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).

Subsidies to Chinese Industry: State Capitalism, Business Strategy, and Trade Policy

Business & Money

Haley, Usha C.V.

Haley, George T.

Economics

Oxford University Press

New Asian Emperors

Much has been written about the rise of the Asian economies in recent decades, and their coming economic dominance in the next century. The New Asian Emperors shows how and why overseas Chinese companies are achieving dominance in the Asia Pacific. In the wake of the Asian Currency crisis, this book takes a fresh look at the role of the overseas Chinese as they continue to create some of Asia's most wealthy and successful companies. In particular, the authors tackle the principal difference between Western and Eastern business practices. The overseas Chinese, due to their origins and history developed a unique form of management - now they maintain it as their competitive advantage. Although Asian governments are currently floundering, the overseas Chinese networks continue to prosper. The authors explain the following to Eastern and Western managers: the sources and characteristics of overseas Chinese management, how to combat the overseas Chinese, the strengths and exploitable weaknesses of the overseas Chinese, whether overseas Chinese management practices will spread in the same way as Japanese management did, whether Western management technologies will find themselves outclassed. A feature of the book are the exclusive, in-depth interviews with the New Asian Emperors since most of them avoid the press and little is known of them. - Develops a systematic theory of the Overseas Chinese networks and how they strategize - Draws on interviews with CEOs of major Overseas Chinese companies, many of whom have never granted interviews before to academics

Routledge

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