Question

Why and how has the Chinese government promoted corporate entrepreneurship in the cellular technology sectors?

Answer 1

Why it allowed..

1) After the 2000, Chinese economy started opening up, they even allowed foreign direct investment in various sectors

2) Most of the industries in China has either Oligopoly or Monopoly, after a certain level they became saturated, so they needed to expand into new geographies for growth and face the competition of MNCs. Most of the western Countries invest a lot in R&D, so Chinese Government in order to support the companies create a Innovation system, they started investing in R&D and opened multiple advanced labs (How).

3) Everyone knew Internet of things is the next big thing, and smartphones forms a integral part of it.

4) China has already access to cheap labor and electronic manufacturing, so it can easily compete in pricing, all it needed was push in design and innovation.

So to compete and continue its growth and realizing the potential of smartphones it allowed.

How it helped..

1) It allowed foreign investment, so that they can easily raise investment.

2) It established many advanced labs like BMI to help the companies.

3) Many incubation centres were opened.

4) Easy loan and capital for the start-ups.

5) Easy licensing and support in legalities.

It just provided then open environment to compete, as result now Xiaomi demands most of the market share and Gionee is on verge of bankruptcy,