ABSTRACT
The economic re-emergence of China is widely considered one of the great success stories in recent economic history. However, contemporary economic development has largely been achieved through policies that ran counter to the policy advice of the ruling economic development orthodoxy of western governments and international institutions. Nonetheless, the Chinese authorities were able to utilize the forces of globalization for domestic economic development, while simultaneously retaining the policy space to complement these resources through pragmatic industrial policies. In this, the experience has confirmed the critics of the ruling western orthodoxy, who have argued that developing countries need a more active industrial policy and questioned why countries in Latin America, following the western policy recommendations closely, did so much worse economically than countries in East Asia (Stiglitz 2002; Rodrik 2007). Similarly, Chang (2003) has wondered why contemporary policy advice, generously shared by developed countries, has little to do with the policies these countries themselves followed during their own economic development. Instead, he has argued that successful development is almost always the result of industrial policies and infant industry promotion, an observation that is largely shared by Nolan (2001).
