China Has To &Nbsp; Industry Is The Industry.

The digitalization and mobility of the information age make the flat panel display everywhere.

Flat panel display, represented by TFT-LCD (Thin film pistor-Liquid crystal display, thin film pistor liquid crystal display, commonly known as LCD panel), has become an important electronic device as important as semiconductor chips, and is widely used in all kinds of products from mobile phones to televisions.

China is lagging behind in LCD panel display. When large scale LCD monitors completely replace traditional CRT, China, as the world's largest producer of TV and computers, and the main market of LCD TV, is mainly dependent on imports to meet the needs of liquid crystal display.

If we can not develop LCD panel display industry, China's huge electronic information industry can only maintain the low value-added structure.

Since 2003, a number of Chinese enterprises have entered the LCD panel display industry and built the 5 generation line.

Because the products of the 5 generation of the next generation line can not meet the needs of the TV screen, the domestic parties have been hoping to introduce more than 6 generations of "high generation" production lines.

However, until the summer of 2009, foreign enterprises had blocked technology and refused to pfer the high generation production line to China.

By the end of 2009, there was a sudden change in the situation. Foreign enterprises changed their attitude overnight and scrambled to set up factories in China.

There is a "liquid crystal fever" in China, and all over the world are competing for the LCD panel production line.

According to media reports, the planned production line of over 7.5 production lines was once 8, and the total investment estimate was over 200 billion yuan.

However, at present, the total number of 7.5 generation production lines running by the whole world is less than 12.

As a result, China's strategic and policy issues in developing LCD panel display industry seem to be falling from the sky, pressing and prominently placed in front of the Chinese people.

Up to now, there is no clear long-term strategy for developing LCD panel display industry in China, and there is no consensus among the whole country.

This is because China is underdeveloped in this field, and domestic industry, government and society are not very familiar with the nature and characteristics of LCD panel display industry.

Fortunately, the central government launched the "electronic information industry revitalization plan" in early 2009, which has listed flat-panel displays as the support point. The top level has already realized that "breaking through the bottleneck of the development of new display industry".

However, how China develops this strategic emerging industry is not clear in its overall strategic thinking.

What is even more frightening is that the popular thinking spread by the media is still the traditional viewpoint of importing production lines.

Obviously misleading!

This situation can't worry about whether China can seize the opportunity to display the development of the LCD industry.

Therefore, to discuss and clarify the development strategy and policy principles of Chinese liquid crystal display industry is not only related to the development of a strategic new industry, but also to the urgent need for the development of China's high-tech industry as a whole.

After 18 months of research, the research group showed that the direct cause of the "liquid crystal heat" triggered by the late summer of 2009 was the expansion of Chinese competitive enterprises which entered the LCD panel display industry.

Therefore, the key to the study of "liquid crystal heat" lies not in how to control the number of investment projects, but in the future of China's high technology high investment and high risk "three high industries": how to support the expansion of China's competitive enterprises to grasp the historic opportunity for China's industrial upgrading.

Creative destruction of color TV industry

For the strategy of LCD panel display industry, China's industry decision-makers and the public are alert to a crisis.

Because 5 years ago, the Chinese color TV industry, which once dominated the world, encountered a crisis of technology substitution.

From the beginning of 1980s to the middle of 1990s, China has established a complete industrial chain of "assembly machine - color tube glass shell" through the introduction of technology in the field of CRT (picture tube) television.

On this basis, the Chinese color TV industry, which has realized the market competition system earlier, has developed economies of scale with the advantages of cheap labor force and huge domestic market, won the domestic market by price advantage, and entered the international market, once ranked first in the world in terms of output and export volume.

The development history of China's color TV industry has been widely regarded as a successful example of "importing technology to develop industry", and it seems to confirm the correctness of the theory of comparative advantage.

However, the "vulnerability" of this "correctness" lies in an impossible condition: technology no longer changes.

After just a few years in twenty-first Century, China's color TV industry encountered a crisis of "creative destruction": the technology substitution of flat panel display based on LCD panel to CRT (picture tube).

LCD panel display color TV has been exposed in the domestic market since 2003. By 2008, it has decisively exceeded the CRT color TV set in sales volume.

