Chinese State Capitalism and the Environment

Regulating the Visible Hand? The Institutional Implications of Chinese State Capitalism (Curtis Milhaupt & Benjamin Liebman eds, 2015)

UCLA School of Law, Public Law Research Paper No. 15-52

47 Pages Posted: 24 Apr 2015 Last revised: 28 Oct 2017

See all articles by Alex Wang

Alex Wang

University of California, Los Angeles (UCLA) - School of Law

Date Written: April 21, 2015

Abstract

China’s state-owned enterprises (SOEs) have contributed mightily to the country’s environmental problems. Scholars and commentators have long treated SOEs as “vested interests” with a particular ability to thwart central Party-state environmental objectives. The inability of the state to reform SOEs and stem the tide of environmental degradation is, in turn, seen as evidence of China’s governance deficits and a threat to the ultimate legitimacy and long-term survival of the Chinese state.

This Chapter examines an emerging set of strategies that Chinese leaders are using to counter this dynamic. Rather than resort to the types of political, legal, and market reforms that liberal commentators typically support, Chinese authorities appear to be engaged in an effort to bring about environmental reform in significant part by accommodating elite SOE interests, bringing them along with a large helping of positive incentives and a relatively smaller dose of traditional regulatory enforcement.

Drawing from public choice theory, this Chapter further argues that salient aspects of authoritarian governance (i.e., instrumental concerns about legitimacy and elite rent seeking) are not necessarily incompatible with the delivery of public goods, like environmental quality. Ultimately, it is not clear whether SOEs will in fact respond to state incentives to implement Chinese environmental policies, but there are reasons to believe that SOEs may in fact be more responsive than conventional wisdom assumes.

Keywords: China, environment, environmental regulation, state-owned enterprises, environmental protection, legitimacy

Suggested Citation

Wang, Alex, Chinese State Capitalism and the Environment (April 21, 2015). Regulating the Visible Hand? The Institutional Implications of Chinese State Capitalism (Curtis Milhaupt & Benjamin Liebman eds, 2015); UCLA School of Law, Public Law Research Paper No. 15-52. Available at SSRN: https://ssrn.com/abstract=2597411

Alex Wang (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
1242 Law Building, Room 3382
Los Angeles, CA 90095-1476
United States

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