Zheng Yongnian on Local Government Overreach and the Private Economy

"Whether in the platform economy, new energy vehicles or any other sector, almost every private enterprise has some connection to the local government."

Recent criticism in official publications of economic mismanagement by some local governments may have opened space for sharper lines of enquiry among Chinese scholars. Last month, official statements on optimising the “unified national market” contained disapproval of “hidden and explicit barriers” in the internal market, a nod to local government protectionism, a point several high-level scholars then developed. A Qiushi article early this month by economist Zhang Jun directly criticised local governments for ploughing resources into favoured new industries and industrial park build-outs, without proper consideration of the economic logic in the local context.

Amid this, Zheng Yongnian offers a set of diagnoses and recommendations that are noticeably more pointed than his past prescriptions for lighter-touch governance. The core of his argument in this interview is that China now occupies a situation where across a range of sectors, “almost every private enterprise has some connectio…