Private Enterprise Regulation as Institutional Adjustment in China’s Authoritarian System: Alibaba Group and Evergrande Group

In the early 2020s, the Chinese government implemented increasingly stringent regulations on private enterprises. While private enterprises remain a fundamental driver of China’s economic growth, this sudden regulatory intensification presents a problematic policy shift, particularly given its contribution to economic uncertainty. Moreover, this policy transformation proves difficult to reconcile with existing scholarly literature that posits a direct correlation between economic growth and authoritarian regime stability. This study examines the underlying rationale for heightened private enterprise regulation through an analysis of China’s institutional characteristics, specifically focusing on its centralized bureaucratic system and the structural hierarchical relationship between the Party and enterprises. Building upon this framework, this research investigates how China’s institutional characteristics have influenced regulatory intensification by examining the growth trajectories and regulatory experiences of Alibaba Group and Evergrande Group, which represent China’s digital economy and real estate market respectively. This study argues that the information asymmetries and rent-seeking behaviors that intensified during market development posed structural challenges to China’s political-economic institutions, leading to enhanced regulatory measures on private enterprises as a means of institutional adjustment.