Industrial Policies and the Changing Patterns of Investment in the Chinese Economy
Forthcoming in The China Journal
55 Pages Posted: 14 Aug 2018
Date Written: July 27, 2018
Investment has always played an important role in the economic development strategies of the People’s Republic of China. A major reform of the investment system in 2004 shifted the state’s focus from direct investment control to industrial policies designed to promote investment in specific economic sectors. But in reality, the industrial policies’ preferences have had little effect. The data suggest that investment patterns in China are largely divorced from the industrial policies, and, if anything, predate them. The significant shifts in investment across sectors and ownership forms that have taken place since the early 2000s appear driven far more by profitability considerations and private entrepreneurship than by government policies. The finding negates foreign concerns that the Chinese state via industrial policies such as “Made in China 2025” is creating national state-owned technological leaders.
Keywords: People’s Republic of China, Investment Rate, Investment Policy, National Investment Strategy, Sector Distribution of Investment, Ownership Distribution of Investment, Causes of Investment, Economic Growth
JEL Classification: E22, E6, L52, O11, O25, O53
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