This paper begins with a brief history of the evolution of China's science and technology system, and its information technology sector in particular to highlight the widespread institutional changes underway in the transition from a planned to a more market oriented economy. It then focuses on the development of the Chinese software industry, i.e. the market, labour force, sources of capital, ownership and management, and its regional distribution. The analysis highlights the persistent role of non-market factors, the government and guanxi, alongside the ongoing reforms oriented toward introducing market mechanisms into the economy. The conclusion focuses on the effects on the software industry of China's entry into the WTO and on the emerging trends in an economy where the pace of change is unparalleled.
DRC Working Papers, Foreign Direct Investment in Emerging Markets, Centre for New and Emerging Markets, London Business School, No. 19, London, UK, 59 pp.