Regional Competition and Political-Economic Interactions, Chinese Style

Regional competition surrounding economic development has been a critical element with distinctive Chinese characteristics during the reform and opening-up process over the past four decades. Based on a review and synthesis of existing literature, this paper first examines the historical evolution, key features, and institutional causes of regional competition in China, pointing out that promotion competition among local officials and market competition among local enterprises are the main driving forces. Subsequently, the paper explores significant impacts of regional competition on the political-economic interaction process with Chinese characteristics, focusing on three unique effects: first, it has shaped local governments that integrate three key roles of public service providers, competitive players, and market-participants; second, it has created a trinity government-market relationship involving the central government, local governments, and the market, rather than a traditional dichotomy between government and market; third, it has facilitated the formation of regional growth alliances and a government-business cooperative relationship based on the nexus between political achievements and economic performance.