A recent regulatory storm in China: theoretical interpretation and applicability

Abstract

While the recent “regulatory storm” in China has attracted attention from media, academia, and policy makers both in China and overseas, there lacks theoretical interpretation of Chinese central government’s major regulatory practices. Based on the review on global reflection of the shortcomings of the current market economy system and China’s own market economy practices, this article argues that China’s strengthening of market regulation is based on a people-centered paradigm of the state-market relationship that takes into account both efficient market and effective government and that is consistent with the international framework to improve the market economy system, in particular the stakeholder economy. To support the argument, this article illustrates China’s “regulatory storm” in terms of corporate governance, environmental goals, social impacts, adverse consequences, and employee rights with reference to cases from sectors affected by the “regulatory storm”. Moreover, China’s recent regulatory measures reflect the effectiveness of the “strong government” in rapidly rectifying market order and are in line with the global trend of building a new market system, which is worthy of reference for other Asian countries with similar political and economic contexts.