Over the past few decades, China’s rise as a global economic and technological powerhouse has been driven primarily by a state-led development model heavily reliant on industrial policies and the real estate industry. This paradigm has sparked intense academic and policy debates regarding its long-term sustainability and impact on the global stage, particularly U.S.-China relations. Broad critical questions emerge: Why do some Chinese industrial policies achieve success while others fail, and what policies can ensure balanced industrial development while mitigating risks posed by external sanctions? How can China prevent real estate market fluctuations from undermining its broader economic development? Who truly benefits the U.S.-China trade war, and how can the dynamics shift toward a more positive outcome? This dissertation, structured as three standalone articles, addresses these pressing and interrelated issues.
The first article explores how divergent industrial policies in high-tech industries reveal strengths and weaknesses in China’s development model, particularly in terms of technological self-sufficiency and U.S.-China competition. Utilizing machine learning and qualitative content analysis of Chinese official documents and secondary sources, it reveals that while supercomputing policies facilitated technological resilience in the face of U.S. sanctions, 5G development suffered due to unbalanced policies that prioritized infrastructure and equipment investment and downstream applications at the expense of foundational research and development.
The second article examines the effects of Chongqing’s land price control policy in 2013 on housing prices and household consumption, employing a regularized synthetic control approach – a quasi-experimental design. It shows that the policy intervention effectively stabilized housing prices and boosted household consumption, offering a potential model for sustainable growth.
The third article models the ongoing U.S.-China trade war, which is deeply rooted in China’s development model and U.S.-China rivalry, demonstrating that neither country benefits in its current form. The study suggests that reducing protectionist, restrictive, and retaliatory measures could lead to more positive-sum outcomes.
Collectively, these articles offer a comprehensive analysis of the challenges and risks embedded in China’s development model. While the state-led paradigm has yielded impressive achievements, including technological advancements and rapid economic growth, it also harbors significant risks, such as technological dependence, real estate market volatility, and trade imbalances. Addressing these internal and external challenges is crucial for China to achieve sustainable growth and foster more constructive relations with the United States.