Private enterprise development in a one-party autocratic state: The case of Alibaba Group in China's e-commerce

Abstract

This study attempts to explain China’s industrial development with special reference to e-commerce. It argues that in a one-party autocratic regime such as China, the collaboration between government officials and private entrepreneurs in strategic industries can promote industrial growth. Since Internet can jeopardize communist party’s goal of maintaining cohesiveness and absolute political power, the Chinese government has imposed surveillance on private operation in all IT operations. Specifically, in e-commerce industry, through collaborations with private enterprises, the communist party can “kill two birds in one arrow.” On the one hand, party members are able to preserve national security and maintain social and financial stability by closely monitoring the private enterprise operation. Moreover, party members can seize tangible and non-tangible benefits from the growth in e-commerce firms. On the other hand, private e-commerce enterprises, by building close connection with public officials and senior party members, can obtain strong support from the government, and thus boosting its business growth. This argument is applied to explain the miraculous growth of Alibaba Group, a private e-commerce enterprise in China. In particular, the paper attempts to show the relationship between the Chinese government and the private entrepreneur in the e-business development and how their collaboration enhances growth in the Internet market.