AAS Annual Meeting

China and Inner Asia Session 307

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Session 307: Beyond the Middle Kingdom: China’s Political Economy in Comparative Perspective

Organizer: Scott Kennedy, CSIS, USA

Discussant: Kevin J. O'Brien, University of California, Berkeley, USA

This panel focuses on systematically examining China’s political economy through several comparative lenses. The great majority of research on China to date has been single-country studies, which is the result of methodological demands of studying China and a sense of the country’s distinctiveness due to China’s grand size and long history. China specialists are now more committed to theory building, but they primarily use several strategies that do not require cross-country comparisons, including treating China as a case to measure against existing theories, dividing China by region or sector to consider variation within the country, and analyzing data on multiple Chinese individuals or organizations. Limited cross-national comparative analysis means that many China specialists have left unused an important tool in their analytical toolkit, with negative repercussions for our understanding the politics of China and other countries. This panel will demonstrate that systematically comparing China with other countries puts the People’s Republic in a light not available through other approaches, and thus, provides a chance to consider political theories by including an important case too often left out of studies. The papers will engage in small-n comparisons involving a wide range of countries, including France, Russia, Japan, South Korea, Indonesia, India, Brazil, and South Africa. Cross-national comparisons are applied to two broad sets of topics. The first is China’s economic policy and performance, the latter the emergence of interest groups in an authoritarian setting. Each presenter will draw on primary and secondary data from China and the other countries.

Crossing the River by Feeling for Stones or Carried Across by the Current? The Transformation of the Chinese and Russian Automotive Sectors
Andrew H. Wedeman, Georgia State University, USA

This paper focuses on how local-state intervention in the economy is shaped by the nature of countries’ patterns of inter-regional competition. The tracing of the evolution of the Chinese and Russian auto sectors highlights a non-linear process with unexpected positive consequences in China and negative implications for the neighbor to the north. The nature of central-local relations in China pushed local officials and automakers to progressively shift from pursuing rent-seeking opportunities to promoting more efficient producers that compete in national markets. By contrast, Russia’s chaotic market environment has left auto firms pursuing short-term opportunities that have left them all inefficient and uncompetitive.

Chinese Welfare Policy and the Politics of Uneven Development
Mark W. Frazier, New School, USA

This paper focuses on the pathways of welfare policy in China and a set of cases labeled as “large uneven developers,” states with rapid growth and high inequality. While much attention has been given to welfare policy trajectories in the “varieties of capitalism” literature covering Western Europe, North America, and Japan, such comparative discussions rarely if ever try to place China’s experience in the context of existing theories and explanations for how different patterns of welfare policies evolve across market economies. Frazier compares China’s efforts to create a welfare safety net with those found in earlier periods of Brazil and South Africa, and in more recent decades in India and Indonesia. He finds that no single factor, whether regime type, level of industrialization, or the power of labor interests, individually explains the evolution of welfare policy among these large uneven developers. His account stresses to a greater extent the ability of ruling coalitions to maintain relatively narrow, exclusive welfare coverage to favored constituencies, at the expense of the rural sector and labor market outsiders. He concludes that China looks less like its East Asian neighbors and more like other “large uneven developers” around the globe.

Fragmented Influence: Business Lobbying in China in Comparative Perspective
Scott Kennedy, CSIS, USA

As China has embraced capitalism and shifted its regulatory structures, companies are increasingly interested in shaping economic regulations to suit their interests. Although we have some sense of this new trend, we still lack a clear understanding of how lobbying in China compares with such behavior elsewhere. This paper compares patterns of business lobbying on national economic policy in China, Japan, India, and Russia, finding unexpected similarities and differences across the cases. Using both qualitative and quantitative data, the discussion compares the evolution of business associations and direct lobbying, relying on both case materials and survey data. The analysis demonstrates that both domestic political institutions and economic contexts shape the evolution of business associations, direct lobbying strategies, and the composition of policy coalitions.

Comparing China’s Capitalists: Neither Democratic Nor Exceptional
Kellee S. Tsai, Hong Kong University of Science & Technology, USA

Tsai focuses on the interaction between China’s private entrepreneurs and officialdom, particularly at the local level. Drawing on a wide range of cases from Asia, Latin America, and elsewhere, this paper shows that their behavior shares much in common with businesspeople in many other authoritarian capitalist countries. As in other countries, Chinese entrepreneurs are not proto-democrats, but they have developed a variety of coping mechanisms, what can be called “adaptive informal institutions,” that have still led to enduring, even if less noticed, changes in how business and officialdom interact on a regular basis. The paper utilizes primary qualitative and quantitiative data from China, including recent survey results, and compares and contrasts this information in the context of a wide range of countries through secondary sources.

When Are Banks Sold to Foreigners? An Examination of the Politics of Selling Banks in Mexico, Korea, and China
Victor Shih, University of California, San Diego, USA

Drawing on comparisons with Mexico and South Korea, Shih applies an interest-group argument to explain why China has not granted foreign banks majority stakes in domestic banks. He suggests that a combination of the power of domestic private financial interests and the concentration of their ownership over domestic banks explain the divergent outcomes between China, Mexico, and South Korea. In Mexico, domestic private conglomerate's political clout and their concentrated ownership of banks gave them the resources and incentive to persuade the state to permit the sales to foreigners. Although Korean conglomerates are powerful, their ownership of banks is not concentrated, which means they have fewer incentive to influence state policies in order to capitalize on bank sales to foreign entities. Instead, they lobby the state to repair the banks so that they can continue to provide preferential financing to domestic conglomerates. Finally, private financial interests barely exist in China, and the government strongly prefers to maintain control over banks so that they can continue to finance state objectives.