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Created: Sep 17, 2007
Updated: Nov 19, 2009
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Return to Files & Photos for group China's ChoicesPolicies for Industrial Learning in China and Mexico
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About
Abstractexport-led market reforms over the past quarter century have been strikingly
different. In contrast to China, Mexico has not managed to increase the value
added of its exports of manufactured goods and has subsequently had a difficult
time competing with China in world markets. Building on this previous work,
in this paper we conduct a comparative analysis of the role of government
policies in industrial learning and the development of capabilities of indigenous
firms in Mexico and China in order to shed light on why China is
outperforming Mexico. We find that Mexico and China have had starkly
different approaches to economic reform in this area. Mexico’s approach to
reform has been followed a “neo-liberal” path, whereas China’s approach
could be described as “neo-developmental.” Mexico’s hands-off approach
to learning has resulted in a lack of development of endogenous capacity of
domestic firms, little transfer of technology, negligible progress in the
upgrading of industrial production, and little increase in value added of exports.
By contrast, China has deployed a hands-on approach of targeting and
nurturing domestic firms through a gradual and trial and error led set of
government policies.
different. In contrast to China, Mexico has not managed to increase the value
added of its exports of manufactured goods and has subsequently had a difficult
time competing with China in world markets. Building on this previous work,
in this paper we conduct a comparative analysis of the role of government
policies in industrial learning and the development of capabilities of indigenous
firms in Mexico and China in order to shed light on why China is
outperforming Mexico. We find that Mexico and China have had starkly
different approaches to economic reform in this area. Mexico’s approach to
reform has been followed a “neo-liberal” path, whereas China’s approach
could be described as “neo-developmental.” Mexico’s hands-off approach
to learning has resulted in a lack of development of endogenous capacity of
domestic firms, little transfer of technology, negligible progress in the
upgrading of industrial production, and little increase in value added of exports.
By contrast, China has deployed a hands-on approach of targeting and
nurturing domestic firms through a gradual and trial and error led set of
government policies.
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