Industrial policy,corporate governance,and the competitiveness of China's national champions: The case of Shanghai Baosteel Group

The paper presents an in-depth case study of the Shanghai Baosteel Group as a contribution to the overall assessment of the competitiveness and catch-up capability of the Chinese national champions after China's WTO accession. Significant competitive advantages of the firm in the domestic industry are identified, with cautionary remarks concerning the future stiff competition with the global steel giants. Through detailed examinations of the corporate governance mechanism and the industrial policy implementation in Baosteel and the whole steel sector, the paper sheds light on the institutional and policy challenges that the Chinese government has to face in building up its big businesses. It is concluded that whether Baosteel could emerge as a globally competitive steel firm depends critically upon the effectiveness of both the further reform of the state-dominated corporate governance system and the improvement of the industrial policy enforcement.