This chapter begins the empirical examination of the second political service provided by firms: societal control. I situate this political service within China’s solid waste treatment sector, where the development of waste incineration plants has consistently faced public opposition and protests. Drawing on original data from all 351 incineration plants built or under construction in Chinese cities between 1999 and 2016, as well as records of protests against these plants, I demonstrate a strong relationship between protests and firm ownership in this sector. During the bidding stage for waste treatment contracts, local governments factor in societal control when selecting firms to build and operate these plants. If local governments anticipate employing appeasement strategies toward protesters, private firms are more likely to thrive in a city. Conversely, if governments expect to rely on suppression strategies, state-owned enterprises tend to dominate.

Even in the most mundane sectors, firms are still required to provide political services. This chapter examines how the urban bus sector across Chinese cities became a focal point for visibility projects starting in the early 2000s and how this trend led to an uncoordinated, nationwide deprivatization of the urban bus sector by city governments beginning in 2005. These actions contradicted policies that encouraged private provision of bus services.

Using an original dataset on visibility projects and sectoral data from 288 Chinese cities covering the urban bus sector between 1996 and 2016, the chapter demonstrates how successive waves of visibility projects were closely linked to the reversal of marketization in the sector. The chapter opens with an account from a city government official describing their efforts to force private firms out of the urban bus sector, and is enriched with detailed interview notes throughout.

A common yet often overlooked political service provided by companies is funding authoritarian officials’ visibility projects – the key concept in this chapter. In the absence of elections, authoritarian officials often demonstrate their competence and loyalty to leaders by initiating ambitious, large-scale infrastructure or public projects. These projects prioritize appearance and scale over practicality, cost-effectiveness, and sustainability, as they are designed to enhance the officials’ political visibility in the system and career prospects. This chapter defines this concept and identifies the conditions under which visibility projects arise within a sector. It offers numerous real-world examples of visibility projects, including wastewater treatment plants, industrial parks, desertification control efforts, and programs such as “Grain for Green,” among others. It traces the emergence of visibility projects to flawed authoritarian personnel management systems that emphasize both competence and loyalty.

Owing to their scale and wasteful nature, government officials often solicit contributions from firms to launch visibility projects. Private firms, however, are at a disadvantage compared with state-owned enterprises, given their more limited financial resources. Consequently, visibility projects are often associated with the decline of private firms within a sector.

In this concluding chapter, I argue that the authoritarian state in China can only make “somewhat credible” commitments to capital, as it cannot and will not fully restrain itself from politicizing business. Embedded in China’s political-economic model, the politicization of business undermines investor confidence owing to the unpredictability of state demands for political services, both in their occurrence and costs.

As an additional layer of firm competition, private firms – despite often excelling in efficiency and quality compared with state-owned enterprises – face inherent disadvantages in providing political services owing to their hard budget constraints and limited political capital. Consequently, the politicization of business undermines China’s long-term ability to attract private investment and further distorts its economic model, shifting it even more toward a state-led framework.

This book also offers insights into China’s prospects for sustainable development. By examining sectors key to sustainability, it reveals a critical mismatch between China’s stated goals of sustainable development and its current methods. Without embedding long-term objectives into the incentive structures for government officials, visibility projects and state–business collusion in critical sectors are likely to persist. This misalignment could hinder China’s transition from a model of growth at all costs to one centered on sustainable development.