The ruling Communist Party promised in 2013 to give market forces the “decisive role” in allocating resources. But at the same time, Xi has affirmed plans to build up state industries the party says are the central pillar of the economy.
“The thing that is going to be more challenging for Beijing is if the U.S., European Union and Japan get together and start taking measures on state-owned enterprises,” said Baig. “That for me would be an escalation, whereas product-by-product back and forth, amounting to a few billion dollars here or there, is not a major substantive concern.”
Foreign governments also accuse Beijing of violating free trade by requiring automakers and other foreign companies to work through state-owned Chinese partners. That requires them to give technology to potential competitors.
Last month, a U.S. official cited as “hugely problematic” Beijing’s sweeping plan to create Chinese competitors in electric cars, robots, advanced manufacturing and other fields over the next decade. Business groups complain that strategy, dubbed “Made in China 2025,” will limit or outright block access to those industries.
