Chinese Private Entrepreneurs’ Formal Political Connections: Industrial and Geographical Distribution

Abstract

This chapter explores the inter-reliance of government and business in China from a less studied perspective: how formal political connections of Chinese private entrepreneurs are distributed across industrial sectors and geographical regions in China. Based on the survey data of Chinese private enterprises from 2000 to 2012, we use the annual average ratio of private entrepreneurs who are members of People’s Congress (PC) and/or Chinese People’s Political Consultative Conference (CPPCC) in an industry or province as the indicator of formal political connection density. We find resource-dependent industries, such as mining and agriculture, and provinces with rich natural resources tend to have high density of formal political connections, whereas the formal connection density in economically more developed provinces along the coastal area is lower. This pattern reflects government’s remaining intervention in market economy and its stronger reliance on enterprises in certain industries and regions.