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The Business Of Government & The Government Of Business

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:

The mainstream media has not been short of similar stories:

No doubt there are more stories I could highlight (such as the government’s role in managing approvals for foreign direct investment [8]), 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.