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SOE reform and industrial upgrading

Author  :  SHI WEI     Source  :    Chinese Social Sciences Today     2021-11-02

 

The Ladder for Catching-up: Political Economy of SOE Reform and Industrial Upgrading

The Ladder for Catching-up: Political Economy of SOE Reform and Industrial Upgrading, written by Zhou Jianjun, an associate research fellow from the Research Center for State-Owned Assets Supervision and Administration Commission of China’s State Council, enriches and tests existing economic theories combining domestic and international development experience and practice, so as to restore real-world economics.

The book touches upon the institutional factors and specific paths of economic catch-up from the three dimensions of the institutional influence of national development strategies, the management models of state-owned assets and state-owned enterprises (SOEs), and the paths of industrial upgrading and catch-up. It takes into account international and domestic cases, historical and current situations, and experience and lessons, to restore real-world SOE and industrial policies. It aims to learn from those beneficial to China’s economic development and drive market-oriented SOE reforms and innovation-driven industrial upgrades, propelling the realization of China’s economic catch-up goals.

Any theoretical hypothesis must be tested by historical empirical data. The author highlights “real economics.” The real history reveals the real economics of developed countries including the United States—the active industrial policies, as well as multinationals and leading companies, who play a dominant role in the global industrial chain and value chain.

Under a spatial and temporal framework, Zhou demonstrates how policy choices adjust in the development and competition of the semiconductor industry in the United States, Japan, South Korea, and other countries. For example, the successful experience of Japan and South Korea as chasers derives not only from the strategy of concentration, but also from gripping the key nodes of technological evolution. Through details, the author makes up for the punctiform descriptions of previous policy research on international experience.

The book intensively uncovers the reality of multinationals’ oligopoly in the international competition of science and technology. With decentralized forces dealing with the increasing capital monopoly in the international market, economies of scale and large companies should undertake greater missions in international competition. Regarding the supervision and regulation of natural resources, resources themselves are not a problem, and natural resources do not necessarily lead to resource curses. The crux lies in the institutional design and management around resources. To perform well in institutional design for innovation-driven progress and industrial agglomeration, we first need to understand the characteristics of China’s national conditions.

 

Shi Wei is a research fellow from the Chinese Academy of Fiscal Sciences.

Editor: Yu Hui

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