Foreign and Indigenous Innovation in China: Some Evidence from Shanghai

This paper examines the contribution of multinational R&D activity in China within an evolving policy environment which increasingly emphasizes indigenous innovation and the reduction of dependence on foreign sources of technology. This drive to ensure the development of Chinese-owned technology in the medium term is an understandable attempt by China to move up the value chain from being a major low-cost manufacturing node within global production networks and develop a more sustainable economic model. On the basis of considerable field investigations of multinational R&D centres in Shanghai, consideration is given to both the contribution of this activity to innovation and the implications for it arising from indigenous innovation policy. Will there be unintended consequences arising from a policy which uses market access and public procurement to capture elements of global R&D activity within China's territory?