A comparative study of the innovation models of Japanese , Korean and Taiwan firms indicates that Korea adopts technology leapfrogging strategy while China's Taiwan applies technology value chain promotion strategy . But both of them depend mostly on overseas markets . However , Japan , in principle , depends on special demand of domestic markets and therefore it subverts the monopoly of European and American firms with the aid of disruptive innovation . On the basis of some new innovation theory and economic development theory , the present paper explores the path of indigenous innovation for Chinese firms from the perspective of international environment and characteristics of the domestic market . The study argues that China should establish a model of indigenous innovation with disruptive innovation as a dominant approach , together with a subsidiary approach of technology leapfrogging . This paper also argues that China should place emphasis on the new creative thinking based on a profound understanding of both Chinese customers'demands and the traditional Chinese cultural value .