Here are some examples illustrating how Chinese companies combine decentralized autonomy with centralized control:
- Privatization and Control Rights Transfer: In China’s privatization process, local governments often initiate and manage the sale of state-owned enterprises (SOEs), choosing different methods such as management buyouts (MBOs) or employee shareholding. These methods transfer control rights to private owners, but the local governments retain some influence, especially in the early stages of privatization designed to align ownership with local economic goals.
- Regional Blockchain Development: The Hebei Province Blockchain Special Plan exemplifies decentralization, where local governments support blockchain startups with policies that promote innovation and industrial development. Yet, these initiatives operate within a broader centralized framework where the provincial government sets strategic priorities, guiding the overall direction but allowing local experimentation for technological advancement.
- Decentralized Innovation within Centralized Policy: The biotech sector under Xi Jinping’s governance combines rapid resource mobilization at the national level with operational flexibility granted to certain firms and research institutes. While the central government directs strategic priorities and security measures, it allows local entities to experiment with new technologies and methods, fostering innovation while maintaining overall control.
- Financial and Regulatory Decentralization: In some regions, local authorities have the autonomy to issue loans or develop blockchain payment systems, which can improve efficiency and responsiveness. However, these actions are often monitored and constrained by national policies, balancing local agility with central oversight.
These examples illustrate the Chinese approach of maintaining a delicate balance—granting local autonomy for innovation and efficiency, while retaining overarching control to ensure stability and alignment with national goals.