Graduation Year

Fall 2012

Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Minxin Pei

Rights Information

© 2012 Wendy Qian


The problem of rent-seeking in China’s state-owned enterprises has worsened since the rapid increase in infrastructure investment, such as telecom and railway. State-owned enterprise reform in China has given licensing power to officials and executives without sufficient checks and balances. The Chinese government plans to introduce corporate governance structures and encourage private investment for the previously state-dominated industries, such as the railway industry, in the next decade. Yet these formalities cannot eradicate the political problem of corruption. This thesis will examine rent-seeking through the case studies of China Mobile’s former deputy general manager and Communist Party secretary Zhang Chunjiang’s patronage network in the value-added service industry and the Ministry of Railway’s ex-Minister Liu Zhijun’s patronage networks in the high speed railway project. Both central agents committed collective rent-seeking against the will of the principal through their subsidiaries.