In the past 5 years, the speed of its substitution has made Chinese industrial policymakers unprepared. (see chart 1)

What is more serious is that the replacement of LCD (CRT) by LCD panel displays has made China's color TV industry again fall into a high dependence on foreign core components: China has spent more than 20 years to generate 95% of the value chain of color TV industry in China. However, as the CRT (picture tube) is replaced by LCD panel display, the value chain of China's color TV industry is pferred to 80% abroad again.

Technology substitution to subvert Chinese color TV

This technology substitution has made China's color TV industry lose its advantage in the past 20 years.

Its logo is two: first, China's color TV enterprises are again constrained by foreign suppliers of LCD panels, so they are greatly reduced profits.

The two is the foreign brand color TV which has been depressed by the Chinese enterprises in the era of CRT (picture tube), and then expands the Chinese market share by virtue of the core technology advantage (see Figure 2).

It is worth considering that when the replacement of LCD (CRT) is already "the storm is coming," the decision-makers of Chinese industry generally make a wrong judgement, at least underestimate the speed of substitution.

When foreign companies have disposed of the production equipment of CRT TV, some Chinese enterprises regard it as a great opportunity for "international industrial pfer". They crazily buy production lines to expand their production capacity, resulting in unexpected consequences.

At the end of 2003, the largest glass shell factory in Henan, the anchoi Group invested nearly $50 million to buy all the remaining 9 glass shell production lines of Corelle, which has not yet been installed.

In 2004, TCL Group acquired Thomson's CRT (picture tube) color TV business, resulting in several years of losses.

In September 2004, China's largest color management enterprise Rainbow Group invested more than 600 million yuan to introduce Hitachi technology and launched the super large screen CPT project.

The unsuccessful project is the heavy burden of money caused by the turning point of prosperity and decline.

Around 2003, Hua Fei, a joint venture between Nanjing and PHILPS, bought 9 old lines of Taiwan PHILPS.

But demand fell sharply, and the whole project was completely abandoned.

The storm of liquid crystal flat panel display instead of CRT (CRT) rapidly destroys the color kinescope industry in China.

China's eight major color kinescope factories are Xianyang rainbow, Beijing Panasonic (joint venture), Shenzhen SEG Samsung (joint venture), Shenzhen SEG Hitachi (joint venture), Foshan Thomson (joint venture), Changsha LG (joint venture), Nanjing Hua Fei (joint venture), Shanghai Yongxin (joint venture), under the impact of flat panel display, to the end of 2007.

In July 19, 2007, Shenzhen SEG Hitachi announced a total shutdown.

In December 2007, Shanghai Yongxin closed down.

In January 2010, most of Hua Fei's factories quit CPT production and seek investment cooperation.

In October 2009, Panasonic ceased production in Beijing.

In October 2008, the dawn of LG in Hunan was completely shut down.

In the fourth quarter of 2006, Xianyang rainbow, China's oldest and largest color kinescope company, once again suffered losses.

Face

In a short span of three or four years, a huge industry has been destroyed.

What is more tragic is the behavior of joint ventures in the process of technology substitution: foreign capital first pfers its original CPT production capacity to its joint venture in China, which makes many Chinese people have the illusion of "international industrial pfer". Then, when the CRT (picture tube) market shrinks and withdraws, it has never made any efforts in the new display technology, leaving behind abandoned factories and laid-off workers.

Chinese executives in Shenzhen SEG Samsung realized in 2003 that the CRT market would be replaced, and they hoped to introduce TFT glass substrate technology from Samsung, Corelle, which was jointly owned by ROK, but was rejected.

Samsung later chose to set up a separate company when building LCD modules in mainland China, but did not cooperate with SEG Samsung.

However, when Samsung shut down the CRT (kinescope) factory in Singapore, it contracted all the Samsung's global CRT (picture tube) business to Samsung in Shenzhen.

Only Panasonic, a more famous company with a sense of social responsibility, adopted a respectable way: after Panasonic color control was stopped, Panasonic proposed to set up a monument with the BOE at its original site, telling the two sides to have a joint venture here.

In China's eight major color kinescope factories, the only effort can be made in the field of new display.

Tragedies of "three stages" logic

Technological change is a normal state and is a constant change in the development of modern industry.

