ABSTRACT
The astounding growth and increasing competitiveness of Chinese industry, especially in the last ten years, are no longer a surprising development. With China’s displacement of the United States as Japan’s top trading partner in 2004, more scholars, business people, and policy-makers are calling attention to understanding the trajectory and consequences of China’s booming economy (Zaun 2005: C8). While analysts have long recognized the difficulties of market-oriented transition, others have noted that China’s transformation into the world’s workshop is inevitable, in part because of its inexpensive yet productive labor force. Yet this factor alone does not and cannot explain China’s industrial success.
