Telecommunications and telecommunications equipment was identified as a strategically important ‘pillar’ industry in the Chinese 10th and 11th five year plans. The economic reforms had successfully transformed the Chinese telecommunications industry from being an impediment to economic development in the early 1980s to become its most vibrant sector by the mid-90s. Since 1986, China’s five-year plans have emphasised the importance of high technology R&D and innovation (Ure, 2007). Chinese government policy required China to open up its market to foreign players and to build up indigenous technological capability by nurturing domestic players (Shen, 1999).