Industrial Policies Under Xi Jinping: A Steering Theory Perspective

Abstract

Xi Jinping’s ascension to power and subsequent developments in Chinese governance have stoked the flames on the debate on industrial policies, both in China and across the globe. At least partly, the debate results from the perception that industrial policies have been important for China’s economic rise, growing competitiveness and drive to innovate. Outside China, this perception has already prompted some governments to suggest that their countries should react to China’s rise by also promulgating industrial policies. But inspite of the growing interest in the topic, there is hardly a consensus on the character of China’s industrial policies nor their efficiency and effectiveness, neither inside nor outside of China. This paper will shed light on these issues by looking at Chinese industrial policies from the perspective of political steering theory. It will first review the political steering theory, identify key concepts (steering modes, steering objects and subjects, etc.) and then explain the rationale of applying the theoretical deliberations to industrial policymaking and implementation in China’s EV and solar sectors. Against this background, this paper will identify different types of industrial policies and look into Chinese industrial policy development and academic discussion over time with a specific focus on changes in industrial policy steering following the inauguration of the Xi Jinping administration. This paper aims to make a conceptual contribution based on the analysis of policy documents and academic texts as well as discussions and interviews with Chinese economists and political scientists. It is part of a larger research project that focuses on how political steering through industrial policies affects China’s energy transition under Xi.