Industrial Policy Implementation: Empirical Evidence from China’s Shipbuilding Industry

This paper examines how industrial policy was implemented in China’s shipbuilding industry and evaluates its effects on firm behavior, market structure, and global competition. Combining detailed industry data with structural modeling, the authors analyze the role of subsidies, financing support, and government intervention in shaping China’s rapid rise in global shipbuilding. The study finds that industrial policy substantially increased Chinese production capacity and market share, while also generating distortions in investment and competition. The paper contributes to broader debates on the effectiveness and consequences of state-led industrial policy in strategic industries.