The rise and fall of individual enterprises due to technological changes is also common. However, in the process of liquid crystal flat panel display instead of CRT, the entire Chinese color TV industry, including the core component industry, has no capacity to deal with it.

Such a scale industry has suffered such a heavy blow in such a short period of time. It can be called "tragic death".

This scene

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After 30 years of practice, the "three stage" logic has formed the "three paradigm" phenomenon.

1) Chinese enterprises become the dependents of foreign technology supply enterprises, typically the car industry.

The Chinese car industry has embarked on the joint venture Road since the mid 1980s, and has made "homemade" production through the joint venture "imported" models designed by foreign enterprises.

However, although the policy goal is to develop independently, there is always an insurmountable gap between assembling foreign models and developing independently.

Only in the last ten years, with the opening of the market and the emergence of independent development enterprises outside the "system", the possibility of China's car industry to embark on the road of independent development has emerged.

2) Chinese enterprises have become the main role of "one time and one place" - typically the color TV industry.

Unlike the sedan industry, the color TV industry has formed a competitive structure earlier, resulting in the growth of Chinese enterprises that can make use of cost advantages and market scale advantages through innovation in production and management.

In addition to Hisense, today's leading enterprises in the industry Changhong, Konka, SKYWORTH, TCL, Haier and so on are not the designated enterprises of the so-called color TV set in 1980s.

Although the industry has not been completely free from dependence on foreign countries in core technology, Chinese enterprises producing end products still won the main market share after the mid 1990s.

However, as the fact that the color TV industry is facing an alternative crisis, even if the industries that Chinese enterprises have been able to occupy the main role, once they encounter major technological changes, they will still be in trouble and even return to their original point.

3) Chinese enterprises have chosen another way to make "unexpected results" because of the "alternative", which is relatively rare in the China Telecom equipment industry.

The China Telecom industry is in a very backward state at the beginning of reform and opening up. The competent departments also follow the "three stage" logic, which has experienced large-scale import of foreign program-controlled switches, joint venture production and imitation development.

When the industry still lurched along the "three way" road, the Zhengzhou Telecom Engineering Institute outside the industry developed the first 10000 program-controlled switchboard in China in the early 1990s, the 04 machine, and began to enter the market in large numbers in 1994.

The 04 machine is not the result of "technology import", but the "spillover" of technology capability of computer R & D project to communication technology.

The breakthrough of the 04 aircraft is of epoch-making significance.

It directly led to the rise of "huge China" (dragon, Datang, ZTE, HUAWEI) and broke the "three stage" path.

The practice of China's industrial development has fully demonstrated a major theme: the three stage logic of leading the Chinese industrial technology policy thinking for 30 years is wrong.

First of all, the "three stage" logic completely ignores the key role of independent research and development in learning foreign technology.

The "three stage" logic regards the introduction of foreign advanced technology as the sole source of technology, does not actively advocate and encourage independent development, and thinks that it can automatically master "technology" through purchase and use.

But 30 years of practice have proved that no industry in China can go from the stage of "introducing foreign advanced technology to localization" to the stage of "independent development".

The ability of independent development can only be generated and grown in the practice of independent development, and it is impossible to get in the process of using foreign technology.

Secondly, the "three stage" logic completely ignores the possibility and normality of technological change.

This policy thinking implies a premise: foreign technology must be advanced, while China's technology must lag behind.

Therefore, the whole content of "three stage" logic is to introduce existing foreign technology as a way to develop industry, and to achieve the goal of localization of these technologies as a policy goal, but never leave room for technological change and how to deal with technological change.

This kind of thinking excludes the choice of China's industry through technological innovation, and regards price and cost competition as the only means - static "comparative advantage".

However, as bear Pete's famous assertion said, "in the capitalist reality, it is not the textbook competition (i.e. price competition) that plays a role. It comes from the competition of new commodities, new technologies, new sources of supply, and new organizations (i.e., innovative competition).

This competition is more effective than another competition, just like the artillery bombarding and the free hand pushing door. "

Therefore, the experience of technology substitution crisis in China's color TV industry is nothing but the absurdity of the "three stage" logic from another perspective.

The logic of "three stages" is linear thinking. The key is to regard technology as an object that can move freely among different subjects. Ignoring technological ability can only come from the learning process, thus eliminating the key role of independent product and process development in mastering technology and promoting technological progress. Instead, the illusion of fate can only be followed because of the prospect of the growth of one's abilities.

