The Rules Have Changed A Case Study of Chinese Government Support of Local Technologies

The story of multinationals' response to government efforts to support TD-SCDMA offers important lessons for MNEs attempting to build a presence in China. The implication was that multinationals that did not support TDSCDMA would be shut out of China. The support of multinational firms played a critical role in the eventual acceptance of TD-SCDMA as an international standard. The development of TD-SCDMA provides important lessons for foreign firms attempting to build a presence in China. Specifically, it suggests that these firms must change their mindset and integrate into local innovation networks. To do so, multinationals must develop a deep understanding of the strategic intent and capabilities of the Chinese government, rethink their identities as multinational firms, and provide timely, strategic support both to government initiatives and to indigenous firms.