Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-78c5997874-8bhkd Total loading time: 0 Render date: 2024-11-18T20:24:03.014Z Has data issue: false hasContentIssue false

6 - The Search for High Power in China: State Grid Corporation of China

Published online by Cambridge University Press:  08 June 2019

By
XU Yi-chong
Edited by
Loren Brandt  and
Thomas G. Rawski
Loren Brandt
Affiliation:
University of Toronto
Thomas G. Rawski
Affiliation:
University of Pittsburgh
Get access

Summary

There are long-held assumptions that Chinese firms, especially state-owned enterprises (SOEs), cannot innovate because distorted incentive structures discourage them from taking risks. This paper disputes this assumption. It explains why and how the State Grid Corporation of China (SGCC) engaged in technology innovation that propelled this state-owned giant into the top rank of global leaders in the development of ultra-high-voltage electrical transmission systems. Government policies of SOE reform and technology innovation provided incentive structures within which SOEs operated; yet the outcomes could vary greatly. This paper explains how SGCC’s entrepreneurial managers formulated an ambitious innovation strategy, convinced government leaders to include advanced UHV technology in plans for indigenous innovation, and then implemented a risk-laden approach deploying an open-innovation strategy – project-driven, inclusive, and collaborative. SGCC worked with a range of players: universities, research institutions, suppliers and multinational corporation (MNCs), all on SGCC’s terms. Successful R&D produced designs and equipment that enabled SGCC to build and operate long-distance transmission lines that achieved unprecedented scale and efficient energy utilisation. SGCC’s technical accomplishments reshaped the rules of the game in research with universities and the relationship with electric equipment manufacturers.

Keywords

State Grid Corporation of Chinastate-owned enterpriseinnovationUHV electricity transmissionentrepreneurial managementresearch coordinationelectrical equipment
Type
Chapter
Information
Policy, Regulation and Innovation in China's Electricity and Telecom Industries , pp. 221 - 261
Publisher: Cambridge University Press
Print publication year: 2019

