How did China move so swiftly in capital-intensive industries without labor-cost or scale advantage from bit player to the largest manufacturer and exporter in the world? This book argues that subsidies contributed significantly to China's success. Industrial subsidies in key Chinese manufacturing industries may exceed thirty percent of industrial output. Economic theories have mostly portrayed subsidies as distortive, inefficiently reallocating resources according to non-market criteria. However, China's state-capitalist regime uses subsidies to promote the governments' and the Communist Party of China's interests. Rather than aberrations, subsidies help Chinese businesses and governments produce, stabilize and create common understandings of markets; the flows of capital reflect struggles between critical Chinese actors including central and provincial governments. Concepts of state capitalism including market-transition theory, the multi-organizational Chinese state, and state as paramount shareholder, create complex and relevant understandings of Chinese subsidies. The authors develop independent measures of industrial subsidies using publicly-reported data at firm and industry levels from governmental and private sources. Subsidies include free to low-cost loans, subsidies to energy (coal, electricity, natural gas, heavy oil) and to key inputs, land and technology. Four sequential studies identify the growth of subsidies to Chinese manufacturing over time and effects on world industry: steel (2000-2007), glass (2004-2008), paper (2002-2009) and auto parts (2001-2011). Subsidies to Chinese industry affect and are affected by business strategy and trade policy. Business strategies include lobbying for subsidies and for protection from subsidized foreign competitors and managing supply chains to guard against whiplash effects of uncoordinated subsidies. The subsidized solar industry highlights how global business strategies and decisions on production location and technology development respond to production or consumption subsidies and include market (competitive) and non-market (political) strategies. The book also covers government policies and regulation on subsidies broadly focusing on domestic consumption (antidumping and countervailing duties) and domestic production (indigenous innovation).

How did China move swiftly in capital-intensive industries without labor-cost or scale advantage from bit player to largest manufacturer and exporter? This book argues that industrial subsidies contributed significantly. Economic theories have portrayed subsidies as distortive, inefficiently reallocating resources according to non-market criteria. However, China's state-capitalist regime uses subsidies to promote the governments' and the Communist Party of China's interests. Rather than aberrations, subsidies help Chinese businesses, central and provincial governments produce, stabilize and create common understandings of markets. Concepts of state capitalism include market-transition theory, the multi-organizational Chinese state, and state as paramount shareholder. The authors measure subsidies using publicly-reported data at firm and industry levels from governmental and private sources. Subsidies include free to low-cost loans, subsidies to energy (coal, electricity, natural gas, heavy oil) and to key inputs, land and technology. Four sequential studies identify the growth and effects of subsidies to Chinese manufacturing over time: steel (2000-2007), glass (2004-2008), paper (2002-2009) and auto parts (2001-2011). Subsidies to Chinese industry affect and are affected by business strategy and trade policy. Business strategies include lobbying for subsidies and protection from subsidized foreign competitors, and managing supply chains to guard against whiplash effects of uncoordinated subsidies. The solar industry highlights how decisions on production location and technology development respond to production or consumption subsidies and include market (competitive) and non-market (political) strategies. The book also covers government policies and regulation on subsidies broadly focusing on domestic consumption (antidumping and countervailing duties) and domestic production (indigenous innovation).

The Nature, the Performance, and the Reform of State-owned Enterprises provides a detailed description of state-owned enterprises (SOEs) in China with respect to both efficiency and income distribution. It shows that state ownership in the form of SOEs does not use resources efficiently and has a poor record in income distribution. Moreover, SOEs are found to enjoy unfair advantages in their competition with other firms. To illustrate the point, the book presents data revealing how favored policies, monopolistic powers, and subsidies benefit SOEs. These advantages are worth several trillion yuans a year. It is a sad irony that such wealth of the people is used to beef up the revenues of the SOEs, making their accounts look much better than they should be.This book, with its rich empirical data and information, is an authoritative reference for researchers interested in SOEs. It is also a good read for students of social sciences and the public to learn more about SOEs.

Twenty-five years of reform have transformed China from a centrally planned and closed system to a predominantly market-driven and open economy. As a consequence, China is emerging as the new powerhouse for the world economy. China: new engine for world growth discusses the impact and significance of this transformation. It points out risks to the growth process and unfinished tasks of reform. It presents conclusions from recent research on growth, trade and investment, the financial sector, income and regional disparities, industrial location and private sector development.

China's extraordinarily rapid economic growth since 1978, driven by market-oriented reforms, has set world records and continued unabated, despite predictions of an inevitable slowdown. In The State Strikes Back: The End of Economic Reform in China?, renowned China scholar Nicholas R. Lardy argues that China's future growth prospects could be equally bright but are shadowed by the specter of resurgent state dominance, which has begun to diminish the vital role of the market and private firms in China's economy. Lardy's book arrives in timely fashion as a sequel to his pathbreaking Markets over Mao: The Rise of Private Business in China, published by PIIE in 2014. This book mobilizes new data to trace how President Xi Jinping has consistently championed state-owned or controlled enterprises, encouraging local political leaders and financial institutions to prop up ailing, underperforming companies that are a drag on China's potential. As with his previous book, Lardy's perspective departs from conventional wisdom, especially in its contention that China could achieve a high growth rate for the next two decades—if it reverses course and returns to the path of market-oriented reforms.

This unique book intends to provide a focused analysis of the main Chinese industrial sectors through case studies, data analysis and review of new state-initiated policies. In response to the global economic crisis in the short run and to cope with the existing structural problems of production in the long run, the Chinese central government has successively released new development outlines for 10 key industries since 2008. In this book, the authors will use key sectors including automobile, steel, shipbuilding, high-speed railway and new energy, to analyze the development of China's industries, along with their challenges and future prospects.The effectiveness of state-oriented policies in rejuvenating these industries will be evaluated. After discussing the background and motivations for the new government-initiated policies, through detailed analysis of these policies, the authors will assess the contribution they have made to industrial development. The authors will also identify and analyze existing and potential challenges to sustainable development of China's industries.How did the industries respond to climate change and the development of a low-carbon economy in China? What measures have been taken by these industries to reduce greenhouse gas (GHG) emission and reduce overall energy consumption? What are the latest developments in China's industrial sector in terms of technological progress and upgrading? What are the potential challenges facing the industrial sector in the post-economic crisis era? This study intends to address these issues.