State Intervention and Business in China: The Role of Preferential Policies

With a population of 1.2 billion and nearly two decades of spectacular growth, China promises to become one of the world's largest economic powers and consumer markets in the next century. A salient feature of the contemporary Chinese economy is the significance of state intervention toward business in the form of 'preferential policies'. Thanks to these policies, a firm's location, ownership type and area of business largely determine whether it should receive privileges of disadvantages in the regulated business environment. The fast changing preferential policies have had great influence on a wide range of economic activities, including foreign direct investment. The extent, complexity and variety of these policies are bewildering to both investors and academics who study the Chinese economy.

State Intervention and Business in China is a systematic study of China's preferential economic policies. Dr Lu and Dr Tang present these policies in three categories, namely, the investor-oriented, the region-oriented, and the industry-oriented policies. The authors give a clear account of policies including: preferential tax rates, state bank loans, trade protection and subsidies, and licensing schemes. The book provides the in-depth political economy analyses that reveal the sources and functions of these policies. By offering empirical observations on the impact of state intervention on regional development and economic structures, this book sheds new light on the prospects for China's economic policy making.

State Intervention and Business in China will be indispensably for scholars and specialists who are interested in contemporary Chinese economy and society. It is also a valuable guide for doing business in China.

Ding Lu, University of the Fraser Valley, Canada and Zhimin Tang, formerly of The International Graduate School of Business, Australia