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The Oxford Companion to the Economics of China$
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Shenggen Fan, Ravi Kanbur, Shang-Jin Wei, and Xiaobo Zhang

Print publication date: 2014

Print ISBN-13: 9780199678204

Published to Oxford Scholarship Online: December 2014

DOI: 10.1093/acprof:oso/9780199678204.001.0001

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Trade and industrial policy China in the 1990s to today

Trade and industrial policy China in the 1990s to today

(p.161) 24 Trade and industrial policy China in the 1990s to today
The Oxford Companion to the Economics of China

Ann Harrison

Oxford University Press

The Chinese government has intervened extensively to promote industrialization in China, relying on a range of policy instruments. This chapter first discusses the tax and tariff incentives offered to manufacturing firms in China during the last two decades. It then reviews the evidence regarding the impact of tax incentives and tariff protection on firm performance. It shows that China's industrial promotion policies have achieved varied success. The use of tax holidays for exporters and FDI promotion led to much better outcomes than higher tariffs or VAT rebates in backward provinces.

Keywords:   trade policy, economic policy, tax incentives, tariff protection, manufacturing industry, foreign direct investment

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