My book, *Paper Tigers, Hidden Dragons: Firms and the Political Economy of
China’s Technological Development*, has just been published in the US and
came out in the UK in late May by Oxford University Press.

Claim your 30% discount when you use the following code

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Here is a link to a review of the book in the July 9 issue of *The

 *Book Summary*:

China presents us with a conundrum. How has a developing country with a
spectacularly inefficient financial system, coupled with asset-destroying
state-owned firms, managed to create a number of vibrant high-tech firms?

China's domestic financial system fails most private firms by neglecting to
give them sufficient support to pursue technological upgrading, even while
smothering state-favored firms by providing them with too much support. Due
to their foreign financing, multinational corporations suffer from neither
insufficient funds nor soft budget constraints, but they are insufficiently
committed to China's development. Hybrid firms that combine ethnic Chinese
management and foreign financing are the hidden dragons driving China's
technological development. They avoid the maladies of China's domestic
financial system while remaining committed to enhancing China's domestic
technological capabilities.

In sad contrast, China's domestic firms are technological paper tigers.
State efforts to build local innovation clusters and create national
champions have not managed to transform these firms into drivers of
technological development.

These findings upend fundamental debates about China's political economy.
Rather than a choice between state capitalism and building domestic market
institutions, China has fostered state capitalism even while tolerating the
importing of foreign market institutions. While the book's findings suggest
that China's state and domestic market institutions are ineffective, the
hybrids promise an alternative way to avoid the middle-income trap. By
documenting how variation in China's institutional terrain impacts
technological development, the book also provides much needed nuance to
widespread yet mutually irreconcilable claims that China is either an
emerging innovation power or a technological backwater.

Looking beyond China, hybrid-led development has implications for new
alternative economic development models and new ways to conceptualize
contemporary capitalism that go beyond current domestic institution-centric

Douglas B. Fuller
Department of Business Administration
School of Management
Zhejiang University
Zijingang Campus
Room 801
Hangzhou, Zhejiang
Tel:(+86) 0571-88206856
Fax:(+86) 0571-88206856

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