the second one is the mechanism of the policymaking process; and the third one is the method of policy implementation. The high-tech park's different policy objective choices, policymaking mechanism, and policy implementation method provide an opportunity to articulate the local developmental state model's dynamic formation and evolution process in the context of China's technological innovation.
The main proposition is that the local developmental state needs to balance a series of political and economic factors to form and implement different industrial policies to achieve diverse development goals. In the meantime, the different local development goals are based on a combined calculation of the local state's and central state's interests. Furthermore, this calculation-based development mechanism has shaped the dynamic mobilisation and formation process of the local developmental state's industrial policy. Then different local developmental state models will be observed and formed.
The varieties of local developmental state models could be identified and categorised based on three aspects: 1). the prioritised development goals in the policy objective setting, in terms of the economic and political interests at both the local and central state levels; 2). the dynamic power-sharing method in the policymaking process and this aspect regards the dynamic power distribution, the centralisation or decentralisation of the power that the local state delegates to the participants in the process of decision-making; 3). and the level of dependency or autonomy that the local developmental state could exert in the policy implementation, and this point concerns intimately to the local state's reliance on the central or the local state's financial sponsorship, as well as the intervention from the central state's disciplinary inspection and political regulation that the local state faces and experiences.
The study proposes three local developmental state models. The framework and theory explore case studies of the three local developmental state models from the lens of three high-tech parks' industrial policy practice in the distinctive local development of AI and Blockchain techno industries and industrial innovation.
The first model is the bureaucratic local developmental state model by Zhongguancun High-Tech Park in Beijing. The political interests of the central state are prioritised in the setting of the local state's policy objective. Moreover, a highly centralised policymaking method is deployed by the local state under the central state's centralised policy order and political power influence.
Meanwhile, a high level of dependency could be observed in the policy implementation by the local state, and the local state is dependent on the central state's financial sponsorship and under constant disciplinary inspection and heavy political regulation.
In the empirical studies, Zhongguancun chooses the Digital Governance industry as the way to develop AI and Blockchain technologies, political interests in political stability and national security are prioritised by Zhongguancun under the order of the central state, and policymaking power is centralised by the participants trusted by the central state, the high-tech park's administration committee. Meanwhile, the policy implementation of Zhongguancun relies on the financial sponsorship of the central state's sovereign fund. It must endure constant party disciplinary inspection directly from the central state. The second mode is the hybrid local developmental state model that Zhangjiang High-Tech Park in Shanghai represents. A combination of political and economic interests of both the central and the local state are prioritised in the setting of policy objectives. And a method mixing centralisation with decentralisation is deployed in the policymaking by the local state under the power delegation by the central state. Meanwhile, a mixture of dependency and autonomy is reflected in the local state's policy implementation under a dynamic trade and negotiation with the central state.
In the empirical studies, Zhangjiang chooses the Digital Currency industry as the path to progress in AI and Blockchain technologies, a combination of the central state's political interests (political stability and national security) and the local state's economic interests (economic growth and profit generation) are highlighted by Zhangjiang. Regarding the political interests of the central state, the Zhangjiang high-tech park's administration committee, as the delegate of the central state, uses centralised control in the policymaking process. When it comes to the economic interests of the local state, Zhangjiang's administration committee shares power with the managing group of the high-tech park in the policymaking process.
However, when a combination of political and economic interests co-exists, cooperation and competition would coincide regarding power-sharing and distribution in the policymaking process.
Meanwhile, the policy implementation of Zhangjiang relies on the financial sponsorship of both the central state's sovereign fund and the local state's industrial innovation fund. Moreover, the central-level party disciplinary inspection team will come to Zhangjiang when the policy implementation concerns the core political interests of the central state, and when it comes to the common economic interests pursued by the local state, Zhangjiang and Shanghai's local-level party disciplinary inspection team will take charge of the policy implementation.
The third model is the entrepreneurial local developmental state model represented by Nanshan High-Tech Park in Shenzhen. The economic interests of the local state are prioritised in the setting of the local state's policy objective. The local state conducts a highly decentralised policymaking method under the authorisation and empowerment of the central state. Meanwhile, a high level of autonomy could be characterised by the policy implementation by the local state. And the local state relies on its financial resources and does not receive constant interruption from the heavy disciplinary inspection and political regulation by the central state.
In the empirical studies, Nanshan chooses the Internet of Things (IoT) related intelligent manufacturing industry as the channel to foster AI and Blockchain technologies, economic interests in economic growth, profit generation, market efficiency, innovation capability, market competition and open innovation are prioritised by Nanshan. A decentralisation and inclusive participation method could be noticed in Nanshan's policymaking process. It aims to bring more participants and stakeholders with diverse backgrounds into the collective efforts incubating an entrepreneurship-friendly, market-confronting, innovation-inclusive, and technology-encouraging ecosystem.
Meanwhile, the policy implementation of Nanshan relies on its profound financial resources coming from both the local state and the open domestic market in Shenzhen and China. The local Nanshan and Shenzhen party disciplinary inspection team take charge of Nanshan's daily development rather than the central state's inspection team. Furthermore, the local inspection team usually shows up to implement significant economic or technological innovation projects related to core political interests, especially national security.
While at the same time, it is also the time when Beijing sends down the central inspection team to Nanshan; for example, the central state's inspection team will come to Nanshan and order the local Nanshan and Shenzhen's team to investigate the policy implementation of the IoT intelligent manufacturing related to semiconductor chips, when face with the stringent tech sanctions and blockade against China by the U.S. As well as when the development of Nanshan and Shenzhen's Blockchain-based cryptocurrency industry threatened financial, social, and political stability.
The study also sheds light on China's Blockchain start-up clustering in Zhongguancun, Zhangjiang, and Nanshan to examine the formation and future evolution of the local developmental state model from a perspective of entrepreneurial development. The analysis discusses a growing trend in China's technological innovation ecosystem pursuing political stability and national security through achieving breakthroughs in emerging technologies and cutting-edge innovation. Moreover, the research also analyses whether China's local developmental state model, in the context of technological innovation, will increasingly tend to converge with a model pursuing political stability and national security.
This study contributes to discussing the developmental state and developmental state models. By articulating the dynamic formation process of the local developmental state models in the context of China's emerging technological innovation, the study offers an alternative view and new exploration to understand the varieties of local developmental state models through the lens of the local state's industrial policy practice. This study speaks with the developmental state's transformation towards tech innovation industrialisation, an open global market and an international environment, as they are essential in the contemporary developmental state context.
Meanwhile, the study also engages with the debate on the diffusion and transferability of the local developmental state model.
| Date of Award | 1 Mar 2024 |
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| Original language | English |
| Awarding Institution |
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| Supervisor | Xin Sun (Supervisor) & Robyn Klingler-Vidra (Supervisor) |