260 IN THE SHADOW OF THE DRAGON Innovation and R&D Not all Chinese companies are as innovative as ZPMC. As pointed out in Chapter 4, the giant Chinese television manufacturer TCL relied on efficient management rather than its own R&D to turn around floundering companies with otherwise interesting prod- ucts. As long as the existing technology remained unchanged, TCL's formula worked. The lack of R&D, however, meant that TCL was taken by sur- prise when flat screen TVs suddenly entered the market. Without their own flatscreen technology, TCL was condemned to remain six months behind the market curve. In contrast, Huawei (dis- cussed in Chapter 3) invested heavily in R&D and managed to stay ahead of its competition. It was not surprised by market changes because it was in a sense helping to define the market thanks to its R&D. When some countries, notably the United States, balked at