Introduction
This bo ok b rings together conceptual and empirical analyses of the causes and consequences of changing businessâgovernment relations in China since the 1990s, against the backdrop of the countryâs increased integration with the global political economy. More specifically, it provides an interdisciplinary account of how the dominant pattern of interactions between state actors , firms and business organizations has changed differently across regions and industries and how the changing varieties of these interactions have causally interacted with the evolution of key economic institutions in China. The basic theoretical premise of the book is that businessâgovernment relations comprise a key linchpin that defines the Chinese political economy and calibrates the character of its constitutive institutional arrangements.
In line with this analytical focus, the book has three different yet interrelated objectives. In the first place, building on the recent comparative political economy literature (Crouch et al. 2009; Hancke et al. 2007; Zhang and Whitley 2013), it develops a typological framework for identifying key dimensions to be included in cross-regional and cross-sectoral comparisons and for establishing the guiding principles for elucidating the diversity of businessâgovernment relations in China. Furthermore, the book advances novel theoretical propositions concerning the primary causes of changes and variations in the organization of state and business actors and in the configuration of power relations and interactions between them. Finally, it explores the causal pathways through which businessâgovernment relations, as a key set of sociopolitical structures and processes, have shaped emergent systems of economic control and coordination across the regional and sectoral levels of analysis.
This introductory chapter sets the general backdrop against which the central analytical objectives of the book are defined and its major contributions to theoretical and policy debates specified. It introduces a typology of businessâgovernment relations, advances the main causal propositions of changes and variations in businessâstate interactions, and explores the impact of such interactions on the emergence of new market institutions. It does so by drawing on, but not confining itself to, empirical evidence presented in individual contributions to the book. The chapter concludes by discussing the organization of the volume.
Key Contributions
By focusing on the above-mentioned three analytical objectives, the book is intended to make a number of contributions to current theoretical and policy debates on the changing nature of businessâgovernment relations and its impact on newly emerging economic institutions in China.
To begin with, existing studies of businessâgovernment relations in China have tended to be narrow in theoretical focus and fragmented in analytical perspectives. Some have shown political acto rs in the state domain as the causal agents of changes in businessâgovernment interactions and portrayed business actors and their organizations largely as passive and subordinate objects of control and co-optation through state corporatist mecha nisms (Alpermann 2006; Dickson 2003, 2008; Foster 2008; Ong 2012; Unger 2008a; Walder 1995, 2003). Others have granted analytical primacy to the growing role of economic actors and firms in structuring relations with the state and emphasized horizontal interactions mediated through market institutions, business associations and social net works as an important defining feature of stateâfirm r elations (Nee 1992; Nee and Opper 2012; Peng 2004; Sun, Wright and Mellahi 2010; Tjosvold et al. 2008; Xin and Pearce 1996). Still others have sought to advance a micro-theory of business and politics that explains the motivation of individual firms to develop connections with various party and governmental entities, the choices they make on tactics and strategies, and the impact of political ties on their performa nce (Du and Girma 2010; Guo et al. 2014; Li et al. 2006; Park and Luo 2001; Peng and Luo 2000).
While these approaches shed important light on the manifestations and consequences of changing businessâgovernment relations in China, they do not exhaust the categories of potential patterns of such relations. They have mainly concentrated on one set of analytical dimensions, largely to the exclusion of others that are constitutive of interactions between the state and businesses. As a result, they have precluded the theoretical possibility of more than one pattern of state âbusiness ties existing in the Chinese political economy. The typological framework to be developed in this book, which focuses on both the authoritative governance of the economy and the market coordination of socioeconomic activities, provides a more encompassing analytical tool for developing a holistic understanding of changing and divergent forms of stateâbusiness relations, as will be shown below. This is particularly relevant, given that the ultimate objective of the book is to illustrate how the interrelationship between state agencies, firms and business organizations has varied across different regions and industries and explain how these regional and sectoral variations have shaped the pattern and trajectory of economic institutional changes in China.
Furthermore, the emphasis of many extant studies has tended to be more on understanding how businessâgovernment relations in China have been changing over time, particularly against the backdrop of the countryâs increased integration with the global economy and continuous market reforms , than on examining how and why such relations have changed differently at the regional or sectoral levels of analysis. To the extent that some studies have explored cross -regional or cross-sectoral variations in stateâbusiness interact ions (see Ernst and Naughton 2008; Huchet and Richet 2002; McNally 2011; Segal 2003; Thun 2006), they have failed to provide a systematic explanation of the sources of these variat ions (the few exceptions include Kennedy 2005 and Tsai 2007). There has yet to be any satisfying account of why economic agents have been more powerful in shaping socioeconomic relations, business associations more autonomous, or stateâfirm relations more cooperative and development-oriented in some regions or industries than in others.
As indicated above, the typological framework that focuses on how authoritative governance and market coordination interact to generate different forms and patterns of stateâbusine ss relations facilitates a comparative analysis of why such relations vary across divergent regional or sectoral sociopolitical environments. In advancing their respective causal propositions, individual contributions to the book explore how the impact of global and market forces on changes in the structure and practice of businessâgovernment ties have been mediated through the region-specific or sector-specific characteristics of ideological orientations, state institutions and market structures. By examining the causes and consequences of changing businessâgovernment relations within a cross-regional and cross-sectoral framework, this book introduces a more dynamic perspective into the study of the Chinese political economy and thus fills an important analytical lacuna in the literature.
Finally, the literatures on businessâgovernment relations in China and on economic institutions and institutional change have, until recently, developed largely in isolation from each other. While there have been scholarly efforts to integrate the analysis of stateâfirm interactions and industrial transforma tions (Breznitz and Murphee 2011; Kennedy 2005; McNally 2008; Segal 2003; Thun 2006), empirical studies on the impact of changing interactions between state and business actors on the emergence of new market institutions have been rare; cross-regional or cross-sectoral analyses of the causal linkage between different forms of businessâgovernment ties and divergent patterns of economic institutional reforms have been even rarer. This book aims to bring together both the temporal and spatial comparisons of how the structure of businessâgovernment relations has varied and of how these variations have exerted shaping influence on the process of institutional changes in China.
A Typology of BusinessâGovernment Relations
This sec tion delineates the defining features of key analytical dimensions that underpin businessâgovernment relations, develops some guiding principles for categorizing and comparing the organization of these dimensions that generates the varied contours of inte...