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Decoding China’s Industrial Policies
Hanming Fang, Ming Li, Guangli Lu, Jul 02, 2025Industrial policy is often discussed through high-level narratives and flagship initiatives, yet its implementation—particularly at the subnational level—remains opaque. We leverage large language models (LLMs) to systematically analyze over three million government documents from 2000 to 2022, extracting structured policy information to decode China’s industrial policy at various levels of government. Combining these newly constructed granular industrial policy data with micro-level firm data, we document four sets of facts on China’s industrial policies, including the economic and political rationality of the choice of the target sectors, the dynamics of the policy tools, the diffusion and similarity of policies, and the effects on firm entry and productivity.
