An old article from the Economist on high-tech industry in China says

Why has China been so slow to climb the technology ladder? History is one explanation. Under communism, most technological development was state-directed and a disaster. State-owned enterprises still grapple with legacies of poor management and a lack of sophisticated systems. Most private companies are too small yet to pour much money into innovation.

...perhaps the biggest constraint, ironically, is also China's strength: its massive pool of low-cost labour. Arthur Kroeber, managing editor of China Economic Quarterly, argues that China has no real incentive to develop high-tech processes since, unlike Japan and South Korea, which were forced to grab markets from the West by sophisticated engineering and continuous process improvement, "China can compete for the next 50 years on labour costs."

Yeah, some say that the reason China didn't have an industrial revolution was that same massive pool of low-cost labor: no reason to have mechanization when it was cheaper to use human elbow grease.