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Professor Hanming Fang presents on China's industrial policies during a SCCEI seminar. | Xinmin Zhao

At a recent SCCEI Seminar economist Hanming Fang presented a sweeping new analysis of how China’s industrial policies have evolved over the past 20 years. The study, Decoding China’s Industrial Policies, coauthored with Ming Li and Guangli Lu, uses large language models to compile, codify, and analyze nearly 3 million documents to build one of the most detailed databases of industrial policymaking in China to date.

By linking these documents to firm-level administrative data, the researchers provide a comprehensive look at who makes industrial policy, what tools are used, why specific industries are supported, and how those policies play a role in overcapacity in China.
 


Local Governments Drive Most Industrial Policymaking


The data show that roughly 80 percent of industrial policies originate from local governments, including provinces, cities, and counties, while only about 13 percent come from the central government. This pattern highlights the importance of local initiative in shaping China’s industrial landscape.

Over time, however, the researchers find that central influence has grown, with greater policy coordination across different levels of government, especially since the early 2010s.

Policy Tools Evolve as Industries Mature


The study finds that China uses a wide range of tools to carry out its industrial policies, including fiscal subsidies, market access and regulation policies, support technology R&D and adoption, labor policy, and tax incentives, among others. 

The composition of these tools shifts systematically as industries develop.

  • Emerging industries tend to receive entry-oriented support such as subsidies and land incentives.
  • Mature-industry policies more often target R&D, labor and skills development, supply chain coordination, and consumer-side demand stimulation.

This evolution shows a clear pattern in how governments adjust policy instruments over time.

Imitation is Widespread — and Linked to Weaker Results


Many local governments replicate industrial policies from other regions, particularly from cities within the same province. This imitation contributes to policy duplication, inefficient competition, and industrial overcapacity when multiple localities pursue the same sectors or strategies.

Empirically, the study shows that “follower cities” — those that copy policy language or design from others and upper level governments without nuanced local adaptations — experience smaller gains in firm sales, profits, and productivity compared with cities that create original policies. The findings highlight how widespread imitation can dilute the effectiveness of local policy initiatives.

Different Tools Yield Different Firm Outcomes


By linking policy activity to firm-level data, researchers identify how industrial support affects businesses:

  • Industries targeted with supportive policies are more likely to receive subsidies, higher tax deduction rates, and long-term loans.
  • Fiscal and land subsidies are associated with higher rates of firm entry and investment.
  • R&D support, cluster development, and equity investment show stronger correlations with productivity growth.

These findings highlight the diversity of policy instruments and their varied associations with firm performance.

A Comprehensive View of China’s Policy Landscape


Together, the results provide an unprecedented data-driven map of China’s industrial policymaking from 2000 to 2022.

The dataset—covering millions of documents and thousands of firms—offers a new empirical foundation for understanding how industrial policies are designed, implemented, and adapted over time.
 



Professor Hanming Fang is an applied microeconomist with broad theoretical and empirical interests focusing on public economics. His research integrates rigorous modeling with careful data analysis and has focused on the economic analysis of discrimination; insurance markets, particularly life insurance and health insurance; and health care, including Medicare. 

Hanming Fang is Norman C. Grosman Professor of Economics at the University of Pennsylvania. In early 2026, Professor Fang will join the Stanford Center on China’s Economy and Institutions as a Skyline Scholar. During his appointment he will participate in a rich spectrum of activities including expert talks and collaborative research efforts.
 


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At a SCCEI Seminar economist Hanming Fang presented a sweeping new analysis of how China’s industrial policies have evolved over the past 20 years. Using LLMs, the researchers compiled, codified, and analyzed nearly 3 million documents to build one of the most detailed databases of industrial policymaking in China to date.

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Why do authoritarian regimes charge political opponents with nonpolitical crimes when they can levy charges directly related to opponents’ political activism? We argue that doing so disguises political repression and undermines the moral authority of opponents, minimizing backlash and mobilization. To test this argument, we conduct a survey experiment, which shows that disguised repression decreases perceptions of dissidents’ morality, decreases people’s willingness to engage in dissent on behalf of the dissident, and increases support for repression of the dissident. We then assess the external validity of the argument by analyzing millions of Chinese social media posts made before and after a large crackdown of vocal government critics in China in 2013. We find that individuals with larger online followings are more likely to be charged with nonpolitical crimes, and those charged with nonpolitical crimes are less likely to receive public sympathy and support.

