After more than a decade in which private companies have been the prime engine of China’s economic miracle, the Chinese government is eager to control more of that wealth — even if that means running roughshod over private companies.

Chen Zhiwu, a professor of finance at Yale University and a harsh critic of the state’s dominant role in the economy, says the Chinese government is smothering the private sector. “When the government is involved in business, it’s hard for private companies to compete,” Professor Chen said.

The usurping of private enterprise has become so evident that the Chinese have given it a nickname: guojin mintui. That roughly translates as “while the state advances, the privates retreat.”

Some prominent Chinese economists are warning that the potentially corrosive effects of an approach that favors government companies at the expense of the private sector could eventually stifle innovation, saying it could stunt China’s long-term growth and quash the rising aspirations of the nation’s 1.3 billion people.

“If China doesn’t deal with this problem and strengthen the private sector, this country’s growth is not sustainable,” said Xu Chenggang, a professor of economics at the University of Hong Kong.

Hilead executives declined to comment for this article. A Chinese Academy of Sciences spokesman would say only that the lawsuit against Cathay was meant to protect his organization’s “rights and benefits.”

What is clear is that Hilead, with all its government support, has been able to slash prices. Cathay has had no choice but to do likewise, costing the company as much as $10 million in profit over the last year, a drop of at least 20 percent.