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abrami, Regina M., Kirby, William C., and Warren McFarlan, F.. 2014. “Why Can’t China Innovate.” Harvard Business Review. 92(3). pp. 107–11.Google Scholar
Bai, Tianliang and Ke, Wang. 2015. “Moving Forwards toward a Country with Brand Names.” People’s Daily, 16 July, p. 2 (白天亮, 王珂, 贴牌大国迈向品牌大国, 人民日报, 2015年7月16日, 02版。)Google Scholar
Berkhout, Frans. 2002. “Technological Regimes: path dependency and the environment.” Global Environmental Change. 12(1). pp. 1–4.Google Scholar
Berg., S. V. and Tschirhart, J.. 1988. Natural Monopoly Regulation. New York: Cambridge University Press.Google Scholar
Berkhout, Frans, Verbong, Geert, Wieczorek, Anna J., and Raven, Rob, Lebel, Louis, and Bai, Xuemei. 2010. “Sustainability Experiments in Asia: innovation shaping alternative development pathways?” Environmental Science & Policy. 13(4). pp. 261–71.CrossRefGoogle Scholar
Boutellier, Roman, Gassman, Oliver, and von Zedtwits, Maximilian. 1999. Managing Global Innovation. Berlin: Springer.Google Scholar
Breznitz, Dan and Murphree, Michael. 2011. Run of the Red Queen. New Haven: Yale University Press.Google Scholar
CCTV-2. 2013. 财经. 《大国重器》2013–11-06 – 2013–11-11, at http://tv.cntv.cn/videoset/VSET100177333141/.Google Scholar
Chen, Jia. 2009. “Overview of China’s Enterprise Innovation.” In Fan, Q.. Li, K.. Zeng, D.Z.. Dong, Y., and Peng, R. eds., Innovation for Development and the Role of Government. Washington, DC: The World Bank.Google Scholar
Chesbrough, Henry. 2003. Open Innovation. Cambridge, MA: Harvard Business School Press.Google Scholar
Cheung, Tai Ming, Mahnken, Thomas, Seligsohn, Deborah, Pollpeter, Kevin, Anderson, Eric, and Yang, Fan. 2016. “Planning for Innovation.” a report prepared for the US–China Economic and Security Review Commission. July 28, 2016.Google Scholar
Chu, Steven. 2010. “Is the Energy Race Our New “Sputnik” Movement?” Washington, DC: National Press Club.Google Scholar
Cobb., R. W. and Elder., C. D. 1972. Participation in American Politics. Baltimore: John Hopkins University Press.Google Scholar
Crooke, Paul Irwin. 2012. “China’s New Development Model: analysing Chinese prospects in technology innovation.” China Information. 26(2). pp. 167–84.Google Scholar
Doremus, Paul N. et al., eds. 1998. The Myth of the Global Corporation. Princeton: Princeton University Press.Google Scholar
Eaton, Sarah. 2013. “Political Economy of the Advancing State.” The China Journal. 69. pp. 64–86.Google Scholar
Executive Office of the President, National Science and Technology Council. “A Policy Framework for the 21st Century Grid: a progress report.” February, 2013.Google Scholar
Fan, Qimiao, Li, Kouqing, Zeng, Douglas Zhihua, Dong, Yang, and Peng, Runzhong, eds. 2009. Innovation for Development and the Role of Government. Washington, DC: World Bank.Google Scholar
Fan, Peipei. 2014. “Innovation in China.” Journal of Economic Surveys. 28(4). pp. 725–45.Google Scholar
Feng, Yongsheng. 2016. “China’s New Round of Electricity Institution Reform.” paper delivered at International Workshop on “Challenges Facing the Electricity Industry,” February 21–3, 2016. Hong Kong.Google Scholar
Fu, Xiaolan. 2015. China’s Path to Innovation. Cambridge: Cambridge University Press.Google Scholar
Gallagher, Kelly Sims. 2014. The Globalisation of Clean Energy Technology. Cambridge, MA: MIT Press.CrossRefGoogle Scholar
Gu, Qingsheng (古清生) and Quanhui, Huang (黄传会). 2009. 走进特高压：特高压工程记 [On the road to UHV – Ultra-high voltage project diary]. 北 京：中国电力出版社. 2009. p. 96.Google Scholar
Guo, Kai. 2011. “Chinese Electric Equipment Industry.” Economic Observer. 23 July (郭开, 中电装备身世, 经济观察报, 2011–07-23).Google Scholar
Haas, Peter M. 1992. “Introduction: Epistemic Communities and International Policy Coordination.” International Organisation. 46(1). pp. 1–35.Google Scholar
Hagstrom, Peter and Chandler, Alfred D., Jr. 1998. “Perspective on Firm Dynamics.” In Chandler, Alfred D., Jr., Hagstrom, Peter, and Solvell, Orjan eds., The Dynamic Firm. New York: Oxford University Press.Google Scholar
Hammond, Daniel R. 2013. “Policy Entrepreneurship in China’s response to Urban Policy.” Policy Studies Journal. 41(1). pp. 119–46.Google Scholar
Hart, David M. 2007. “Corporate Technological Capabilities and the State.” In Lipartito, Kenneth and Sicilia, David B. eds., Constructing Corporate America: History, Politics, Culture. New York: Oxford University Press.Google Scholar
