The writer is professor of law at the University of Southern California and author of ‘High Wire: How China Regulates Big Tech and Governs Its Economy’
The cosy relationship between China’s local governments and its private businesses used to be described as the “mayor economy”: officials clear regulatory barriers, provide cheap land, tax breaks and even subsidies, all to drive regional economic growth.
In recent years, however, struggling local authorities have increasingly targeted private businesses with a wide range of punitive legal actions, from fines to criminal prosecutions for offences such as tax evasion, bribery, fraud and product safety violations. Their need to raise funds means the helping hand of local government has turned into a chokehold.