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Business, Government and Economic Institutions in China pp 195–221Cite as

Palgrave Macmillan

International Context and China’s Business–Government Relations

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Part of the book series: International Political Economy Series ((IPES))

Abstract

The chapter investigates China’s government–business relations in an international context. In general, it argues that since China was incorporated into the European international system in the mid-nineteenth century, the motive of survival and competition has gradually come to dominate the political practices of the Chinese elites, and this is especially the case after 1949 when an autonomous state was finally created. Furthermore, a particular international context often induces a corresponding state reaction. The Cold War structure and conditions of late development pressed the Chinese state to centralize its power and engage in forceful industrialization through a central planning system. This then created an extreme form of government–business relations, with overwhelming power residing with the former. Later on, after China moved closer to the United States in terms of world politics, and when the Cold War structure was replaced by a multi-polar structure characterized by American hegemony, coinciding with rapid expansion of the world market, the Chinese state engaged in economic liberalization and decentralization. This resulted in a substantial modification of the power balance between the state and business and gave rise to various forms of government–business relations.

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Notes

  1. 1.

    There has been renewed academic and government interest in planning. See, for instance, a special issue on Development “Planning” in Present-Day China—System, Process, and Mechanism, Modern China, 39(6), November 2013.

  2. 2.

    “Paid-in capital” refers to capital received from investors when the business is registered, and it shows the nature of the ownership when the business starts. Legal entities’ capital in simple term is a mixture of individual and state capital.

  3. 3.

    Value added tax generated from manufacture business is the largest source of local revenues.

  4. 4.

    For example, see the special-issue discussion on state capacity building in China, Public Administration and Development 29, 2009.

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  1. Institute for Advanced Study in Humanities and Social Sciences, Zhejiang University, Hangzhou, China

    Tianbiao Zhu

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  1. Alliance Manchester Business School, University of Manchester, Manchester, United Kingdom

    Xiaoke Zhang

  2. Institute for Advanced Study in Humanities and Social Sciences, Zhejiang University, Hangzhou, Zhejiang, China

    Tianbiao Zhu

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Zhu, T. (2018). International Context and China’s Business–Government Relations. In: Zhang, X., Zhu, T. (eds) Business, Government and Economic Institutions in China. International Political Economy Series. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-64486-8_7

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