The horizontal and vertical coordination of policy mixes for industrial upgrading in China: an ambidexterity perspective

Abstract

ABSTRACT The established literature demonstrates the critical role of the policy mix in the formulation and implementation of government policies for industrial upgrading. However, existing studies mainly examine the policy mix from either a horizontal or a vertical coordination perspective; very few examine both dimensions. To gain further insights, the current study involves an analysis of how China’s central government manages horizontal and vertical coordination to pursue upgrading in manufacturing industries on the basis of an ambidextrous policy mix perspective and a thorough examination of both the external attributes (i.e., policy level) and content (i.e., policy instruments and themes) of policy documents. This analysis reveals several viable policy implications in relation to China’s manufacturing transformation. In particular, it finds that China’s policy mix for achieving manufacturing upgrading is highly coordinated on both horizontal and vertical dimensions. Governments at all levels apply the same set of policy instruments; environmental instruments are the most frequently used, followed by supply- and demand-side instruments. The core policy topics within the manufacturing upgrading structure include innovation, industrial transformation, industrial agglomeration, demonstration projects and service-oriented manufacturing. Therefore, this study establishes recommendations for future policies, which should focus on reinforcing guidance regarding national policies, encouraging local governments to apply innovative policy tools and increasing the use of demand-side policy instruments.