Government Policies and Private Enterprise Development in China: 2003–2006

Shiyong Zhao

China & World Economy, 2009, vol. 17, issue 4, 36-52

Abstract: The relationship between government policy and economic development has been along‐standing topic of academic research and policy debate. The government of a transitional economy plays an important role in the process of economic development. Over the past three decades, the Chinese economy has been growing very rapidly, in particular because of the rapid development of the private sector. However, the performance of private enterprises is still affected by government policies. In the present paper, we examine the changes in large Chinese private enterprises' performance during 2003–2006 and test the determinants of such changes. We conclude that the Chinese Government's discriminating policies against private enterprises are the main cause of the private sector's downturn.

Date: 2009
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