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Introduction
Manufacturing is one of China’s most important pillar industries, which is regarded as the base of the national economy. China’s manufacturing has made significant progress in the past decades. In 2014, only the gross value of China’s equipment manufacturing output exceeded over Yuan 20tn, which accounted for more than 33 per cent of all the global industrial output. China has already become one of the world’s leading manufacturers in terms of its productive capabilities.
Through decades of development, China’s manufacturers have fostered their technological capabilities, moving from merely using or imitating technology to deeper levels of technological engagement that enable them to undertake different types of innovative activities (Bell and Figueiredo, 2012). China’s manufacturers as latecomers became capable of engaging in the R&D activities hosted by forerunners, and increasingly more R&D cooperation between them emerged in China, in which advanced knowledge was shared, transferred and created. Through cooperating with forerunners, latecomers find ways to acquire forerunners’ knowledge and foster technological capability via indulging in a high frequency of interaction (Fan, 2006; Okamuro et al., 2011; Wang et al., 2014), exploring their own path of technological development (Lee and Lim, 2001) and increasing their chances to catch up. However, there remains a considerable knowledge gap between China’s manufacturers and forerunners abroad (Jin et al., 2014). To protect their superiority, forerunners tend to avoid cooperation in key R&D activities, and the core knowledge of forerunners, which is extremely important to a firm and deeply linked with firms’ core competence (Prahalad and Hamel, 1990), could be barely transferred directly to the latecomers. Instead, forerunners are willing to cooperate with latecomers in those R&D activities which are not important to them because of either market or financial reasons. R&D cooperation has become the most usual way to receive external knowledge through spillovers (Audretsch and Lehmann, 2006), providing China’s manufacturers some opportunities of learning from the forerunners. By cooperating with the forerunners, China’s manufacturers can access complementary knowledge resources (Bogers, 2011; Sampson, 2004), absorb knowledge (Mazloomi Khamseh and Jolly, 2008), and finally create new knowledge (de Faria et al., 2010; Un et al., 2010). Thus, this could be an important way for China’s manufacturers to improve their technological capabilities and achieve successful catching up....