CIAO DATE: 02/2014
Volume: 42, Issue: 4
February 2014
Rebalancing China's Emergent Capitalism: State Power, Economic Liberalization and Social Upgrading (PDF)
Christopher A. McNally, Boy Luthje, Tobias ten Brink
Introduction to Journal of Current Chinese Affairs 4/2013: Rebalancing China's Political Economy
Paradoxes of Prosperity in China's New Capitalism (PDF)
Tobias ten Brink
This article gives a broad characterization of China’s political economy, as well as specific aspects of its socio-economic instabilities. With a focus on China’s export-oriented industry sectors, concepts from comparative and international political economy are applied to show how the Chinese economy can be understood as a variegated form of state-permeated capitalism that at the same time is deeply integrated into world economic processes. The article goes on to portray the socio-economic dynamics, as well as the instabilities of China’s new capitalism, that are at the root of the state leadership’s attempts to turn away from a one-sided model of export and investment-driven growth. Thereby, a number of obstacles are revealed for the “rebalancing” of the economy: a continued dependence on exports, a lack of domestic consumer demand which impedes a significant “social” upgrading, the ongoing low-wage model for which there is no end in sight, the limits of the state’s steering capacity and the weaknesses of its fragmented, competition-driven structure.
Refurbishing State Capitalism: A Policy Analysis of Efforts to Rebalance China's Political Economy (PDF)
Christopher A. McNally
This article provides an analysis of policy initiatives aimed at rebalancing China’s political economy, especially those contained in the twelfth Five-Year Plan and other recent pronouncements. The objective is to generate a conceptual examination of these policy measures, thereby highlighting their basic intent and purpose. The analysis shows that the Chinese leadership intends to pursue policies that can centralize, standardize and regulate the political economy under continued state guidance. Due to the considerable political obstacles that Chinese policy- makers face in rebalancing the political economy, a more state-centric approach is seen as necessary. China is therefore pursuing a policy package of refurbishing state capitalism. While a degree of liberalization is likely to be undertaken, the major thrust is one of revamping, restructuring and, ultimately, strengthening state control and guidance over the political economy.
Asset or Liability? The Role of the Financial System in the Political Economy of China's Rebalancing (PDF)
Julian Gruin
China’s financial system, dominated by the banking sector, has played a central role in the development of an imbalanced trajectory of economic development and growth. As one of the primary mechanisms for implementing decisive macro-economic policy, the banking sector has hitherto served the Chinese growth strategy well in actively allocating capital towards the investment and export sectors, whilst proving capable of managing the macro-economic ramifications of this highly interventionist strategy. However, the role of the financial system in this growth strategy is also rooted in the requirement that authority over financial capital remains closely tied to state institutions and policies, due to elite concern over politico-economic instability. Based on policy analysis and qualitative interviews conducted in mid-2012, the article suggests that whilst the structure of the financial system was conducive to fostering the growth of the real economy, it will hold back not the need for rebalancing, but rather the process of rebalancing itself.
Diverging Trajectories: Economic Rebalancing and Labour Policies in China (PDF)
Boy Luthje
This paper develops a new approach to analyse labour relations at the level of companies, industries, and regions in China. Referring to Western and Chinese labour sociology and industrial relations theory, the author applies the concept of “regimes of production” to the context of China’s emerging capitalism. This article focuses on China’s modern core manufacturing industries (i.e. steel, chemical, auto, electronics, and textile and garment); it explores regimes of production in major corporations and new forms of labour-management cooperation, the growing inequality and fragmentation of labour policies within the modern sectors of the Chinese economy, consequences for further reform regarding labour standards, collective bargaining, and workers’ participation.
Florian Butollo
Based on field studies in the Pearl River Delta (PRD) in 2010 and 2011, specific paths of industrial upgrading in the garment and IT industries are identified. The analysis reveals that there exists a multiplicity of upgrading trajectories, all of which have different implications for skill development and the character of work. While the modernization of industries relies on the input of higher skilled work, primarily in the fields of R&D and marketing, this barely is the case with regard to manufacturing. While labour intensity in the examined cases is diminishing in absolute or relative terms, internal divisions between low-skilled and high-skilled work are reconfigured rather than overcome.
The Local Government in Corporate Restructuring: Case Studies in Fractured Bargaining Relations (PDF)
Kun-Chin Lin, Shaofen Chang
Through two illustrative case studies of enterprise reform in Henan Province, we examine the underlying political contentions behind the changing roles of local government in the process of the corporatization and asset restructuring of state-owned enterprises (SOE) starting in the late 1990s. As SOEs lose their ability to meet the multitude of resource demands from central and local officials, they become sites of inter-governmental conflicts that produce a no-win situation for the SOE and fiscal and social uncertainties for those communities trying to exit the socialist economy. Our first case study is Puyang municipal government, which leveraged its regulatory authority to exact heavy side-payments in return for not obstructing the corporatization of Zhongyuan Oilfield; the second case involves Zhengzhou city officials colluding with provincial bureaucrats and the state-appointed managers of the Yutong Bus Company in an insider privatization that effectively circumvented a specific Ministry of Finance prohibition.