In this article, the authors examine China's current industrial policy and argue that it is primarily driven by local governments, which can result in low levels of cross-regional cooperation and inconsistent policy implementation. To address these challenges, a centrally-led industrial policy that is more consistent with the needs of a unified market is promoted. The article suggests that the central government should lead the formulation, implementation, and guidance of industrial policy. Finally, the article proposes five key measures for the central leading industrial policy:
First, the central government should select and provide policy support to basic and strategic industries.
Second, local governments should prioritize not impeding the construction of a unified national market.
Third, advanced manufacturing clusters should be a key focus of industrial policies.
Fourth, traditional industrial policy instruments such as financial subsidies should be replaced with support methods that align with international rules.
Fifth, an industrial policy coordination committee should be established to enhance policy coordination and implementation.
Overall, the authors believe that a centrally-led industrial policy that prioritizes cooperation and consistency will help to promote a unified industrial policy system led by the central government.
