The Economics Show Lessons from China’s industrial dominance, with Kyle Chan
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Mar 20, 2026 
Kyle Chan, a Brookings fellow who studies China’s tech and industrial policy, offers a big-picture tour of how China modernizes industry. He discusses the hybrid of state direction and private competition. He highlights chokepoint-focused investments, EV and battery synergies, rapid advances in biotech and AI, and the role of state firms in scaling infrastructure.
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State Guided Markets Solve Coordination Bottlenecks
- China's economic model mixes state direction with market competition to solve coordination problems.
- Beijing targets choke points like infrastructure and energy, then uses private competition to scale innovative firms such as EVs and batteries.
Problem Solving Over Blueprints
- Chinese policy focuses on problem solving and identifying bottlenecks rather than rigid long-term plans.
- Example: policymakers invested heavily in power grids and treated batteries and EVs as symbiotic sectors to create mutual demand and rapid scaling.
Overcapacity From Localized Industrial Racing
- China's industrial policy creates waste and overcapacity through redundant local projects and scale-driven output.
- Current example: multiple localities building EV plants leading Beijing to withdraw some incentives like consumer tax breaks.