Special Deals With Chinese Characteristics

Vocabulary flashcards based on the paper 'Special Deals with Chinese Characteristics'.

Special Deals (in China)

Favored private firms obtain benefits from local political leaders, enabling them to break formal rules or access resources favorably.

Extractive Economic Institutions

Political elites extract rents from the rest of society, enabled by the administrative capacity of local governments supporting businesses.

Informal Institutions (China, 1990s)

Institutions characterized by the availability of special deals to private firms.

Shanghai Inc.

Term used to describe Shanghai's support for General Motors, where the commercial goal of selling more GM cars becomes a political and economic campaign to enhance the power of the city.

Regionally Decentralized Authoritarianism.

A system where powerful local governments support the growth of private firms, often through special deals.

Strategic and Pillar Industries

Nine industries designated by the Chinese central government in the late 1990s, restricted to a handful of state-owned firms.

Negative List

A list of 12 industries where foreign firms were prohibited in 2015 according to the central government.

East Hope Group

A company that expanded into the aluminum industry by making a deal with the local government of Sanmenxia, circumventing central government restrictions.

SAIC (Shanghai Automobile Industrial Company)

A publicly traded firm with a majority stake held by the Shanghai local government, operating joint ventures with GM and Volkswagen.

Hyundai Elantra & Volkswagen Santana (Taxis in Beijing & Shanghai)

Cars exclusively used as taxis in Beijing and Shanghai due to local government incentives and protection of local industries.

Jiangsu Tieben

A large steel company established by Dai Guofang in Changzhou City, which was later shut down due to violating restrictions on private firms in strategic industries.

Joint Ventures

Partnerships that firms, such as the East Hope Group, use with state-owned firms to gain access to special deals outside their home province.

Conglomerates

Groups of firms with common owners, identified using firm registration records from China’s State Administration of Industry and Commerce (SAIC).

PC/PCC Membership

Membership in the local People’s Congress or Political Consultative Committee, used as a measure of political connections of firm owners.

Special Deals (in China)

Favored private firms obtain benefits from local political leaders, enabling them to break formal rules or access resources favorably.

Extractive Economic Institutions

Political elites extract rents from the rest of society, enabled by the administrative capacity of local governments supporting businesses.

Informal Institutions (China, 1990s)

Institutions characterized by the availability of special deals to private firms.

Shanghai Inc.

Term used to describe Shanghai's support for General Motors, where the commercial goal of selling more GM cars becomes a political and economic campaign to enhance the power of the city.

Regionally Decentralized Authoritarianism

A system where powerful local governments support the growth of private firms, often through special deals.

Strategic and Pillar Industries

Nine industries designated by the Chinese central government in the late 1990s, restricted to a handful of state-owned firms.

Negative List

A list of 12 industries where foreign firms were prohibited in 2015 according to the central government.

East Hope Group

A company that expanded into the aluminum industry by making a deal with the local government of Sanmenxia, circumventing central government restrictions.

SAIC (Shanghai Automobile Industrial Company)

A publicly traded firm with a majority stake held by the Shanghai local government, operating joint ventures with GM and Volkswagen.

Hyundai Elantra & Volkswagen Santana (Taxis in Beijing & Shanghai)

Cars exclusively used as taxis in Beijing and Shanghai due to local government incentives and protection of local industries.

Jiangsu Tieben

A large steel company established by Dai Guofang in Changzhou City, which was later shut down due to violating restrictions on private firms in strategic industries.

Joint Ventures

Partnerships that firms, such as the East Hope Group, use with state-owned firms to gain access to special deals outside their home province.

Conglomerates

Groups of firms with common owners, identified using firm registration records from China’s State Administration of Industry and Commerce (SAIC).

PC/PCC Membership

Membership in the local People’s Congress or Political Consultative Committee, used as a measure of political connections of firm owners.

Informal Institutions and Economic Growth in China

Economic expansion significantly driven by unofficial agreements and benefits provided by local administrations to encourage private sector growth.

Incentives for Local Officials to Support Businesses

Local leaders are motivated by career advancement and potential gains, fostering a supportive environment for business expansion.

Competition Among Local Governments

Competition among local authorities can mitigate some negative impacts of partiality, promoting innovation and efficiency.

Risks of Reforming Corrupt Systems

Crackdowns on corruption might destabilize established systems; strained relations with international partners could occur.

Special Deals vs. Rule-Based Institutions

Differ in that they are unwritten and flexible, offer quick solutions but may not offer the same protection; formal institutions provide structured, documented frameworks.

Informal Institutional Growth Strategies (Trade-offs)

This strategy has pros like fast growth and local innovation, but cons like corruption and no equal access.

Reforming Corrupt but Growth-Enabling Systems (Risks)

Balancing reform against disrupting economic vigor is key, especially when dealing internationally. The risks are great.