Three extremely popular illusions

Historical lessons must be learned, because this is crucial for China's technological progress and industrial upgrading strategy.

It must be pointed out that the technology substitution crisis faced by China's color TV industry has made the general consensus of the importance of developing LCD panel display industry.

However, the major strategy to decide the future of China's LCD technology industry is not solved.

Up to now, on the issue of how to develop LCD panel display industry, the "three stage" logic has been extended through the media amplification and widely popular view.

A popular view is that China hopes to develop liquid crystal display industry in foreign countries to pfer production lines, and even foreign enterprises set up factories in China.

This view is not essentially different from the idea of developing the sedan and color TV industry through the introduction of technology that year, so it still can not explain what is the mechanism of changing from buying production lines into active participation in technological progress.

There is a "radical" view that looks opposite to the popular view: because overseas enterprises can not pfer the most advanced technology to China, so the introduction of any production line will necessarily mean backwardness.

The absurdity of this "cynical" view lies in the hope that China can suddenly emerge from the world's leading technology in "nothing". Without pointing out that the source of LCD panel technology can only come from abroad, what is the realistic way for China to develop this industry?

There is also a view that seems to be "leapfrog": as the LCD panel display industry has matured, China has missed or surpassed the hope that China should step over the TFT-LCD stage to develop updated display technologies, such as LED or OLED.

In fact, this view completely ignores the industrial foundation of technological progress, neglects the lack of TFT-LCD industry foundation, and can not be successful in updating display technology.

The idea is to start from zero, learn to go, and learn to jump from zero to two.

The above three points of view are attributed to the fact that technology is equated to physical equipment or products, and therefore lack of "ability", "learning" and "knowledge accumulation" in thinking, which are decisive factors for technological progress.

In the face of liquid crystal display industry, the industry with rapid technological progress, if it adopts a straight line thinking in its development, will lead to confusion in thinking.

The confusion is widespread in media coverage and commentary.

How can China develop LCD panel display industry? How can the government avoid repeating the logic of "three stage" logic and promote the development of high-tech industries? More specifically and more pressing is the question of how the government can grasp the major opportunities that China faces in the development of LCD panel display industry. We must thoroughly understand the three themes and use this as a platform for formulating development strategies.

From the backward to become a competitor

The first theme: as a lagging behind of LCD panel display industry, Chinese enterprises must start from learning and assimilation of the existing technologies of foreign enterprises. However, if Chinese enterprises want to succeed in this industry, they must grow from the backward ones who accept foreign technology to the competitors who shape the track of technological progress, and decide that the key to this pformation is to create technological capabilities on the basis of learning and promote the continuous growth of capability with aggressive investment strategies.

The fact that China is a backward person means that Chinese enterprises entering the LCD panel display industry must start from the acceptance of foreign technology. The reason is not only the maturity of technology, but also the leading technology track and competition standard of the left and right market demand (such as price, performance, quality and so on).

However, if Chinese enterprises only stay in the state of followers and rely on foreign enterprises to pfer production lines to achieve technological upgrading, they will not be able to stand in this highly globalized industry.

Because in this industry, the market share and profit are controlled by the leader, the follower can only be marginalized, and may be eliminated at any time by technological and market changes.

As a result, Chinese enterprises entering the industry are faced with the edge of a sharp sword: they will eventually squeeze into the ranks of the leaders or be eliminated at the end, and there is no chance for Chinese enterprises to remain in the middle for a long time.

The only way to win is to learn foreign technology and form their own ability to participate in the process of technological change with the ability of continuous growth.

It is possible to pform from the backward to the leader. The development history of LCD panel display industry is enough to prove itself.

Because the key to developing this industry is mastering the ability to control technological progress, rather than having a generation of production lines.

The history of LCD panel display industry is obvious: in addition to Japanese enterprises as pioneers in industrialization, all successful backward players start with a lower generation line below the most advanced level of the time.

For example, when Samsung and LG entered the industry in 1995 when they built 2 generation lines respectively, Japanese enterprises had built 3 generation lines representing the most advanced technology level at that time. When the Taiwan enterprises entered the 3 and 3.5 generation lines in the late 1990s, SHARP and LG had already built 4 generation lines.

