China as a Center for innovation? Implications for knowledge transfer and culture shifts

This chapter explores trends in knowledge flows to and from China-based subsidiaries and their multinational corporations (MNCs), and the culture shifts emerging in knowledge creation and diffusion in China. Using qualitative data from the information technology industry, our findings suggest that in addition to acquiring knowledge from the developed countries, China is becoming increasingly innovative and developing capabilities to create and share knowledge of its own making. Consequently, China-based subsidiaries, and ultimately Chinese firms, could emerge as valuable contributors to innovation and knowledge creation. During the process, however, they may absorb the cultural values of MNC home countries, thereby potentially creating value changes in aspects of Chinese culture.