Innovative Firms and High-tech Industrial Hubs in China

China’s spectacular economic transformation over the last four decades builds on the development and accumulation of a broad array of productive capabilities across industrial sectors. The depth and breadth of Chinese capabilities is a result of the growth of innovative firms and specialization of high-tech industrial hubs in which firms are embedded. This chapter discusses how the interaction between innovative firms and high-tech hubs shapes the development of specific configurations of capabilities locally, and how complementary capabilities from regions across China allow the country as a whole to excel in innovation. This theoretical argument is illustrated through case studies of co-evolution between firms and regions in China’s three prominent innovation centres in the information and communications technology (ICT) industry: Beijing, Shanghai, and Shenzhen.