Chinese Businesses Benefit From Ties to Elites, Study Shows
- Anti-corruption fight increased value of political connections
- Researchers warn trend could harm China’s economic growth
A screen displays the emblem of the Chinese Communist Party in Beijing, China.
Photographer: Andrea Verdelli/BloombergPrivately owned Chinese companies with connections to elite politicians receive extra government subsidies, with the value of those ties increasing over the past decade despite an anti-corruption campaign led by President Xi Jinping, according to new research.
Private firms listed on Chinese stock exchanges with board members who attended college alongside a member of the ruling Communist Party’s Politburo -- a body that gathers the 25 highest-ranking officials -- received on average 16% higher subsidies relative to their sales between 2012-2017 compared with similar companies without those ties, according to a study published in the Journal of Institutional Economics this week.