Abstract
In characterizing Chinese political economy, efforts to decipher the China Model have consumed much scholarly attention. Driven by a search for development with Chinese characteristics and its contrast with liberal market economies, the China Model argument clarifies as much as it obscures. In China’s Capitalism, ten Brink departs from the China Model debate by situating China’s economic reform in a historical trajectory of capital accumulation and treating it as a particular form within a universe of variegated capitalisms. Following a comprehensive identification of the key features of Chinese economy and a thorough probing into its driving forces and paradoxes, ten Brink submits that China engages in a “competition-driven form of state-permeated capitalism with a heterogenous internal structure” that has delivered dynamic growth and also sowed its own seeds of instability. China’s Capitalism conceives China’s late development as a project to pursue modernity, for which capitalism is a mere instrument. This analytical framework throws into sharp relief the mechanisms of China’s economic growth that conventional explanations tend to downplay. One of the most important mechanisms, as ten Brink explains, is competition. Competitive dynamics not only regulate inter-firm relationships, but more intriguingly is widely observable between Chinese regions for growth and markets, and among party-state decisionmakers for authority and performance. Promoting competition also underlies the motivation of many state regulations. This observation, among many throughout the book, showcases the author’s insistence on debunking the myth of state/market dichotomy.
Yet, competition never occurs on a leveled playing field; they never do in capitalist developments, as ten Brink indicates. This point brings us to the second mechanism of growth: uneven development. In the Chinese case, heterogeneity in production regimes leads to not only stratified competition but also interstitial opportunities for business to exploit gaps between institutions and geographic regions, and to collaborate across different forms of ownerships. For example, unequal production conditions and wage systems across China enhance the power of mobile capital and open doors to exploitation. Heterogeneous business forms foster partnerships between private and state-owned firms that contribute to such arrangements with different types of endowments and rents. In addition to competition and uneven development, the book also elucidates other mechanisms including favorable international circumstances and the utilization of trust-based relationships for productive purposes in explaining China’s growth. Taken together, the book seeks to offer a comprehensive explanation while also attending to the interconnection among different mechanisms at play.
The book has many innovative strengths. One source of innovation stems from the author’s attempt to use the analytical frameworks of Comparative Political Economy (CPE) and International Political Economy (IPE) to shed light on Chinese political economy. This line of effort to “internationalize” the Chinese case is consistent with the author’s definition of Chinese economy as one particular form of capitalism, thus rendering it comparable to other capitalist types and suitable for engaging with concepts and perspectives offered by the literature of CPE and IPE. In particular, I find two perspectives that the author applies consistently throughout the book especially constructive for understanding the inner working of China’s capitalism: one is coordination, the other corporatism. Resembling coordinated economies such as the Japanese and German ones, the Chinese economy can be also understood as a system of coordination that bind economic, political and social actors to each other. The central mechanism of economic coordination, as ten Brink argues, is public–private alliance. The existence of sprawling public–private networks in the Chinese economy is predicated on, first, the active role of the Chinese state, especially local authorities, in directly participating in market activities, and second, the extensive existence of state-owned business entities and parastatal organizations that connect business and government. Such networks are built, as much on formal public–private business partnership and governance structures, as on interpersonal and informal alliance between government officials and private businesspeople. This array of intuitional spanning networks is doubtlessly prone to corruption. Yet, as ten Brink points out, they also excel at assembling the variegated types of resources and channeling the otherwise unwieldly heterogenous production regimes to a shared commitment to development, that is, holding together the “diversity in unity” in China’s mixed economy. Likewise, the idea of corporatism, a concept not as worked out as the one of coordination, is nevertheless generative for unpacking the institutions of the Chinese economy as well. Here ten Brink dissects the Chinese economy on the basis of its corporate actors: the central government, local governments, business, labor unions, and workers come to balance each other out, in both instances of lawmaking and conflict resolutions, for maintaining the current growth regime. To this end, workers’ interests invariably give away to the priority of growth. Yet, the accumulation of protest and bargaining experiences on behalf of the workers, coupled with more aggressive efforts from the official union to represent the interest of labor, all occurring in the context of rising labor cost, lead ten Brink to argues that China is experiencing a transition from state corporatism to social corporatism that allows more room for inclusivity and balanced development. The obvious missing block, as far as the comparisons with classical corporatist models is concerned, is the lack of self-presentational power of the workforces, which essentially sets the limit to this transition. Through such anchoring concepts as coordination and corporatism highlighted above, China’s Capitalism is well equipped to analyze the complex makeup of China’s economy and ask hard questions as to how each piece of institutions is linked together.
As its subtitle indicates, the book seeks to offer its own share of answers to the oft-asked question: Is China’s economic development sustainable? Ten Brink’s response centers around explicating the “paradoxes” in China’s economic institutions: crucial mechanisms responsible for growth, if carried too far, would undermine their own sustainability. Social inequality, related to growth-enhancing institutions such as the heterogeneous production regimes and “incomplete corporatism,” for example, does not bode well for stimulating domestic demands as China looks to pivot its engine of growth from export to domestic consumption. Likewise, the decentralization of political governance not only unleashes local investment drives but also indulges overinvestment and results in overcapacity. Similarly, local growth alliances between government and the business sector are essential mechanisms of coordination. Yet, they also limit and even paralyze the steering capacity of the central government when macro-level coordination is needed. As a result, central politicians are compelled to resort to drastic political means, such as anti-corruption measures, for controlling their local agents, which actions in turn risk dispersing local growth alliance and depressing growth momentum. Therefore, energizing institutions are also paradoxical forces of destabilization, a phenomenon which underlines the author’s insightful interpretation of “dynamism.”
While comprehensive and revealing, the book also contains a weak point. The book thrives on the ambition to bring different strands of theories of political economy to bear on the Chinese case. Yet, it also tries to do too much at once and burdens the empirical narrative that falls short of talking back to the comparative theories. The author is more effective at using analytical frameworks from Comparative Political Economy to explain the working of Chinese economy than to draw the difference of Chinese political economy from other capitalist variants. The comparative insight is well gestured, yet, underrealized. Seen in an optimistic light, since China’s Capitalism is already a giant step taken by the author toward rendering the Chinese case comparable, these underrealized opportunities can be seen as an invitation from this groundbreaking book for more work dedicated to placing China in conversation with theories of political economy and with “varieties of capitalism.”
Overall, ten Brink has written an exceptionally comprehensive and perceptive book, useful for scholars, policymakers, and readers who are interested in jumping-start their knowledge about the Chinese political economy and for China scholars who look to deepen their understanding of China’s economic reform in an institutionalist lens. The book will be a valuable addition to reading lists for courses on China, International Political Economy, Comparative Political Economy, and International Sociology.