Outlook Weekly recently published a report entitled "Beware of the inflation of departmental interests." This article conveys the increasing prominence of interest groups in the central government in recent years. The impact of interest groups is a major cause of this phenomenon.

As the market develops and the government acquires extensive resources and strong capabilities for intervening, various "interest groups" in China have rapidly developed, and are exerting an extensive and profound influence on government decision-making and the implementation of policies.

First are the various interest groups composed of overseas or foreign parties, for instance the chambers of commerce of various countries and the associations of foreign companies investing in China (trade associations under the Ministry of Commerce). These exert a huge influence on China's ministerial decision-making and legislation by means of using their own governments, political lobbying, buying and using the favor of children of senior-level cadres, hiring departmental leaders and staff as paid consultants, and providing significant amounts of cash in the form of research funds for various ministerial research institutions and scholars. This is key to a series of major problems, including problems with the leaking of political and economic information; problems with China's economy being highly dependant on foreign countries; problems that damage the independence of China's industrial system; problems with foreign companies enjoying "super-national treatment" in China over a long period of time and problems with unifying the tax rate for domestic and foreign enterprises.

Secondly state-owned monopolies in the fields of banking (the four big banks and one big insurance company), energy (power and petroleum), post and telecoms, transportation (railway and civil aviation), and infrastructure construction, have relied on administrative monopolies to hold great power in their markets. To defend their leading position and to continue to reap profits from their monopolies, some of these companies have sought out spokespersons from among politicians, academics, and the media, have influenced or even manipulated the right to speak out, and have thus defended their monopoly position and kept out competition and the entrance of private economic parties. They have bypassed laws and policies that are unfavorable to them, including the "Anti-Trust Law." They also use the special characteristics of their own industries (for instance natural monopolies, national security concerns, providing funding for the government, etc) as an excuse to demand preferential treatment from related law and policy makers, and maintained their monopolies.

Thirdly, some private entrepreneurs in a number of industries strive to become people's representatives or CPPCC delegates either by becoming public figures or by other legal means. They use the two political arenas of the NPC and CPPCC to advocate and seek their own interests. They privately hire experts and scholars as independent board directors, and use these people to advocate their causes (the so called "black-mouths"); or they use bribery and other inappropriate means to directly influence administrative decision-making. Following the advent of the central government policy for macro-regulation and control of the real estate industry to curb price increases, some real estate developers immediately joined experts, scholars, research institutes, members of the media, and even officials, to grasp "the microphone" in their industry, form a "chain of opinions," and fight macro-regulation and control.

by reporter Jiang Yong