The pivot: how China turbocharged its industrial policy and remade the global economy

Huang Yiping, a veteran Chinese economist, has attended countless policy forums and high-level summits over his long career. But one event at Peking University a decade ago stands out.Academic debates are often niche, sparsely attended affairs, but that afternoon in November 2016 was different. Seats in the auditorium were snatched up in minutes as people piled in to witness a showdown that had attracted nationwide attention.The public frenzy centred on a rare face-to-face clash between two titans of Chinese economics – Justin Lin Yifu and Zhang Weiying – who had sharply contrasting ideas on how China’s economy should function.Zhang was a firm advocate of the free market – a doctrine that had been globally ascendant since the 1980s. But Lin championed an approach that was starting to gain prominence once again: industrial policy.For Huang, who moderated the debate, it is striking looking back how much the intellectual climate has changed in China in the years since, as Beijing has increasingly embraced Lin’s ideas.“At the time, many scholars were probably not very supportive of industrial policy,” recalled Huang, who now serves as dean of Peking University’s National School of Development and a central bank adviser.“But looking at the issue today, the balance may have shifted slightly, largely because even in many mature market economies, market failure has proved prominent and industrial policy is also common now.”