The essence of this industry rule is that the most important factor for the backward entry to enter the industry and start to grow is not the technological level of entry, but the mastery of technological capability.

Once the learning base is established by mastering the lower generation line technology, the speed of technological progress of an enterprise depends on whether it can consistently implement an aggressive investment strategy.

Under such conditions, the initial technological level of the backward entry into the LCD panel display industry is not the key factor determining the success or failure. The decisive factor is the technological capability and the growth speed of the technological capability determined by the investment strategy.

In the 2003, L G and Samsung, which had lagged behind in technology, took the lead in the construction of the 5 generation line in anti cyclical investment as a turning point.

Even the Taiwan enterprises, which initially relied on Japanese technology pfer, also exceeded the Japanese LCD industry in size because they adopted a more active investment strategy.

The experience of Chinese enterprises has also proved this point (see "BOE case" below).

When BOE entered the liquid crystal display industry through cross-border mergers and acquisitions in 2003, it did not enjoy the profits of the acquired Korean enterprises, but built up the 5 generation line in the country by using the acquired technology resources.

BOE takes the Beijing 5 generation line as the learning platform, and develops the capability foundation of advancing to the high generation line at present.

It is thought-provoking that BOE has been ridiculed for having only 5 generation lines that can not cut the LCD panel of TV.

The reason for the mocking invariably depends on whether the foreign enterprises can pfer the high generation line.

However, in the summer of 2009, when the Chinese media cheered the Nanjing project (the SHARP 6 generation line) was the first time that foreign enterprises pferred over 5 generation production lines to China, the 6 generation line of BOE has been in operation for several months.

When people set the key to building the LCD base of Pearl River Delta as the introduction of the 7.5 generation line, the 8 generation line of BOE has already been launched.

This fact proves that once the BOE enters the lower generation line, once it has mastered the technological capability, it will advance the technological progress of China's LCD panel display industry at a much faster rate than relying on imports.

There is no "leapfrog development".

The second theme: the key to China's high-tech development lies in whether it can form the industrial foundation of technological progress.

The symbol of the "industrial base" is whether China can grow in this field and profit from the products and services offered to the competitive market.

Therefore, the opportunity for China to develop LCD panel display industry depends on whether there are competitive enterprises in the field.

Because of the continuity, accumulation and complementarity of technological progress, if a country wants to have scientific research activities in related fields without having an industrial foundation, it will not be able to acquire technological capabilities or maintain technological progress.

In recent years, Samsung has taken the lead in the speculation of LED TV in the Chinese market. It is actually a TFTLCD TV with LED as its backlight or LCD TV.

Even the most widely recognized new OLED monitor in the industry, 70% of its technology and equipment is the same as that of TFT-LCD.

Therefore, the LCD panel display industry is the foundation for the development of new flat panel display technology. Its technical capability is the knowledge and experience base for developing these updated displays.

Without the industrial foundation in the TFTLCD field, China can not catch up with the advanced level in the new flat panel display technology.

The importance of industrial foundation to technological progress can also be proved by the relationship between LCD panel display industry and semiconductor industry.

In fact, TFT (thin film pistor) in TFT-LCD is semiconductor product (IC), so the first half of the LCD panel manufacturing process is the manufacturing process of semiconductor.

From the point of view of industrial history, flat panel display technology is an integral part of the semiconductor revolution that has lasted for more than half a century. It is only because of the widespread application of semiconductor (integrated circuits and chips) that the need for "display everywhere" has been created, and thus the power of developing flat panel display technology has been generated.

The backwardness of mainland China in developing flat panel displays is directly related to the backwardness of the semiconductor industry.

The idea of developing new technology based on the industrial foundation of new technology is nothing less than wishful thinking.

In industrial technology, there has never been a "leap forward development" in the world.

The basic unit of "industrial base" is enterprise.

An industry is made up of an enterprise, and an enterprise is an economic organization that profits from providing products and services to the competitive market.

Thus, the symbol of a country's industrial base in a certain field is the existence of domestic enterprises with economic vitality in this field. Their collective capabilities constitute the industry capacity of the country in this field.

Enterprises that "make profits by providing products and services to competitive markets" are competitive enterprises.

