Special Deals with Chinese Characteristics

49 Pages Posted: 22 May 2019 Last revised: 6 Feb 2023

See all articles by Chong-En Bai

Chong-En Bai

Tsinghua University - School of Economics & Management

Chang-Tai Hsieh

University of Chicago - Booth School of Business; University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Zheng (Michael) Song

City University of Hong Kong (CityU)

Multiple version iconThere are 2 versions of this paper

Date Written: May 2019

Abstract

Chinese local governments wield their enormous political power and administrative capacity to provide “special deals” for favored private firms. We argue that China’s extraordinary economic growth comes from these special deals. Local political leaders do so because they derive personal benefits, either political or monetary, from providing special deals. Competition between local governments limits the predatory effects of special deals.

Suggested Citation

Bai, Chong-En and Hsieh, Chang-Tai and Song, Zheng (Michael), Special Deals with Chinese Characteristics (May 2019). NBER Working Paper No. w25839, Available at SSRN: https://ssrn.com/abstract=3390987

Chong-En Bai (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Chang-Tai Hsieh

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Zheng (Michael) Song

City University of Hong Kong (CityU) ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

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