China’s Ambitions: Building the ‘National Team’

From the late 1970s to the late 1990s, the Chinese government used a wide array of industrial policies to support the growth of a ‘national team’ of large firms that could compete with the world’s leading corporations. The foundations of this effort were the large industrial plants inherited from the former command economy. This approach to economic policy directly challenged the prevailing trend of globalization and liberalization. It was radically different from that advocated by the free market orthodoxy of mainstream economics and from the policies advanced by the international institutions of the ‘Washington Consensus’, notably the IMF and the World Bank. It differed comprehensively from the industrial reform policies pursued in the former Soviet Union and in Eastern Europe. The attempt raised deep questions about the role of the state in promoting national economic development and about the nature of capitalism itself. It involved fundamental questions concerning China’s international relations in the early twenty-first century, namely the terms under which it will interact with the high-income countries in general, and, in particular, with the global superpower, the United States.