“Economy, Finance, and Money? A State-Subsidized Economy!”Also Different: Economy and Finance, Technology and Skills, the Deep Structure of Robust Development—Agile Industrial Policy, Banking, Regulation and Deregulation, State and “Market”, Cracking Down on Big-Tech, Real-Estate, and Finance Oligopolies

Wolfram Elsner () and Elyar Najmehchi
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Wolfram Elsner: University of Bremen (ret.)

Chapter Chapter 6 in The Rise of China, 2026, pp 123-198 from Springer

Abstract: Abstract This chapter examines China’s economic development model, contrasting it with Western economic policy models, with a focus on industrial, technological, and structural policies. It illustrates how China’s success stems from a long-term, coordinated strategy combining large-scale state investments in education, research, infrastructure, and strategic industries with inclusion of private enterprises and SMEs in national development goals. Policy flexibility, big-data-informed planning, and a mix of regulation and market competition enable rapid experimentation and adaptation across sectors, particularly in AI, IT, and semiconductors. China’s approach to development is illustrated in detail in the example of the IT sector: Oligopolistic tendencies are managed through regulation, interoperability mandates, and the socialization of infrastructure investments, while entrepreneurs must operate within frameworks aligned with national priorities. The chapter examines the cases of Alibaba, Ant Group, and Huawei, showing how the state balances corporate innovation, accountability, and strategic objectives, fostering resilience and long-term competitiveness. The chapter also explains how China’s trade, technology, and industrial strategies have allowed it to withstand US trade wars and technology restrictions, diversify its global supply chains, and accelerate domestic innovation, including alternative chip technologies. Across sectors, political primacy, coordinated investment, and structural foresight ensure economic resilience. In contrast, Western neoliberal approaches, characterized by deregulated markets, financialization, short-termism, and ideological constraints, often fail to match China’s adaptive and systemic capacity for long-term technological and economic development.

Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-032-20260-4_6

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DOI: 10.1007/978-3-032-20260-4_6

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