The Business Of Government & The Government Of Business

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In recent years the Chinese government has done much to extract itself from business, to let its five-year plans become “programmes”, and to allow “socialist market” forces to have their way. However it still retains significant interests in strategic sectors, and in the largest state enterprises. It has also retained a strong regulatory role, and is not afraid to stamp its authority on the marketplace. Several reminders of this have appeared in the blogoshpere recently, including:

    • An order for standardization of mobile phone chargers (to reduce waste – from China Law Blog)

    • Banning of commercials on two TV channels (to control misleading content and warn others – from Danwei)

    • Removal of (unharmonious) advertising hoardings in Beijing – from ImageThief.

The mainstream media has not been short of similar stories:

    • The China Banking Regulatory Commission’s (CBRC) parachuting in of senior officials to run three commercial banks (one with restructuring, and two with imminent IPOs – from the FT)

    • A temporary ban on new internet cafes (to help purify and protect young minds – via the BBC)

    • Government intervention to control pork prices with a RMB6.5 billion (US$850 m) support package (including subsidies to breeders – from People’s Daily)

    • Reduction or removal of VAT export rebates for many products (that will hit exporters – as reported here in an earlier post)

No doubt there are more stories I could highlight (such as the government’s role in managing approvals for foreign direct investment), but then this post would run on and on forever….

The point is that all of them serve as a reminder of the real power that government in China still exerts over business through its policy and regulatory functions. If they are to take advantage of opportunities, and be aware of possible risks, businesses in China need to include policy analysis alongside market analysis – and keep up-to-date on both fronts. In China, government is never far from business.

One Response to “The Business Of Government & The Government Of Business”

  1. Finance information » Blog Archive » The Business Of Government & The Government Of Business Says:

    […] rcial banks (one with restructuring, and two with imminent IPOs […] Original post by Jeremy Gordon and powered by Img Fly

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