Huang, Daochun, Shu, Yinbiao, Ruan, Jiangjun, and Hu, Yi. 2009. “Ultra High Voltage Transmission in China: Developments, Current Status and Future Prospects.” Proceedings of the IEEE, 2009, 97(3). pp. 555–83.Google Scholar
IEA. 2006. China’s Power Sector Reforms. Paris: OECD.Google Scholar
IEA. 2015. World Energy Outlook 2015. Paris: OECD.Google Scholar
IEA. 2016a. Large-Scale Electricity Interconnection. Paris: OECD.Google Scholar
IEA. 2016b. World Energy Investment. Paris: OECD.Google Scholar
Jorde, Thomas M. and Teece, David J.. 1990. “Innovation and Cooperation.” Journal of Economic Perspectives. 4(3). pp. 75–96.Google Scholar
Joskow, Paul L. 1997. “Restructuring, Competition and Regulatory Reform in the US Electricity Sector.” Journal of Economic Perspectives. 11(3). pp. 119–28.Google Scholar
Kennedy, Andrew B. 2013. “China’s Search for Renewable Energy: Pragmatic Techno-Nationalism.” Asian Survey. 53(5). pp. 909–30.Google Scholar
Kingdon, John W. 1995. Agendas, Alternatives and Public Policies. 2nd edn. New York: Harper Collin College Publishers.Google Scholar
Kim, Linsu. 1997. From Imitation to Innovation. Boston, MA: Harvard Business Review Press.Google Scholar
Lester, Richard. 2014. “Energy Innovation.” In Locke, Richard M. and Wellhausen, Rachel L. eds., Production in the Innovation Economy. Cambridge, MA: The MIT Press. pp.109–38.Google Scholar
Lewis, Joanna. 2013. Green Innovation in China. New York: Columbia University Press.Google Scholar
Li, Rongrong. 2004. “Press Conferences held by the Press Office of the State Council.” November 30, 2004.Google Scholar
Li, Cheng, ed. 2008. China’s Changing Political Landscape. Washington, DC: Brookings Institution Press.Google Scholar
Lin, Li-Wen and Milhaupt, Curtis J.. 2013. “We Are the (National) Champions.” Stanford Law Review. 65(4). pp. 697–760.Google Scholar
Lings, Raymond. 2005. “Overview of Transmission Lines Above 700kv.” Inaugural IEEE PES 2005 Conference and Exposition in Africa. Durban, South Africa, July 11–15, 2005. pp. 33–43.Google Scholar
Liu, Feng-chao, Simon, Denis Fred, Sun, Yu-tao, and Cao, Cong. 2011. “China’s Innovation Policies: evolution, institutional structure, and trajectory.” Research Policy. 40(7). pp. 917–31.Google Scholar
Liu, Xielin and Peng, Cheng. 2014. “National Strategy of Indigenous Innovations and its Implication to China.” Asian Journal of Innovation and Policy. 3(1). pp. 117–39.Google Scholar
Liu, Zhenya. 2015. Global Energy Interconnection. New York: Academic Press-Elsevier.Google Scholar
Lu, Fei 鲁菲. 2010. 李荣融与央企七年：卸任前存一大遗憾 [Li Rongrong and SOEs for Seven Years]. 新华网 [Xinhua News Agency]. September, 2, 2010.Google Scholar
Lu, Zheng 路郑. 2015. 输配电设备企业成特高压建设最大受益者 [The Electrical Equipment Industry as the Largest Beneficiary of UHV Projects]. 中国能源报 [China Energy Report]. February 9, 2015.Google Scholar
McNally, Christopher A. 2013. “Refurbishing State Capitalism.” Journal of Current Chinese Affairs. 4. pp. 45–71.Google Scholar
Mertha, Andrew. 2009. “‘Fragmented Authoritarianism 2.0’: Political Pluralisation in the Chinese Policy Process.” China Quarterly.Google Scholar
MIT. 2009. The Future of the Electric Grids. Cambridge, MA: MIT.Google Scholar
Naughton, Barry. 2011. “China’s Economic Policy Today.” Eurasian Geography and Economics. 52(3). pp. 313–29.Google Scholar
Naughton, Barry.. 2015. “The Transformation of the State Sector.” In Naughton, Barry and Tsai, Kellee S. eds., State Capitalism, Institutional Adaptation, and the Chinese Miracle. New York: Cambridge University Press.CrossRefGoogle Scholar
Naughton, Barry and Segal, Adam. 2003. “China in Search of a Workable Model.” In Keller, William W. and Samuels, Richard J. eds., Crisis and Innovation in Asian Technology. New York: Cambridge University Press. pp. 160–86.Google Scholar
Naughton, Barry and Tsai, Kellee S., eds. 2015. State Capitalism, Institutional Adaptation, and the Chinese Miracle. New York: Cambridge University Press.Google Scholar
Nelson, Richard R. 1991. “Why do Firms Differ, and How Does it Matter?” Strategic Management Journal. 12. pp. 61–74.Google Scholar
Ni, Wen 倪旻. 2014. 特高压让我们站在全球设备研发最前端 [UHV Leads R&D in Equipment Manufacturing]. 国家电网 [State Grid]. No.12. pp. 84–9.Google Scholar
Nolan, Peter. 2012. Is China Buying the World? Cambridge: Polity.Google Scholar
Nolan, Peter and Xiaoqiang, Wang. 1998. “Harbin Power Equipment Company and the Battle for the Chinese Market.” Competition and Change. 3(4). pp. 417–48.Google Scholar
OECD, 2005. Oslo Manual: Guidelines for Collecting and Interpreting Innovation Data. 3rd edn. Paris: OECD.Google Scholar