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The Journal of Politics
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China’s total fertility rate declined very little following implementation of the One Child Policy (OCP) in 1979/1980, but then fell sharply, by more than one-third, during the early 1990s. In this paper, we propose that strengthening bureaucratic incentives under the “One Vote Veto” (OVV) policy, which strictly prohibited career promotion for adherence failure, was necessary for more “effective” implementation of the OCP—and for its delayed impact on fertility. We use provincial variation in OVV implementation to estimate event study regression inputs needed to build actual and counterfactual sequential multi-decrement fertility life tables, finding that the policy explains 46% of China’s total fertility rate decline during the 1990s, driving it below replacement level. Use of intrauterine devices (IUDs, the most prevalent form of modern contraception in China) that was “recommended” by party officials increased by 133% under the policy, a relative increase more than four times as large as the increase in “voluntary” use. Overall, our paper suggests that population policy made a larger contribution to low fertility in China than suggested by past research. More generally, our paper highlights the central role of aligning bureaucratic incentives with public policy objectives, even in a centrally-planned economy like China’s.

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National Bureau of Economic Research (NBER)
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Hongbin Li
Lingsheng Meng
Grant Miller
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Policy experiments are crucial for fostering innovation and mitigating risks and can serve as catalysts for transformative changes. This study investigates the governance of policy experiments in China, focusing on how political factors shape their outcomes. It emphasizes the need to consider concurrent trials—related policy trials implemented simultaneously in a locality that can influence outcomes—when selecting comparable cases for analysis. Such consideration is critical, especially when the policy issue spans multiple sectors and the level of difficulty differs across sectors. By comparing five cities engaged in the same three decarbonization pilots between 2010 and 2015, Hangzhou and Xiamen are identified to have had similar initial conditions and goals but achieved divergent outcomes. This research uncovers the critical role of political leadership in achieving varying levels of decarbonization progress and identifies policy coherence with broader local priorities to be the key explanation for continued leadership attention and efforts devoted to decarbonization despite turnover. The study contributes to the literature by addressing the under-studied impact of political factors and concurrent trials, offering a replicable procedure for future research and practical policy applications.

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Policy Studies Journal
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This paper empirically investigates the labor market effects of China’s 2007 VAT reform, which significantly reduced the tax cost of capital investment. Employing city-by-year variation in the reform, we demonstrate that the tax cuts increased the earnings of skilled workers and left the earnings of the unskilled workers unaffected. Moreover, we find limited impacts of the reform on employment for both skill groups. These results suggest that the tax incentives increased the relative demand for skills, thus resulting in a higher income inequality between skilled and unskilled workers.

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Labour Economics
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Hongbin Li
Lingsheng Meng

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Spencer Smith is the Administrative Associate at the Rural Education Action Program (REAP) at Stanford Center on China’s Economy and Institutions (SCCEI). He graduated magna cum laude from the University of Oregon in 2023 and holds a B.S. with honors in Political Science and Ethnic Studies. Prior to joining SCCEI, Spencer held several positions at the University of Oregon where he worked to enhance administrative processes, research operations, and academic programs at both the School of Law and the Lyllye Reynolds-Parker Black Cultural Center. His academic and professional experiences instilled in him a deep interest in participatory action research, cross-cultural collaboration, and project management, which led him to join REAP in the fall of 2024. While at SCCEI, Spencer will be working on a variety of projects that facilitate the administration of REAP’s research and programs.

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Why do authoritarian regimes charge political opponents with non-political crimes when they can levy charges directly related to opponents' political activism?

On October 3, 2024, Stanford Professor of Communication, Jennifer Pan, presented her recent research answering this question. Professor Pan and her research collaborators used experimental and observational data from China and found that, “disguising repression by charging opponents with non-political crimes undermines the moral authority of opponents, minimizing backlash and mobilization while increasing public support for repression.”

During the lecture, Pan detailed the survey she and her collaborators conducted in China and shared a case study using data from Weibo to illustrate how China uses select charges to manipulate the public's view of influential dissidents and induce self-censorship among other dissidents in an act of disguised repression.


