New Book Announcement: Description, Features, Review from US Solar Industry

Subsidies to Chinese Industry:  State Capitalism, Business Strategy and
Trade Policy by Usha C. V. Haley and George T. Haley, forthcoming Oxford
University Press, USA, February 2013.

For a pre-publication discount of 20 percent, please click here:  For more information, please click here:
=usa&ci=9780199773749> &ci=9780199773749 


How did China move so swiftly in capital-intensive industries without
labor-cost or scale advantage from bit player to the largest manufacturer
and exporter in the world? This book argues that subsidies contributed
significantly to China's success. Industrial subsidies in key Chinese
manufacturing industries may exceed thirty percent of industrial output.
Economic theories have mostly portrayed subsidies as distortive,
inefficiently reallocating resources according to non-market criteria.
However, China's state-capitalist regime uses subsidies to promote the
governments' and the Communist Party of China's interests. Rather than
aberrations, subsidies help Chinese businesses and governments produce,
stabilize and create common understandings of markets; the flows of capital
reflect struggles between critical Chinese actors including central and
provincial governments. Concepts of state capitalism including
market-transition theory, the multi-organizational Chinese state, and state
as paramount shareholder, create complex and relevant understandings of
Chinese subsidies. The authors develop independent measures of industrial
subsidies using publicly-reported data at firm and industry levels from
governmental and private sources. Subsidies include free to low-cost loans,
subsidies to energy (coal, electricity, natural gas, heavy oil) and to key
inputs, land and technology. Four sequential studies identify the growth of
subsidies to Chinese manufacturing over time and effects on world industry:
steel (2000-2007), glass (2004-2008), paper (2002-2009) and auto parts
(2001-2011). Subsidies to Chinese industry affect and are affected by
business strategy and trade policy. Business strategies include lobbying for
subsidies and for protection from subsidized foreign competitors and
managing supply chains to guard against whiplash effects of uncoordinated
subsidies. The subsidized solar industry highlights how global business
strategies and decisions on production location and technology development
respond to production or consumption subsidies and include market
(competitive) and non-market (political) strategies. The book also covers
government policies and regulation on subsidies broadly focusing on domestic
consumption (antidumping and countervailing duties) and domestic production
(indigenous innovation). 


.        We use our understandings of state capitalism and imperfect markets
to provide a theoretically complex and relevant explanation for industrial
subsidies that in key Chinese manufacturing industries appear in dollar
terms to exceed over thirty percent of industrial output.

.        We develop independent measures of industrial subsidies using
publicly-reported data at company and industrial levels and from diverse

.        We extend other theories on business and strategic groups'
responses to trade policy, including subsidies, by examining generic market
(competitive) and non-market (political) strategies that businesses may

.        Over the last five years, research in this book on several
industries including steel, glass, paper, auto parts and solar has supported
regulation and business strategy both in the United States and the European


From Gordon Brinser, President, SolarWorld Industries America Inc.,
Hillsboro, Ore:

"This richly researched book provides a much-needed foundation for grasping
the serious and growing threat posed by China's massive subsidization of its
export-intensive strategic industries, which is harming industrial growth in
the West.  Upending conventional wisdom, the book shows that China's success
does not stem from cost advantages as much as from subsidies calibrated for
world-market dominance. Cutting-edge manufacturers and workers in the United
States and Europe are paying a heavy toll.  As an executive of the largest
solar-technology manufacturer in the Americas, which concluded one of the
biggest trade cases ever brought against China, I can attest that
traditional trade law and policy approaches, on their own, may not be enough
to combat China's state-engineered export juggernaut.  In light of the
massive scale of subsidies supporting Chinese export manufacturers, China's
growing reliance on state-owned enterprises, its disregard for intellectual
property protections and its lack of transparency, Usha and George Haley
have provided important recommendations to ensure fair and robust
competition across the oceans as well as a bright economic future for our

Product Details

240 pages; 6-1/8 x 9-1/4; ISBN13: 978-0-19-977374-9ISBN10: 0-19-977374-2

About the Author(s)

Usha Haley is Professor of International Business at Massey University,
Auckland, New Zealand and Research Associate at the Economic Policy
Institute, Washington, DC.

George Haley is Professor of Marketing & International Business, and
Director of the Center for International Industry Competitiveness at the
University of New Haven


Usha C. V. Haley, PhD

Professor of International Business, Massey University, Auckland, NZ


Research Associate, Economic Policy Institute, Washington, DC, USA


Office Address: School of Management, Massey University, Private Bag 102904,

North Shore City 0745, Auckland, New Zealand

E-mail: [log in to unmask] & [log in to unmask] 

NZ Phone: +64 9 4140800 ext 43406   US Phone: 1-860-322-0701   US Fax:

WWW: Usha Haley - Massey profile <> 



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