Abstract
The policy of solving financial discrimination against private enterprises developed by the Chinese government has been unable to be implemented for a long time. After the financial crisis of 2008, supporting the development of private enterprises becomes an important policy goal. However, in Wenzhou, dominated by private enterprises, the intention implement of the central government is still invisible. In this study, the nature of Chinese party-state capitalism, behavioral logic of local governments, and operating systems after bank commercialization, and other structural factors are analyzed to explore the reason why the policy solving financial discrimination against private enterprises developed by centralized China cannot be implemented in Wenzhou. The results show that even though the financial system under the structure of financial repression and party-state capitalism has experienced business-oriented reforms, it is still controlled by the party-state, resulting in central and local governments can use bank funds to support state-owned enterprises by mastering personnel and administrative resource, consolidating legitimacy by the economic development. In this study, it is suggested that the central government, local governments, and banking sectors are not common stakeholders. When the party intends to be interleaved together with sector interests, sectors regard self-interest maintenance as a priority, so that the policy directives passed down of the central government are necessarily distorted by various actors and cannot be implemented. As a result, solving financial discrimination against private enterprises highlights fragmented authoritarianism makes central policy failure that centralized party-state authority paralyzes.