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A worker at a steel plant in Dalian, China. Photo: VCG via Getty Images

For the past several decades, China has been governed by a dual system: political authoritarianism combined with economic entrepreneurship. Private-owned and foreign firms have helped drive economic growth, while accommodating, and even resisting, political influence. Formerly limited by the central government, they later flourished with the support of local bureaucrats.

Amid the current economic slowdown, the central government has used tax incentives and other benefits to co-opt private entrepreneurs into the Communist party. They have also aimed to attract foreign investment to development zones and free trade zones, especially in high-value sectors like information technology, clean energy and machinery.

Instead of relying on local initiatives, these measures are mostly top-down. Local bureaucrats now exercise more caution in promoting economic activities, in part to avoid becoming targets of anti-corruption campaigns.

What's next: Centralization would upset the fragile balance and sustainability of China's economic model. Compared to local bureaucrats, Beijing is less likely to make policies that suit the millions of varied non-public firms across the country and risks undermining valuable entrepreneurship.

Ling Chen is an assistant professor at John Hopkins School of Advanced International Studies and the author of "Manipulating Globalization: The Influence of Bureaucrats on Business in China."

Go deeper

Lawmakers call for Israel-Hamas ceasefire amid aerial bombardments

Combination images of Republican Sen. Todd Young and Democratic Sen. Chris Murphy. Photo: Michael Reynolds-Pool/Getty Images/Greg Nash-Pool/Getty Images

Sen. Todd Young (R-Ind.) and 28 Senate Democrats on Sunday called for a ceasefire between Israel and Hamas as fighting continued into the night.

Driving the news: In the first bipartisan call for a ceasefire, Young, a ranking member of the U.S. Senate Foreign Relations Subcommittee on Near East, South Asia, Central Asia and Counterterrorism, joined its Chair Chris Murphy (D-Conn.) a statement saying: "Israel has the right to defend itself from Hamas' rocket attacks, in a manner proportionate with the threat its citizens are facing.

Bill Gates faces scrutiny over relationship with Microsoft employee, Epstein ties

Photo: Alessandro Di Ciommo/NurPhoto via Getty Images

Representatives for Bill Gates pushed back on claims Sunday that he left Microsoft's board because of an earlier sexual relationship and against two other reports detailing more extensive ties with Jeffrey Epstein than had previously been reported.

Driving the news: Microsoft said in an emailed statement to Axios that it "received a concern" in 2019 that its co-founder "sought to initiate an intimate relationship with a company employee in the year 2000," but denied a Wall Street Journal report that its board members thought Gates should resign over the matter.

AT&T in talks with Discovery to combine media assets

Illustration: Annelise Capossela/Axios

AT&T is in talks with media giant Discovery about merging its media assets, like CNN, TBS and TNT, according to two sources familiar with the discussions.

Why it matters: A potential merger could allow AT&T and Discovery to better compete with entertainment giants like Disney and Netflix in the video streaming wars.