New Delhi, March 30 (IANS) China’s industrial rise is due to institutionalised competition among provinces, cities and firms, with the central government acting as a referee and disciplinarian rather than as an engineer, a new report has said.

The report from The Globe and Mail called China’s industrial policy "authoritarianism", adding that it "behaves less like central planning than a state-enabled pressure cooker."

Such a system thrived by enabling rivalry across firms and provinces, with the centre steering, rewarding and occasionally reining in excess, it added.

Special economic zones (SEZs) such as Shenzhen served as fenced experiments where officials tried these competitive experiments and successful models were scaled nationally while failures were contained, it said.

China runs a promotion race with provincial and city leaders rising or stalling on measurable outcomes such as investment, growth and jobs.

The report cited political economist Xu Chenggang as saying that the model is “regionally decentralised authoritarianism”.

It urged the Western democracies such as the United States, Canada or Europe not to emulate China's model, and criticised the West’s recently found appreciation for making China its "awkward benchmark".

It argued that democratic countries cannot easily replicate China’s model which "is inseparable from a one-party cadre system that can appoint and reshuffle local leaders, tying careers to targets."

Western governments should not mimic China’s tool kit or retreat into techno-nationalist fortresses, but to make their own economies more contestable, the report said, calling on democracies to widen entry and rivalry and not try to shelter incumbent industry leaders.

“Industrial policy that shelters incumbents will disappoint; industrial policy that backs challengers and subjects them to real competition has a chance,” the report added.

It reminded that China’s gains in EVs, solar and batteries owe less to a master plan than to political centralisation combined with rivalry across provinces and cities.

“In EVs, local governments bid for plants and add inducements; competition has become so fierce that Beijing frets about “irrational” price wars,” the report said, noting that the same pattern appeared in solar industry and in AI.

—IANS

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