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China's Race to the Top: Regional and Global Implications of China's Industrial Policy

Published online by Cambridge University Press:  11 February 2021

Seung-Youn Oh
Seung-Youn Oh*
Affiliation:
Bryn Mawr College, Bryn Mawr, USA
*
Email: seungyoun.oh@gmail.com
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Abstract

The paper examines the global and regional implications of China's revitalized state capitalism model through the sectoral lens of the Chinese automotive industry, which stands at the intersection of both traditional and green industrial policy. At the multinational level, China skillfully facilitates local policy implementation that creates excess capacity by propping up local and national champions through convenient compliance with the WTO. At the bilateral level, China closely links purchasing and coercive diplomacy with protections for Chinese players both at home and abroad. Key endeavors like the Belt and Road Initiative open up overseas markets to develop global champions and secure foreign footholds for Chinese champions. Additionally, China's increasing reliance on exclusionary diplomacy provides political justifications to discriminate against foreign competitors within the Chinese market while moving forward with industrial upgrading of domestic players. When linked together, these factors – all byproducts of China's approach to state-led capitalism – combine to explain China's efforts to create a race to the top.

Keywords

Chinaindustrial policyeconomic statecraftstate capitalismBelt and Road Initiativeindustrial upgradingnew energy vehicles
Type
Original Article
Information
World Trade Review , Volume 20 , Special Issue 2: Economic Statecraft and Global Trade in the 21st Century , May 2021 , pp. 169 - 185
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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