The introduction to the Chinese Economy. Social Sciences Essay

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Relationship between Business and Government in China
The Introduction to the Chinese Economy
The Chinese economy has gone through a process stretched over an entire century to morph from pure communism to semi-liberal economic structure. China was among the earliest adopters of communism in its real essence. A dive into the history shows that politics in China has been dominating the corporate world with control over the market and rights of discretionary interventions reserved (Heinzig 45). However, as the loopholes of communism got exposed, China began its shift away from communistic paradigms in the direction of market liberty. Over time, entrepreneurs enjoyed power with the support and non-interventionist behavior shown by the government. The economic growth of China-driven by this revolutionary change also created a strong case in its favor (Heinzig 78). However, a close examination reveals that the Chinese economy is still controlled by the government whereas legislation and the traditions steeped into the legacy of the Chinese economy are used as major tools by the government. Corruption and conflicts between the government and business are evident though both the parties manage their relations through an agreement. Still, the government enjoys a visible edge (Tian, et al. 8; Brødsgaard 624). The paper is aimed at exploring the interaction and relationship between government and business in China in a contemporary context concerning key economic concepts.
Role of Business versus Government in Running the Country
Government and business are two dominant forces in any state or community. In every country, certain historical, traditional, and other contextual factors play a vital role in determining the comparative roles of each party (Zhang and Zhu 7). For instance, in the Western World (e.g. the example of the United States), the corporate world is a dominant power. It dominates the political setup as the interest of political parties are hinged upon the support from the elite. Traditions of the West also support a capitalistic market structure where the government can have the least intervention only under forced circumstances (Zhang and Zhu 45). Conversely, there are also countries where governments rule and dictate business practices. These economies either have their roots in communism or have dominant figures in politics with strong control over legislations and other state institutions (Zhang and Zhu 10). A country may also find a balance between these two extremes.
As for China, there are mixed characteristics. The question as to which party runs the country needs an overview of a complicated background. The first thing that is beyond any doubt is that China has made excellent progress in terms of liberating its economy. The country has released itself from the trap of a pure communistic model that had largely been stifling its growth (Heinzig 78). Since the socialistic movements under the Communist Party of China, in 1978, ignited a move away from communism through its reform agenda, China went through a prolonged phase of readjustment and redistribution of power between the Government and business. The power has flown from political authorities to entrepreneurs as the state-ownership soon came to an end following the rise of liberal thoughts. Since then, the elite found incentives in setting up its ventures in the country and went on expanding its investments (Brødsgaard 624). In the modern context, China is largely appreciated for the economic growth it has achieved while supported by the measures aimed at liberating its economy.
While seen in the light of the above perspective, it is clear that any political party in China would be under immense pressure to carry on the revolutionary changes and not to reverse on the agenda of capitalism. Certainly, the business community has a large share in the rapidly growing economy of China. If the government tries to restrict or intervene in the corporate world only to exercise its control, it may supposedly be faced with much criticism and resistance since capitalistic forces have already gained their footholds.
However, a deeper investigation shows that the political system in China is yet designed to support interventionist which is a clear perception in the West. Despite making significant strides in the direction of the free market, the corporate community has not yet been able to break away from the legislative control (Zhu 199). To understand as to how the government has maintained its supremacy, it is important to build an insight into the fundamental of the Chinese political system. Unlike most of the Western economies, China continues to rely on its one-party system where the Communist Party enjoys the privilege (Brødsgaard 628). This implies that competition is non-existent in the political domain of China. This lack of competition gives a clear edge to the ruling party.
In Western business-driven economies, politicians are pressed to take care of and protect the rights of business communities because it helps them in electioneering to win the support from these highly influential strata. The politicians need support from business class at all levels. If they do not care about the demands of the corporate world, they are likely to be faced with isolation and competitive disadvantage over their rivals. In China, since a single party is supposed to repeatedly take charge of the office, there is no concept of competition or electioneering. The party can fearlessly use its privilege as it does not have its campaigning at stake, as opposed to the Western political system if it does not support the business community. The only thing that may play a role in balancing the power between business and government is the government's pursuit of popularity. Hence, the government will not put much at stake if it contradicts the will of the business community or exercise intervention.
The analysis shows that the government has leeway due to the unchallenged political system of China. The government has an edge over the business community due to its dominant control. Lack of competition allows political powers in authority to control business and make it support their causes. Hence, it is not out of place to infer that it is the government, and not the business community, that runs the state and has comparatively greater control.
While considering the control and authority involving the ability to run the state, it is also important to have a look at how both the parties under consideration are interrelated. Corruption is an irrefutable reality plaguing the interactions between the government and entrepreneurs. The bureaus in the country have complicity with the government in taking bribes and supporting the corruption (Zhu 221). According to Zhang, et al (7), construction has the highest levels of the business to government corruption in China. The builders and other entrepreneurs belonging to construction industry gain special concessions on terms and conditions and may also solicit the government officials to pass certain approvals in exchange of bribe. These practices are underway in China both openly and behind the curtains with no control measures in place. Zhang, et al have also pointed out the major causes behind the prevalent business to government corruption in China. According to the researchers, regulatory flaws are at the forefront of the current state of corruption in China in the relationship between the government and business. The government has control over regulatory bodies, allowing it to have its practices go unnoticed. Besides, the lack of a proper ethical code in professional terms is a critical loophole that the government officials and business community use to their unfair advantage (Zhang, et al. 10). Zhang (375) also endorses the notion of high business to government corruption in China, but they mainly hold the poor tendering process responsible for this purpose. There is a critical lack of standardized practices of procurement about the public projects. The government may non-optimally assign the projects to comparatively less competitive prospects against illegitimate financial gains.
Irrespective of the reasons behind corrupt government-business relations, it is clear that the government has the power to steer the state while the business community takes the back seat through its role as a complementary force cannot be overlooked. The business officials extending bribes to the government officials also serve as the evidence of the government's superiority.
The Politics and Business Group Formation in China
As mentioned before, during the era of communism, state-ownership remained unchallenged across all industries and domains of the economy. However, much has changed since the reforms were introduced. The corporate world has achieved much independence in terms of its structuring and functioning. Now businesses are free to operate their managerial operations as befitting their business objectives (Brødsgaard 624). Hence, businesses enjoy visible freedom in today's semi...