In China, local state actors and local public-private alliances almost act as breeding grounds for the development of productive forces. Thus the “private” owner should not be identified as the only capitalist actor. It is not only individuals or a joint-stock company comprising one or more persons, but rather also state functionaries or authorities, particularly at the local level, who can operate as exclusive controlling owners. Alongside the classic private property, there are other forms of exclusive ownership, including state-owned enterprises (SOEs). The main characteristic of property in capitalism is the separation of those who operate the means of production in exchange for a wage from the control of this means of production. Referring exclusively to the (politically defined) legal position of ownership can distract from this fact (Tamás 2007). Some authors link capitalism and private property too closely, resulting in them positioning state sectors in modern national economies outside the capitalist system (Y. Huang 2008). In the case of China, an analysis that examines state property and state action more generally against the backdrop of the power of the drivers of capitalism would seem more fitting. Thus, in the context of China, McNally speaks of “state capitalism” (McNally 2011), Nan Lin describes China as “centrally managed capitalism” (N. Lin 2011), Jessop uses the term “coordinated market state capitalism” (Jessop 2009, 18), Fligstein and Zhang see similarities with the French “dirigism” model (Fligstein and Zhang 2011, 51–52; see also Pearson 2011, who also includes a comparison with Brazil), and a short time ago, I myself referred to a “liberal market state capitalism” (ten Brink 2010; see also Nee 2005; Nee and Opper 2007; Redding and Witt 2007; Kennedy 2011a).
THE INTER- AND TRANSNATIONAL INTEGRATION OF CAPITALIST SYSTEMS
The fifth dimension of capitalism in time and space is the integration of individual capitalist orders into global economic, international political, and other intersocietal relationships. In order to take this dimension into account, an analysis is required that explores the interaction of national, international, and transnational processes. This particularly applies to the analysis of economic instabilities and crises, the trajectories of which must ultimately also be examined in the context of the development of capitalism worldwide. Analyzing the changes in China in terms of their connection with transnational capitalist dynamics thus prevents a Sinocentric bias (Hart-Landsberg and Burkett 2006; Hamilton 2006a).
Here, as mentioned above, I follow newer concepts that refer to a variegated global capitalism. Varieties of capitalism cannot be effectively analyzed solely on the basis of methodological nationalism and using comparative statistics but rather should be seen as facets of a global capitalist socialization. This allows us to consider varying trajectories of capitalist development in an international, and by extension, intersocietal context (Rosenberg 2006; ten Brink 2012b). Unlike the global economic development phase following the major crisis in the 1930s—in which there was a balance between internationalization and nationalization tendencies—it must be assumed here that, since the 1970s, inter- and transnational integration has gained ground. The question then arises to what extent this has affected the development of China, a country that has a (potentially) extremely large domestic market and a government that, for a long time, had an interest in restricting or steering international influences.
Interim Conclusion
Finally, I will now reiterate the key points shaping the analysis that constitutes the main part of the present work. The following analytical strategy can be formulated to address the three key research questions: (1) the predominant features of China’s political economy, (2) the fundamental driving forces and dynamics of the reform process and the subsequent rapid growth, and (3) the current lines of development and paradoxes inherent in the growth path.
First, I have integrated drivers of capitalist development into my research framework. In the following, I will examine to what extent these driving forces came into play in China, and in what way, and to what extent they contributed and still contribute to the country’s modernization. Here, the analysis of links between state, economy, and other societal actors aims not only to provide insights into the structure of China’s political economy but also explanations for the relative consistency of the political status quo and indications of its potential for destabilization. I expect to identify plausible explanations by incorporating an analysis of close alliances between companies and government bodies as well as of the segmentation, segregation, and subordination of the working population.
My objective here is for my analysis to have a transnational focus because varieties of capitalist development do not unfold counter to the global market but rather with and within it. In other words, the trajectory of reform in China’s history can be adequately and convincingly described only by taking into account its integration in inter- and transnational processes, not least because the PRC was able to profit more than any other large country from favorable global economic circumstances.
Second, the strong assumption of universally applicable drivers of capitalism (manifested differently during different historical phases) has been relativized using approaches from action theory. My research framework has, to all intents and purposes, been historicized: capitalist dynamics in China encountered and continue to encounter preexisting social arenas and sociocultural traditions that lend the country’s political economy a distinctive form. These factors are studied in the main body of the present work and integrated into the notion of interrelated types of capitalist-driven modernization. With a view to the conflictual interplay characterized by power imbalances between the three key groups of actors (entrepreneurs, state actors, and workers), I will describe the dynamics and paradoxes of Chinese development.
Third, on the basis of these key assumptions, I have introduced a series of tools that serve the further analyses. In an attempt to gain an insight into the effectiveness of capitalist driving forces in specific institutions, I combine political economy analyses on the dynamic and crisis-ridden expansion of markets with empirical findings from China studies. This enables me to identify different and, in some cases, distinctive forms of politically integrated entrepreneurship, of competition also occurring in noneconomic institutions, and socioeconomic development trends. At the same time, going beyond a one-sided (neo-)Schumpeterian understanding of the individual entrepreneur’s capacity for innovation, I refer to underlying institutional and organizational conditions provided, inter alia, by the government.
The distinction between five different dimensions of capitalist systems is also useful for a systematic study of the drivers of capitalism in China. With regard to the five dimensions listed—the sphere of the “horizontal” competitive relationships between companies, the “vertical” axis of industrial relations, the interactions between economic and political actors, the financial system, and, finally, the sphere of transnational integration—I will seek to establish whether and how capitalist dynamics emerged at these levels in China and play a dominant role. I will also explore possible complementarities between these spheres and cross effects between institutions that improve economic efficiency.
The tools for examining gradual institutional change serve in particular to provide us with an insight into the significance of informal institutions and negotiation processes in China, the reforms of the party-state, and the phenomenon of circumventing formal regulations (for instance, with regard to comprehensive enterprise reforms).
The assumption of unequal and heterogenous, combined and interlinked developments in capitalist-driven modernization processes is useful for examining unstable dynamics in China. An attempt will be made to substantiate the idea that heterogeneous production regimes, business types, and state policies were not only beneficial for economic development but simultaneously triggered unintended, paradoxical consequences.
Findings from state theory prove invaluable in my analysis of political reform strategies in China’s multilevel system of governance and to explain the adaptive capacity of the party-state, and limitations of political steering. It is thus possible to distinguish between various forms of state intervention and regulation, for instance, market-creating, market-regulating, and market-restricting measures. In addition, based