Awakening giant: international business in China growth, opportunities and challenges

This paper analyses China's growth through a developmental state framework, taking into account the positive role of the state in deliberately fostering a strategic industrial policy, with the aim of creating a process of rapid industrialisation and overcoming structural and technological constraints. It is argued that China growth has been achieved through a strong industrial policy implemented by state intervention in a way similar to other late-industrialised East Asian countries such as Japan, South Korea, Taiwan and Hong Kong. In particular, there are three main features in Chinese development typical of a developmental state policy: the constant control by the state of economic prices and allocation of resources, the focus on export-oriented firms and the openness towards foreign direct investment in order to overcome technology backwardness. China's growth has been analysed from an historical perspective in order to identify the key government reforms which have sustained and enhanced economic growth within the country. It is demonstrated that the industrial policy played a significant role in creating rapid industrialisation.