Introduction

Traditionally, Chinese firms have often been considered as ‘low cost’ and ‘me-too’ players, lacking adequate innovative capability to create competitive advantage beyond their ability to produce low-cost products or low cost–low quality substitutes for those of their much more advanced Western peers. However, in recent years, contrary to this characterisation, more and more Chinese firms have begun to emerge as strong global contestants, and in some cases new leaders, in particular product lines and segments in the global market. One of the most publicised examples is Huawei Technologies, which specialises in designing and manufacturing telecoms equipment and routers. It has now surpassed all of the established telecoms equipment suppliers except Ericsson in global market share and profits, and in routers is now directly challenging the global market leadership of Cisco, long regarded as the flagship enterprise in the sector. In the personal computer (PC) business, meanwhile, Lenovo overtook Acer, Dell and HP in the third quarter of 2012 to become the world’s largest PC maker, as forecast by Lenovo group chairman Liu Chuanzhi.

Although the achievements of these companies are perhaps the most widely known, they are hardly alone. In fact, today there are quite a significant number of Chinese firms that have successfully established themselves among the global market leaders in a variety of industries. Already by the late 2000s, Zeng and Williamson (2007) identified a list of strong global players from China including: Wanxiang Group in automotive components and systems; Galanz, a leading maker of microwave ovens; and Shanghai Zhenhua Port Machinery, a top crane manufacturer; among others. Four years on, more and more firms from China are emerging as formidable challengers of their once much more advanced Western rivals. But not only are Chinese firms gaining share in the global market, they are also becoming more and more innovative. Haier, Lenovo, China Mobile, BYD and others, for example, were ranked among the top fifty most innovative companies by Business Week magazine last year.