An important proposition about China's industrial development is derived from this concept: Chinese enterprises that are technically dependent on foreign enterprises can not become competitive enterprises.

The economic vitality of competitive enterprises, that is competitiveness, comes from ability in the final analysis.

Ability is acquired through learning process.

For backward enterprises, from the low level of early stage to the state of being able to compete with the advanced ones, they need to experience intense technical learning, while supporting the learning process often does not meet short-term financial goals, so they need aggressive strategies.

The key to the growth of enterprises' capabilities in backward countries is the intensive learning of technology under the aggressive strategy.

The reason why Chinese enterprises that are technically dependent on foreign enterprises can not become competitive enterprises is because they are not independent in strategy, so their technological learning process is controlled. The practice of China's industrial development provides sufficient empirical evidence for this.

Take China's automobile industry as an example, enterprises that rely on joint ventures have never had the concept of their own products. What they can do is share a share with foreign capital.

Take China's color TV industry as an example.

China's color TV enterprises have more competitiveness and independence than automobile companies, but in a period of time, they fall into the price war that does not seek technology, making Chinese color TV enterprises still rely on foreign technology as a whole, which severely limits their strategic development space.

On the contrary, the China Telecom equipment industry takes the breakthrough of the 04 machine as an opportunity. Chinese enterprises with low early technological level have embarked on the road of independent development.

20 years later, the main enterprises in this industry, such as HUAWEI and ZTE, have become competitive enterprises in the global telecommunications equipment industry.

Whether theoretical logic or empirical evidence can answer whether China can rely on the "import" production line to develop the industry.

At present, when China adopts such a way in the construction of the high generation line, foreign enterprises usually hold shares.

Even without holding, foreign enterprises will strictly control technology.

This mode is based on the production of existing products to meet the immediate needs and profits of the market, and the development of new technology can only rely on overseas parent companies.

If this path is adopted, China will no longer have the market space for its competitive enterprises to grow.

China's development of LCD panel display industry can only rely on such Chinese Enterprises: although they have to start learning or introducing foreign technology, "Introduction" is only a necessary stage to achieve the strategy.

Such an enterprise has always been an enterprising strategy. It must take the lead as a strategic goal and make capacity as a means of growth.

In fact, the opportunity for China to develop LCD panel display industry is because such enterprises have already appeared.

China's competitive enterprises have decided the opportunity for China to develop LCD panel display industry, which has been proved by the "liquid crystal heat" in the late summer of 2009.

The condition for producing "liquid crystal heat" is that foreign manufacturers who insisted on not pferring technology for many years suddenly relaxed, and decided to set up factories in China, causing the upsurge of attracting investment from various governments.

The real reason for foreign manufacturers to relax is that a Chinese local company, BOE, has launched the 8.5 generation line.

This incident means that the unfavorable situation of China's lack of screen will be fundamentally reversed, so that foreign enterprises worried about losing their dominant position in the Chinese market will panic and set up factories in China.

This fact shows that the focus of the Chinese government's policy should be to support the growth of China's competitive enterprises.

Supporting China's competitive enterprises

The third theme is: for the development of high-tech industries with rapid technological and market changes, the government's policies can only be effective with competitive enterprises as the foothold. Therefore, the key to the development of LCD panel display industry is to support the growth of competitive enterprises in China.

As the central government has proved in a series of industrial revitalization plans during the 2008-2009 years of financial crisis, China's economic development is inseparable from the central government's policy on industrial development, and the primary policy objective of revitalizing the industry is to promote China's industrial upgrading and adopt policy measures to promote and help Chinese industries to evolve into high value-added industrial structures.

But we should also see that the experience of China's industrial development also proves that the projects directly operated by the government, especially those introduced under the "three stage logic", are often not effective.

The reason is that this kind of project often ignores that enterprises are the main body of technological learning, and only enterprises with production, marketing and service capabilities can realize the economic value of technological progress.

For industrial upgrading, the growth of technological capability is behind the change of product structure and industrial structure, and the growth of technological capability is based on competitive enterprises.

At present, China's chance to develop LCD panel display industry is due to the emergence of competitive enterprises in this field.

The direct driving force of "liquid crystal heat" is the expansion of Chinese competitive enterprises such as BOE.

