The above National Plan (2018 国家产业调整布局) is a detailed guide for the re-alignment of exisitng and new industries between various provinces, cities, prefectures and counties in the North East, East, Central and West regions. It aims at the orderly phasing-out, upgrading and regional, provincial, and locational postioning of exisitng and new industries, including new materials, new energies, digital and information technologies, intelligent manufacturing, aerospace, transportation, shipping, pharmaceuticals, food and other consumer products, as well as a variety of light industries.
Somewhat reminiscent of a planned economy, the above Plan is a good example of how China's reformed development model manages to achieve rapid growth by combing national planning, state direction, the private sector, and free market dynamics.
As between various provinces and localities, competition is very keen. Competition with foreign enterprises both in China and overseas is expected to redouble following current trade war accommodations and adjustments
As for the perceived fatal flaw of State-Owned Enterprises predominance, let's not forget that the private sector in China remains very much alive and kicking. All it takes is a stroll along some of the many busy shopping and recreational districts throughout China. Indeed, as part of a relief package in response to the trade war, a substantial Mid-Term Lending Facility (TMLF) is designed to support the private sector. Click here (PowerPoint presentation Slide 11).
Singapore is a shining example of how state-backed conglomerates can co-exist synergistically with a vibrant private sector. (China's Crisis of Success, William Overholt, Cambridge University Press, 2018, pp. 246-7). Although the author doesn't think that this could apply to China on account of Singapore's much smaller size, there is no convincing argument why size alone would make this inapplicable.
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