Strategically designed state-level long-term development policies aimed at state transformation so that it can become a developed country within a relatively short period of time are a crucial part of DS characteristics. This chapter focuses on the main group of DS-related policies and establishes to what extent they are also part of China's developmental efforts during the transformation period. Policy selection has been decided upon the policies’ conformity with and importance for the DS model, as featured in the scholarly literature.

The perceptions on industrial policies

Developmental states’ economic modernisation efforts have often been referred to as a process of state-led industrialisation. Indeed, the process of industrialisation and, thus, industrial policy seem to be central elements of the DS, as industrialisation, also seen as a part of the process of the departure from an economic system dominated by rural activities, that is, urbanisation, is the core of historical DS transformation. The literature on industrial policies is rather extensive and detailed.

Ha-Joon Chang (1999a) points out that there is no unambiguous definition of industrial policy (IP) and that the term is often used in reference to too narrow a spectrum of economic activity, namely, state subsidies policy, or too broad a spectrum, namely, any economic activity related to industry. Indeed, Cimoli, Dosi and Stiglitz (2009, pp 1–2) claim that industrial policy:

Rodrik (2007, p 3) sees industrial policies as ‘policies that stimulate specific economic activities and promote structural change, thus, are not [exclusively] about industry per se’. However, for Lindbeck (1981), those policies do not involve monetary and fiscal measures. For Haggard (2004, p 64), industrial policies comprise ‘selective interventions designed to influence the allocation of resources among different activities’.