OECD. 2009. “Power Sector Reform.” Review of Regulatory Reform: China 2009, Paris: OECD. pp. 229–66.Google Scholar
OECD. 2015. Energy Technology Perspectives 2015. Paris: OECD.Google Scholar
Opposition. 2011. 专家们对特高压的反对声音 [Opposition of Experts against UHV Projects]. 财新网 . April 25, 2011. Caixin.Google Scholar
Patel, Pari. 1995. “Localised Production of Technology for Global Markets.” Cambridge Journal of Economics. 19(1). pp. 141–53.Google Scholar
Paulson Institute. 2015. “Power Play: China’s Ultra-High Voltage Technology and Global Standards.” Chicago: Paulson Institute. April, 2015.Google Scholar
Jr. Scherer, Harold N. and Vassell, Gregory S.. 1985. “Transmission of Electric Power at Ultra-High Voltages.” Proceedings of the IEEE. 73(8). pp. 1252–78.Google Scholar
SGCC. 2006. State Grid Corporation Corporate Responsibility Report. Annual.Google Scholar
SGCC Acquisitions. 2014. 国家电网公司重组整合许继、平高集团纪实 [The History of SGCC’s Acquisitions and Restructuring of Xuji and Pinggao]. 国家电网报 [State Grid News]. September 9, 2014.Google Scholar
Shim, Yongwoon and Shin, Dong-Hee. 2015. “Neo-techno Nationalism.” Telecommunications Policy. 40(2–3). pp. 197–209.Google Scholar
Siemens. 2015. “China’s Innovation Pipeline.” Siemens Newsletter Innovation. March 12, 2015.Google Scholar
Song, Jian. 2008. “Awakening: evolution of China’s science and technology policies.” Technology in Society. 30. pp. 235–41.Google Scholar
State Council. 2006. “Accelerating the Revitalisation of Equipment Manufacturing Industries.” (国务院关于加快振兴装备制造业的若干意见, 2006).Google Scholar
Steinfeld, Edward S. and Beltoft, Troels. 2014. “Innovation Lessons from China.” MIT Sloan Management Review. 55(4). pp. 49–55.Google Scholar
Thun, Eric and Brandt, Loren. 2010. “The Fight for the Middle: Upgrading, Competition, and Industrial Development in China.” World Development. 38 (11). pp. 1555–74.Google Scholar
Tse, Vivian. 2005. “ABB Aims to Make China its Largest Market by 2009.” Dow Jones International News. April 28, 2005.Google Scholar
Vernon, Raymond. 1966. “International Investment and International Trade in Product Cycle.” Quarterly Journal of Economics. 80(2). pp. 190–207.Google Scholar
Wang, Jing 王菁. 2015. 特高压工程释放3000亿投资点燃输配电设备市场 [Expansion of the Electrical Equipment Industry as the Result of 300 Billion Investment in UHV Projects]. 中电新闻网 [China Power News Network]. February 5, 2015.Google Scholar
Wang, Weimin 王为民. 2014.给世界树立一个榜样 [Set an Example for the World]. 国家电网 [State Grid], No.12, pp. 110–17).Google Scholar
Wessner, Charles W., ed. 2011. Building the 21st Century: U.S.-China Cooperation on Science, Technology, and Innovation. Washington, DC: National Academies Press.Google Scholar
Wildavsky, Aaron. 1979. Speaking Truth to Power. Boston: Little Brown.Google Scholar
Williamson, Oliver E. 1991. “Strategizing, Economizing, and Economic Organization.” Strategic Management Journal. 12(S2). pp. 75–94.Google Scholar
Williamson, Peter J. and Raman, Anand P.. 2011. “How China Reset Its Global Acquisition Agenda.” Harvard Business Review. 89(4). pp. 109–14.Google Scholar
Yang, Dali L., ed. 2012. The Global Recession and China’s Political Economy. New York: Palgrave Macmillan.Google Scholar
Yeh, Emily T. and Lewis, Joanna I.. 2004. “State Power and the Logic of Reform in China’s Electricity Sector.” Pacific Affairs. 77(3). pp. 437–65.Google Scholar
Yip, George S. and Bruce, McKern. 2016. China’s Next Strategic Advantage. Cambridge, MA: The MIT Press.Google Scholar
Yusuf, Shahid; Wang, Shuilin, and Nabeshima, Kaoru. 2009. “China’s Fiscal Policies for Innovation.” In Fan, Qimiao, Li, Kouqing, Zeng, Douglas Zhihua, Dong, Yang, and Peng, Runzhong eds., Innovation for Development and the Role of Government. Washington, DC: World Bank. pp. 149–80.Google Scholar
Zeng, Ming and Williamson, Peter J.. 2007. Dragons at Your Door. Cambridge, MA: Harvard Business School Press.Google Scholar
Zhang, Zirui 张子瑞. 2010. 该谁来整合输变电设备业 [Whose Responsibility to Restructure and Reorganise the Electric Equipment Industry]. 《 中国能源报 》 [China Energy Report]. February 1, 2010. p. 24.Google Scholar
Zhao, Yining. 2013. “Interview of Chen Weijiang on UHV Projects.” 21st Century Economic Herald. June 4, 2013 (赵忆宁, “特高压技术研发科学家陈维江详解为什么只有中国取得了成功.” 《21世纪经济报道》2013年06月04日).Google Scholar
Zhou, Yu, Lazonick, William, and Yifei, Su, eds. 2016. China as an Innovation Nation. New York: Oxford University Press.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×