Author(s):
1. Sebastien Goulard,

Abstract:
China’s economic structures have been transformed since the implementation of the Open-door policy in 1979. Private companies are now allowed to conduct business, however state owned companies have not disappeared, many of them are still partly owned by local governments, this leading to unfair competition with private entrepreneurs. Because of their strong ties with provincial authorities, province-owned companies have great advantages over entrepreneurs, they have larder financial resource and better access to legislation. On the other hand, local governments consider them as important tax resources. However, this system may not be sustainable for local authorities, since province-owned companies affect the rising of local entrepreneurs. This paper looks at the case of competition between entrepreneurs and province-owned companies in the tourism sector in the province of Hainan. Since the early 2000’s, this province has become a successful tourism destination. China’s Council of State has ranked tourism development as the number one priority in Hainan. “Hainan Airlines group” (HNA), the leading province-owned company in Hainan, has helped the island to attract tourism by developing the necessary facilities; But although HNA is implementing governmental policy, the company has its own agenda that may leads to conflict of interest. In a first part, this paper will describe how the province-owned companies are used as the main tool to develop tourism at its first stage. We will then argue that because of its overwhelming character, the province-owned companies can harm the overall objective to make Hainan an international destination. In its last part, this study will show that in the case of Hainan, there will be a need to reform province-owned companies, to make them independent from local authorities. In case of success, this policy could be enlarged to the rest of China, putting an end to the so called “transition” process. The thesis of this paper is that although in a transition area, state intervention through government-owned companies may be considered as an implementation tool, they can weaken development strategies on the long run. In the case of Hainan, province-owned companies intervention leads to conflicts of internets.

Key words:
China, Hainan, tourism, province-owned companies, conflict of interests

Thematic field:
Economic development and problems caused by struct

Date of abstract submission:
06.06.2012.

Number of visits:
429

Conference:
REDETE 2012