global crisis of the 1970s. The latter triggered a global wave of liberalization across a broad spectrum of different political systems. To demonstrate that this also took effect in China, albeit not in the same form as in the Western world, for example, I refer, inter alia, to the role model function of the East Asian developmental states.
Applying the analytical strategy developed as part of my research framework, I use the second section in Chapter 2 to reconstruct the emergence of a variegated state-permeated capitalism from the end of the 1970s to the era of Hu Jintao and Wen Jiabao in the 2000s. First, I analyze the domestic dynamics and outline two distinct phases of the reform of the country’s corporate sectors, of the political system of multilevel governance, of industrial relations, and of the financial system.12
I then extend the analysis to incorporate external factors, including China’s integration into the global capitalist system, the evolution of an export-oriented growth model in coastal regions, the role of the overseas Chinese, and the East Asian economic region, as well as transnational production networks and the overaccumulation of capital in the North. I demonstrate how the Chinese economy benefited considerably from a combination of favorable circumstances and was able to accelerate its catch-up development so much more than other emerging economies.
Chapter 3 focuses on the current lines of development in Chinese capitalism. Although I refer back to various historical events at certain junctures in this chapter, the focus is on the period between 2008 (the start of the momentous global economic slump) and 2016. Following the assumption that my analysis must refer to the role of and interplay between three groups of actors, this chapter is divided into three sections. In the first, I discuss the corporate sector and examine socioeconomic dynamics. On the one hand, I address the issue of unity in diversity, that is, the public-private organization of the economy against the backdrop of heterogeneous business forms and production regimes. On the other hand, I analyze socioeconomic dynamics including the challenges presented by the growth slowdown in the 2010s.
Whether the government leadership has been able to meet these challenges and effect a rebalancing of the economy is the subject of the second section of this chapter. First, I further develop the themes of the state’s steering capacity, distinctive policy cycles, and the prevailing significance of the CCP introduced in Chapter 2. This is all the more relevant given the role that the leadership under Xi Jinping attributes to the party. Second, I highlight the limitations of political steering in competition-driven state-permeated capitalism.
In the third section of Chapter 3, I expand the analysis to include China’s restructured working class and the splintered system of industrial relations. My objective here is to illustrate the tension between the harmonious society proclaimed by the party-state leadership and the imminent limitations of the subjugation of the workers.
In the Conclusion, I summarize the key findings of the study and examine the implications for both political economy and China research.
The present work is an updated version of my book Chinas Kapitalismus: Entstehung, Verlauf, Paradoxien (China’s Capitalism: Emergence, Trajectory, and Paradoxes) published by Campus (Frankfurt am Main, 2013). The latter was awarded a translation prize by the Börsenverein des Deutschen Buchhandels (German Publishers and Booksellers Association) in the “International Humanities” category in 2016.
For the purposes of this translation, the original German book version has been slightly modified and shortened. Although I did not include in any detail theoretical developments in China studies since 2013, I have particularly updated Chapter 3 on China’s current lines of development using newer empirical work and statistical data.
CHAPTER 1
Analyzing China’s Political Economy
In this chapter, I introduce an approach to analyzing China’s political economy on the basis of the current state of the art. I begin with a broad outline of the relevant discourse in China studies and insights, gaps, and desiderata. In the second part of the chapter, I outline my own research framework.
Insights, Gaps, and Desiderata in China Research
This section provides an overview of relevant traditions and discourse in China research over the past few decades. These yield substantive findings but, at the same time, also exhibit gaps and desiderata. Here I focus on studies from the social sciences and only refer in passing to authors in related disciplines.
In Western social sciences, for many years, the debate about the People’s Republic of China (PRC) mostly was part of the analysis of actually existing “socialist” systems. (A concise overview of the historical development of the relevant theories is provided by Stark and Nee 1989; Scharping 1988.) During the early Cold War era, China was primarily analyzed on the basis of theories of totalitarianism, whereas since the 1980s, institutionalist studies shaped the field.1
After World War II, approaches based on theories of totalitarianism dominated. These focused particularly on the communist ideology, on the importance of individual leaders, and on the concentration of power in the Maoist Communist Party (see, for example, Lewis 1963). China was viewed as the antithesis of Western-style liberal democracy. Reflecting this, economists depicted a stark contrast between a decentralized market economy and a centrally planned one. Their objective was to construct a clash of ideologies that was politically expedient during the Cold War era. In slightly simplified terms, the studies frequently culminated in the following elitecentric proposition: equipped with almost absolute power and having eliminated autonomous social spheres, a bureaucracy steered by a party apparatus was able to succeed in controlling Chinese society as it saw fit. However, because these assumptions threatened to hypostasize the one-party rule into a stable unchallenged regime and, to a large extent, ignored the CCP’s internal conflicts or social resistance, the hypotheses based on theories of totalitarianism tended to draw rather inaccurate conclusions (for a critical account, see Dreyer 1996, 7–21; see also Shue 1988; Walder 1986).2
In the 1980s, institutionalist approaches took on a certain appeal.3 These theories, which are in contrast to efficiency theory schemata, increasingly took recourse to the institutional contexts of political or economic behavior. In state socialist systems, change was found to be driven by forces beyond the control of the state. The focus here was on examining the charged relationship between state and society. The objective was to be able to define political conflicts and socioeconomic development trends (Xie 1993) or, for example, to pinpoint internal corporate negotiation processes in “communist” enterprises (Walder 1986) by refining overly simplified assumptions of the existence of fixed corporate despotism. Action taken by the state is thus seen within the context of state/society relations in order to shift the focus more toward the processes and conflicts that are inherent in state action (Derichs and Heberer 2008). Accordingly, China can be examined using similar instruments to those that have long since been widely applied to the analysis of Western societies or countries of the Global South.
From the 1990s to date, many different authors have published empirical studies that, in one form or other, picked up on these traditions. Also presented here are certain discourses that were instrumental in providing important insights but also exposed unresolved problems in research on China.
From Command to Market Economy: Discourses in Transformation Research
The
