Economics & Finance / Macroeconomics / Economic Development & Transition

China Hands Off to All In-The Rise of China's Industrial Policy 1978 to 2020 (Barry Naughton)

The Rise of China's Industrial Policy 1978 to 2020

Barry Naughton

The Rise of China's Industrial Policy 1978 to 2020 (Barry Naughton) This document, written by the prominent scholar Barry Naughton, provides an in-depth analysis of the evolution of China's industrial policy from 1978 to 2020.Based on an extensive historical review, the author argues that China’s early economic boom was driven primarily by market-oriented reforms rather than industrial intervention, and that a substantial modern industrial policy did not truly re-emerge until around 2006. Central to the full text is an examination of how China shifted from early “growth without policy” to a macro-institutional framework centered on the “Innovation-Driven Development Strategy”, with a focus on new policy tools such as government guidance funds. Naughton emphasizes that today’s China is engaged in an unprecedented, massive gamble in the global competition over general-purpose technologies (such as artificial intelligence and 5G) through large-scale fiscal investment and state direction.The ultimate effectiveness of this “government-guided market economy” and its underlying systemic risks remain to be tested by time.