| China's high tech industry is central both to that nation's development trajectory and to the China-Taiwan economic and technological relationship. This dissertation challenges the traditional wisdom regarding the vertical division of labor across the Taiwan Strait in the high-tech industry. Existing literature regarding the cross-strait division of labor is based on at least three flawed assumptions. First, that Taiwan, which has more production expertise and design experience, has the technological lead and therefore reaps higher profit margins, and that China, a late latecomer, is inevitably lower on the global supply chain. This model assumes that Taiwan controls key components and thus occupies an advantageous position in the vertical hierarchy and enjoys higher profit margins.; Second, it has been suggested that Taiwan should treat the Chinese market as a beachhead and maneuver brand-creating operations to obtain higher margins in the global market. Taiwanese scholars as well as officials almost unanimously expect such an attempt to reap great rewards. Third, scholars tend to analyze the cross-strait division by testing the relationships between Taiwanese parent companies and their branches in China, while ignoring Chinese companies. They often argue that parent companies in Taiwan are still controlling key components and major functions (for example, finance and research). This misses important interactions between Taiwanese enterprises and their Chinese counterparts. Strangely enough, this methodological inadequacy remains unexplored in Taiwanese academia.; In this thesis, I aim to demystify these three arguments and provide a more realistic perspective on the cross-strait division of labor in the high-tech industry. In terms of functional vertical division, that is, production-R&D-marketing, cross-strait industrial activities tell quite a different story. In the mainland market, it is Chinese local enterprises that dominate most marketing and distributive channels and enjoy higher margins. In contrast, Taiwanese companies design and produce commodities for their Chinese buyers and achieve lower margins. In other words, Chinese local firms stand higher in the hierarchy of functional vertical division of labor and enjoy better returns. This contradicts the view of most Taiwanese scholars and officials.; This research offers new critical perspectives with respect to three influential theories: those regarding a new division of labor, the statist approach, and global commodity chains. (Abstract shortened by UMI.)... |
