Chinese economy

Policy brief

published: 22.05.2024

Unpacking China’s industrial policy tools and why it matters for Europe

Alicia Garcia Herrero

Robin Schindowski

China’s industrial policy has attracted a lot of attention, not only in emerging economies but also in developed ones, including the European Union. And yet the debate often focuses excessively on the Chinese government’s provision of subsidies for companies. In this first brief of a two-piece series on China’s industrial policy Bruegel researchers Alicia García-Herrero and Robin Schindowski review the general economic rationale behind industrial policy and how it applies to China. They also analyse the wealth of instruments China is using to conduct industrial policy. Given the complexities and opacity of such instruments, they conclude that subsidies are just the tip of the iceberg with relevant conclusions for the EU to draw.

About authors

Alicia Garcia Herrero

Chief Economist for Asia Pacific at Natixis, Senior Fellow at Bruegel, Non-resident Senior Follow at the East Asian Institute, Adjunct Professor at the Hong Kong University of Science and Technology

Economist specialized in monetary and financial issues in emerging markets, banking crises and resolution strategies, financial development

Robin Schindowski

Research Assistant at Bruegel

Economist with a background in Chinese studies, specializing in China’s political economy and industrial organization