For backward enterprises, access to high-tech industries is facing the forerunner advantages of foreign enterprises.

This advantage constitutes a barrier and increases the risk of the latter.

Therefore, in the presence of such barriers, the result of relying entirely on the free market mechanism is often that backward enterprises avoid these strategic emerging industries that are related to the national economy and the people's livelihood.

Therefore, for the Chinese government, the core of supporting the growth of competitive enterprises is to reduce the cost of technological learning by Chinese enterprises.

In terms of the obstacles to the development of LCD panel display industry in China, the main problem is not in terms of enterprises.

China has so far lacked the policy and institutional system to support Chinese enterprises to enter the hi-tech industry with such rapid technological progress and huge investment. These defects can only be resolved through government action.

China's experience in the development of LCD panel display industry reflects a major problem that China's economic pformation and industrial upgrading depend on national capacity building.

Change the rules of the game with faster progress.

At present, the domestic popular view on how to develop LCD panel display industry, because we do not understand the history of this industry, can only be big and full of paradoxes.

We must understand the trajectory of this industry before we can understand the nature and law of the industry.

TFT-LCD technology is not a sudden appearance, but after a long process of evolution, its industrial history can be divided into two stages: R & D stage and industrialization competition stage.

In the first stage, TFT-LCD technology was developed by American enterprises. However, because these big American enterprises only focus on too big application goals -- "hanging on the wall TV", and ignore the marginal application fields that can accept rough new technology, the new technology development process that has not been applied is unsustainable.

Instead, the Japanese companies that introduced the basic technology from the United States were brought to life by the TFT-LCD technology, which was once endangered, because they were applied to products such as electronic watches and calculators.

In the second stage, with the accumulation of technical knowledge of products and manufacturing in Japan, the LCD panel display industry has risen in Japan, but the notebook computer industry, the first killer user in the industry, has made its nature globalized from the beginning.

In the early stage of the industrialization of LCD panel display, Japanese enterprises once looked up to the world.

However, the South Korean enterprises (Samsung and LG) have changed the rules of the game with extraordinary aggressive investment strategies. They have thrown the Japanese enterprises behind the faster technological progress, and finally pushed the TFT-LCD technology to the television field which was once considered by Japanese companies to be remote.

Also relying on an aggressive investment strategy, Taiwan's enterprises that first entered Japan through the pfer of technology from Japan also surpassed Japanese enterprises.

This surging industrial history once again proves that for any innovator, the maturity of any new technology is long, and finding the application area is the key to the sustainability of the new technology development process.

For the backward industry, the vision and enterprising investment strategy for technological progress is the key to success.

BOE expansion affects industrial structure

Based on the current situation of LCD panel display industry in China, it is necessary to analyze a case of BOE in a Chinese competitive enterprise, because BOE largely determines the opportunities for China to develop LCD panel display industry.

It is the only Chinese enterprise capable of expanding with independent technological capacity, and its expansion has really affected the whole Chinese industry.

The importance of this case also lies in that it can help understand the strategic environment that Chinese enterprises encounter in the competition of LCD panel display industry, so as to provide direction for the government's focus.

It is particularly noteworthy that the decision and action of BOE in the LCD panel display industry was made before the awakening of the government and industry in China. The LCD course of the company reflects the ups and downs of the development of China's high-tech industry in the past 30 years.

Because of the special status of this enterprise, if we can understand why Beijing East can enter the LCD panel display industry and what bottlenecks it will encounter in the expansion process, we can understand the hope and obstacles of China's development of LCD panel display industry.

What is more profound and profound is that the process of LCD in BOE is a key to understand the development of China's high-tech industry.

From the perspective of the vertical development history and global competition of LCD panel display industry, we can clearly summarize its industrial laws: technological capability and investment strategy to promote technological capability growth, which is always the key factor determining the success or failure of competition.

Therefore, it is not difficult for us to draw a conclusion that China's industrial upgrading and pformation of growth mode require the positive role of the government. It is necessary to adopt technical policies conducive to independent learning and innovation and adopt industrial policies that support the growth of competitive enterprises in China.

This article is part of the Research Report of the national informatization expert advisory committee on the development trend and strategy of consumer electronics industry.

This magazine is part of the excerpt for readers' reading.