provides economic analysis and policy advice with the aim of promoting sustainable and equitable development. The Institute began operations in 1985 in Helsinki, Finland, as the first research and training centre of the United Nations University. Today it is a unique blend of think tank, research institute, and UN agency-providing a range of services from policy advice to governments as well as freely available original research. The Institute is funded through income from an endowment fund with additional contributions to its work programme from Finland, Sweden, and the United Kingdom as well as earmarked contributions for specific projects from a variety of donors.

This chapter provides an account of China’s institutional and policy learning efforts to move from a centrally planned to a development-state model of structural transformation. What distinguishes China’s experience—as in the case of other East Asian countries—in successfully building and upgrading local sectors and firms lies not so much with a unique set of policy tools, as a willingness to experiment with those tools and to attach performance criteria that helped guide the behavior of firms towards wider national development objectives. While many other developing countries under structural adjustment programmes quickly adopted export promotion, China was closely studying East Asian countries in its transition by strategically blending an export push with selective import substitution. In short, Chinese policymakers had direct experience on how powerful industrial policies could be misused, but this did not stop them from actively trying to find better ways of using them. Doing so was a matter of political economy.

While other contributions in this volume delve into the fine-grained detail and diversity of development processes in Asian countries and sub-regions, this chapter analyses the opening-up experiences of China, India, and Malaysia by triangulating between: (i) the orientation of selected policy tools in trade, technology, investment, and finance in shaping a country’s degree of economic openness; (ii) the rational co-ordination of operational controls of these policy tools; and (iii) the overall development trends observed in the Asia region. The ‘rational co-ordination of operational controls’ is interpreted with reference to the strategic use of selected policy tools in the successful cases of earlier East Asian industrialization. The chapter contends that divergence in Asian growth can be understood by variations in pragmatic policy experimentation by national policymakers in search of more effective institutional mechanisms to achieve desired development outcomes.

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