Formal and Informal Patterns of Coordination
New Horizons in Institutional and Evolutionary Economics series
Edited by Werner Pascha, Cornelia Storz and Markus Taube
Chapter 9: Patterns of Distinctive Institutional Change in Chinese Capitalism
Tobias ten Brink 9.1 INTRODUCTION This chapter attempts to illustrate two things. Firstly, it argues that it is useful to perceive the nature of the Chinese system as a distinctive form of market-liberal state capitalism. Secondly, it asserts that an appreciation of the general characteristics of Chinese capitalism helps in understanding gradual institutional change in the corporate sector. On the basis of the phenomena of ‘wearing a red hat’ and ‘red capitalist’, it is shown that the closely interwoven relationship between party, state(s) and companies makes for a distinct variant of capitalism, in which continuity and change coexist. Theoretically, the chapter aims at combining traditional research on China with comparative political economy and new approaches in political science for the analysis of gradual institutional change. 9.2 MARKET-LIBERAL STATE CAPITALISM IN CHINA The Chinese system is marked by the hitherto unknown transformation from a planned economy to a strongly market oriented system which at the same time exhibits a degree of continuity in its political and social institutions. Research into China has for some time now focused on this aspect of restructuring that is both path dependent and path shaping (cf. McMillan and Naughton 1996; McNally 2007; Tsai 2007). In China, institutional change did not lead to the radical replacement of one institutional arrangement with another, but to new combinations and layering that brought about significant processes of institutional conversion. The Chinese model will for the foreseeable future bear the traces inherited from a bureaucratic planned economy, a ruling communist...
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