Building Regulatory State with China’s Market-oriented Economic Reforms: A Comparative Study of Competition Policy and Environmental Policy

China’s market-oriented economic reforms over the last four decades have fostered the development of a market-preserving government (Qian and Weingast, 1997, Xu, 2011). The 1980s and 1990s were marked with the privatization of state-owned enterprises and the efforts taken by the Chinese government to enter into the World Trade Organization. Along with this process, the Chinese government has also implemented several rounds of regulatory reforms to improve its governance capacity by building western-style regulatory agencies in anti-trust/competition policy, food safe, environmental protection, etc. In recent years, many studies have attempted to examine the institutional logic of the development of regulatory regimes in authoritarian China. However, there has been a lack of general knowledge regarding how the building of regulatory state in China can be linked with western theories of market failures. In this research, we examine how the antitrust regulatory system and environmental protection system in China’s have been transitioning from small administrative units to key functions of central government ministries/administrations, and how market failure theories have been used to support the building of regulatory agencies by central governmental officials. This research contributes to a better understanding of institutional logic of regulatory state building in China.
References
Qian, Yingyi, and Barry R. Weingast. 1997. Federalism as a commitment to preserving market incentives. The Journal of Economic Perspectives 11:83-92.
Xu, Chenggang. 2011. The fundamental institutions of China’s reform and development. Journal of Economic Literature. 49: 1076–1151.