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Toward State Capitalism in China?

Author

Listed:
  • Risto Herrala

    (Bank of Finland Institute for Economies in Transition (BOFIT))

  • Yandong Jia

    (People's Bank of China Research Institute of Finance and Banking)

Abstract

We study empirically credit availability of listed firms in China for the years 2003–11 to uncover underlying trends in economic policies. The estimations indicate increasing favoritism of state-owned firms in credit availability, consistent with a drive toward "state capitalism." Initially, favoritism applied mainly to firms owned by the central government, but the difference between central and local government firms gradually diminished to insignificance. These results signal that economic policies pushed the Chinese economy from the path toward a market economy and state capitalism, and that the economic importance of local governments was growing.

Suggested Citation

  • Risto Herrala & Yandong Jia, 2015. "Toward State Capitalism in China?," Asian Economic Papers, MIT Press, vol. 14(2), pages 163-175, Summer.
    • Handle: RePEc:tpr:asiaec:v:14:y:2015:i:2:p:163-175
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    Citations

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    Cited by:

    1. Jiatao Li & Ari Van Assche & Lee Li & Gongming Qian, 2022. "Foreign direct investment along the Belt and Road: A political economy perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(5), pages 902-919, July.
    2. Yiping Huang & Xue Wang & Xun Wang, 2020. "Mobile Payment in China: Practice and Its Effects," Asian Economic Papers, MIT Press, vol. 19(3), pages 1-18, Fall.
    3. Zibei Chen & Minchao Jin, 2017. "Financial Inclusion in China: Use of Credit," Journal of Family and Economic Issues, Springer, vol. 38(4), pages 528-540, December.
    4. Cheng, Hong & Fan, Hanbing & Hoshi, Takeo & Hu, Dezhuang, 2024. "State ownership, political connection, and innovation subsidies in China," Journal of the Japanese and International Economies, Elsevier, vol. 71(C).
    5. Hong Cheng & Hanbing Fan & Takeo Hoshi & Dezhuang Hu, 2019. "Do Innovation Subsidies Make Chinese Firms More Innovative? Evidence from the China Employer Employee Survey," NBER Working Papers 25432, National Bureau of Economic Research, Inc.
    6. John Knight, 2015. "The Principal-Agent Problem, Economic Growth, Subjective Wellbeing and Social Instability: China’s Effective but Flawed Governance," Economics Series Working Papers 758, University of Oxford, Department of Economics.

    More about this item

    Keywords

    capitalism; state capitalism; state-owned firms; credit availability; favoritism;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • P10 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - General

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