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Controlling Corporate Power in China: Case Studies of Seed Companies and Water Distribution

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  • Lanying Zhang
  • Guanqi Li
  • Huili He

Abstract

In the course of China's economic transition, the government set up a policy goal to gradually withdraw from the market, while, at the same time, increasing the intensity of anti†corruption actions. This article reviews the development of Chinese modern corporations and corresponding policy changes. The development and expansion of modern corporations as a result of reforms that occurred after 1978 reveals the government's decision not to fully withdraw from the market. When private companies are allowed to pursue maximum profits, especially in areas of public resources and services, society and the environment suffer severe negative consequences. Case studies of corporate control of seed companies and water utilities demonstrate in detail the damage caused by privatization. In order to protect the interests of society from corruption, government must concentrate on reducing the rent†seeking behavior of corporations and collusion between businesses and government officials. The Chinese government's fight against corruption in recent years has been based on its market involvement, as well as on its determination to confine the power of corporations, which is a tough game.

Suggested Citation

  • Lanying Zhang & Guanqi Li & Huili He, 2018. "Controlling Corporate Power in China: Case Studies of Seed Companies and Water Distribution," American Journal of Economics and Sociology, Wiley Blackwell, vol. 77(2), pages 511-540, March.
    • Handle: RePEc:bla:ajecsc:v:77:y:2018:i:2:p:511-540
    DOI: 10.1111/ajes.12210
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    References listed on IDEAS

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    1. Krueger, Anne O, 1974. "The Political Economy of the Rent-Seeking Society," American Economic Review, American Economic Association, vol. 64(3), pages 291-303, June.
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