The rise of strategic partner firms and reconfiguration of personal computer production networks in China: Insights from the emerging laptop cluster in Chongqing

In recent theorization of the Global Production Network (GPN) framework, viz. “GPN 2.0 theory” (Coe and Yeung, 2015), firm-specific strategies namely intra-firm coordination, inter-firm control, inter-firm partnership and extra-firm bargaining are conceptualized to understand the changing dynamics and reconfiguration of global production networks. Drawing upon the extra-firm strategies in the GPN 2.0 theory, this paper examines the spatial and organizational reconfiguration of personal computer production networks in China since late 2000s. Based on the information and data collected from years of observation and in-depth interviews with various firms and extra-firm actors, particularly government officials during June 2014 and December 2016, this study explores the emerging laptop cluster in Chongqing, a centrally-governed municipality in West China, which produced 40% of the world laptop computers in 2015. This paper argues that the rapid development in Chongqing in a short span has been attributed to the rising power of strategic partner firms of lead firms, primarily Taiwan-based contract manufacturers (e.g. Foxconn). It sheds light on the emerging strategic coupling between strategic partner firms and local government in Chongqing, which has brought about the reconfiguration of laptop production networks from the prevailed lead-firm centric to the emerging strategic partnership pattern. This study enriches the developing literature on the rise of strategic partner firms by extending the firm-centric analysis to extra-firm strategies, which echoes the extra-regional dynamics advocated recently by the Evolutionary Economic Geography (EEG) perspective.