The green leap forward? : State capitalism, industrial policy, and the limits of green transformation in China

Abstract

China’s rapid expansion in green industries – the green leap for-ward – is frequently cited as evidence of the effectiveness of state-led industrial policy in accelerating technological upgrading anddecarbonisation. This article critically examines that claim througha comparative analysis of two flagship sectors: solar photovoltaicsand electric vehicles. Drawing on ecological modernisation theoryand the political economy of industrial policy, the paper concep-tualises green industrialisation as a politically embedded processshaped by persistent trade-offs between scale expansion, marketdiscipline, and environmental sustainability. Using qualitative docu-ment analysis and secondary data, the study traces the evolution ofstate support instruments in both sectors and evaluates their effec-tiveness through Rodrik’s criteria of embeddedness, discipline, andaccountability. The findings show that while state intervention hasbeen instrumental in overcoming entry barriers, coordinating large-scale investment, and enabling the emergence of globally compe-titive firms, it has also generated enduring distortions, includingovercapacity, policy dependence, and environmental ambiguity.