New Developments and Empirical Evidence
Edited by Michael Faure and Xinzhu Zhang
Chapter 2: Abuse of administrative power to restrict competition in China: four reflections, two ideas and a thought
It is no great insight to observe that part of the impulse for developing and modernizing something as enormous as the Chinese economy comes from the realization that a more modern and competition-based approach to the organization of commercial activity may potentially facilitate greater social mobility, and thereby help gradually to attenuate overall poverty, social stratification, institutionalized nepotism and a radically skewed distribution of wealth. Another part of the impulse is the central government’s strategic drive to preserve, consolidate and perhaps recapture political power through agenda setting and institution building. These romantic and unromantic interpretations are not irreconcilable; indeed, It is quite plausible that a strategic actor (such as a central government) may seek to exploit growth-and welfare-enhancing initiatives and even income-redistributive mechanisms with a view to attaining the less edifying aim of power maximization. One may add the simple and related observation that reform on a national scale poses great challenges. Modernizing initiatives cannot credibly claim that everyone wins: change poses risks for vested interests, and the threat of their reduced security is both a price and prize to be weighed.
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