 

SCCEI China Briefs: Translating academic research in evidence-based insights

SCCEI produced a China Brief based off of Professor Pan’s paper on disguised repression in China. Read the brief here for a synthesized recap of the paper. 
 



Watch the recorded lecture to learn more about the research and her findings. 
 

 

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Why do authoritarian regimes charge political opponents with non-political crimes when they can levy charges directly related to opponents' political activism? Professor Pan presents her newest research during a Fall 2024 SCCEI event.

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China’s economy registered an average annual growth of 9.5% from the start of reforms in 1978 until 2019. Throughout this period, economic performance was a key indicator of China’s success and served as a critical pillar of the Chinese Communist Party’s legitimacy. Over the past five years, however, China’s leadership has taken an ideological turn under Xi Jinping, and economic growth has no longer been a top priority.

To examine the myriad factors behind China’s recent economic slowdown and, more importantly, consider where China might be headed, the Stanford Center on China’s Economy and Institutions and Asia Society Policy Institute’s Center for China Analysis co-organized the fourth in their series of closed-door roundtables. Held in April 2024 and conducted under the Chatham House Rule, the roundtable brought together leading experts on the Chinese economy for a discussion focused on the following questions:

  1. What is the mix of determinants — cyclical, structural, and political — for slower economic growth in China?
  2. How much can China’s recent economic woes be attributed to Beijing’s own policy mistakes, and how much to tensions between China’s hybrid Leninist political regime and the dynamism of a market economy?
  3. What are the potential political, social, and geopolitical consequences of the slowdown?
  4. If the slowdown continues, or even worsens, could the leadership’s priorities shift? If so, what policy measures or structural reforms might reverse the slowdown and preempt some of the broader consequences?
     

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The Stanford Center on China’s Economy and Institutions and Asia Society Policy Institute’s Center for China Analysis co-organized a closed-door roundtable on China's recent economic slowdown and produced summary report of the discussion.

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How do state-controlled broadcasters reach foreign publics to engage in public diplomacy in the era of social media? Previous research suggests that features unique to social media, such as the ability to engage in two-way communication with audiences, provide state-controlled broadcasters new opportunities for online public diplomacy. In this paper, we examine what strategies were used by four Chinese state-controlled media outlets on Twitter to reach foreign publics as the Chinese Communist Party worked to expand its public diplomacy and international media outreach efforts. We find that all outlets increased the volume and diversity of content while none engaged in interactive, two-way communication with audiences, and none appeared to artificially inflate their follower count. One outlet, China Global Television Network, made outsized gains in followership, and it differs from the other Chinese outlets in that it was rebranded, it disseminated a relatively lower share of government-mandated narratives pertaining to China, and the tone of its reporting was more negative. These results show that during a period when Chinese state-controlled broadcasters gained followers on Twitter, outlets made limited use of features unique to social media and instead primarily used social media as a broadcast channel.

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Political Communication
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Jennifer Pan
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The Stanford Center on China’s Economy and Institutions and Asia Society Policy Institute’s Center for China Analysis co-organized a closed-door roundtable on the extent, causes, and implications of China’s current property sector slowdown. The roundtable focused on China’s property sector, which has been a major engine of economic growth in China for over three decades. Through its large impact on local government revenues, the financial sector, household wealth, and employment, the property sector plays an outsized role in China’s economy – far more than in most other countries. 

By 2021, however, there were signs that China’s property sector may be reaching a peak, and even beginning to contract, potentially signifying wider distress in the economy. The property sector exemplifies an investment-driven growth model that China has pursued for the past few decades, and the policy responses to the current property downturn also has implications for how and whether China can transition toward an alternative, high-quality growth model less reliant on the property sector.  

The summary report of the roundtable, conducted under the Chatham House Rule, details the in-depth discussion that centered on four key questions:

  1. How sharp and sustained will the slowdown in China’s property sector be?
  2. What are the most important determinants of this slowdown: government policy or structural factors? 
  3. What are the implications of China’s property slowdown for other areas of China’s economy? 
  4. What can China do to offset risks and negative consequences associated with the property slowdown?

     


 

In partnership with Asia Society Policy Institute's Center for China Analysis

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The Stanford Center on China’s Economy and Institutions and Asia Society Policy Institute’s Center for China Analysis co-organized a closed-door roundtable on the extent, causes, and implications of China’s current property sector slowdown and produced a summary report of the discussion.

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