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The Adjustment Approach of China’s Industrial Policy in the New Era(No.68, 2018)


By Wei Jigang & Zhao Changwen, Research Department of Industrial Economy, DRC

Research Report No.68, 2018 (Total 5343) 2018-4-18

Abstract: The development of a country relies on the organic combination of the market performance and government administration and industrial policy is an important tool to realize such a combination. The multiple attribute of industrial policy decides that it is not only used to eradicate the market failure, but also a means to realize national strategy, cultivate its competitive advantage and ensure its industrial safety. China has implemented industrial policy across the board with gratifying results whereas it has paid dearly for that. As the development backdrop, strategic target and major task for China in the new era have all changed greatly, its industrial policy needs to focus on building China into an industrial power and improving the overall business environment. In light of the structural arrangement for specific industries, areas and objects, the government needs to remove the constraints on development, enhance innovation capacity, sharpen international competitive edge, enhance the capacity for sustainable development, promote the resource allocation efficiency and improve the level of social welfare. In line with the principles of centering on the national development strategy, the government needs to intervene in situations where market failure occurs, strengthen functional policies, optimize optional policies and take policy coordination into consideration to realize a win-win result in global affairs. In addition, the government needs to make appropriate policy adjustment according to the changes of the situation.

Key words: industrial policy, industrial power, market