Policy and media forces that shape the creation of Chinese state-owned enterprise policies

Abstract

In this exploratory research, we examine the effect of policy and media indicators on the creation of Chinese state-owned enterprise policies. Using a VAR model, we show that Ministry of Finance policy and People’s Daily mention of small enterprises can explain, to some extent, the incidence of state-owned enterprise policies. We verify that non-government forces are less important in determining Chinese SOE policy incidence, as has been suspected by foreign observers, and that policy is indeed made through government agenda setting or consensus building. We also provide evidence to validate the theory of Leutert (2021), that SOE policy occurs in a feedback loop (it is self-reinforcing). These explanations of Chinese policy making can be applied to other government departments to further explain policy incidence.