Can China Change Its Industrialization Path? Beyond the 2004-2005 Industrial Policy Debate in China

The chemical accident in Fujian Province in April 2015 and frequent winter smog that often covers a large number of eastern Chinese cities have resulted in policy debates similar to the one held 10 years ago. The topic of these debates is, “Does China need to change its industrialization path?” By reconsidering the 2004- 2005 Debate, the paper will focus on the policy content behind the controversy of economic theories and beyond, namely, the relationship between the theories and formation of policies in which stages of diversification and the M-form of Chinese governance are highlights. We conclude that China has experienced environment-forcing and state-oriented economic development paradigm shift.