The Hoover Project on China’s Global Sharp Power held an event titled: Industrial Policy Uncertainty in China on Friday, December 8, 2023 at 12:00 pm PT.

Will China maintain its comparative advantage in industrial policy? State-led investment boosts competitiveness today, but the long-run sustainability of this model depends crucially on policy efficiency. In this talk, Andrew Sinclair presented his work using a comprehensive dataset of all industrial policy announcements by China's State Council from 2008 to 2022 to find that policy uncertainty introduces a shadow financial cost that substantially reduces the efficiency of Chinese industrial policy. Industrial policies increase firm value, but investors heavily discount the value of future support because of the risk that policies may abruptly and arbitrarily change.


Andrew Sinclair is a Visiting Assistant Professor of Finance at Caltec, on leave from The University of Hong Kong. He is a financial economist studying modern China's financial system. He graduated with a PhD in finance from Yale University in 2017 and joined HKU the same year.


Matthew Lowenstein is a Hoover Fellow at the Hoover Institution. He is an economic historian of late imperial and Republican-era China. Prior to entering academia, he worked as a securities analyst covering China equities at JCaptial Research. 

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