Manipulating Globalization: The Influence of Bureaucrats on Business in China

Since the turn of the century, China has been the world’s workshop – it is the largest producer and exporter of goods, and the largest recipient of foreign direct investment (FDI) among developing countries. However, just twenty and thirty years prior to that, China was politically and economically repressed, relying on the Soviet Union’s for security and commercial stability. So what explains the sudden economic boom?

Ling Chen, Assistant Professor at the School of Advanced International Studies (SAIS) at Johns Hopkins University, notes that the Chinese leadership has considered innovation to be the core of China’s national competitiveness and the backbone of China’s rise. However, she attempts to explain China’s globalization and ascension as one of the world’s most important economic powerhouses through micro-level provincial dynamics, emphasizing relationships between local Chinese bureaucrats and enterprises working within China. 

Chen examines the patron-client relationship that emerges from bureaucrats and company officials. These “coalitions” cultivate the shared interests of bureaucrats and clients within a given city and challenge the local government’s support of industry. Chen’s talk today looked at the cases of Suzhou and Shenzhen, which are two of the eight coastal cities considered in her research as a whole. In Suzhou, a “top-down” city, coalitions tended to be stronger and bureaucrats protected against the full monopolization of the value chain by foreign firms. In Shenzhen, a “bottom-up city,” there were more opportunity for domestic Chinese firms to consolidate.

Chen concluded claiming that globalization has instilled new dynamics at the local level through bureaucratic coalitions, and these effects are particularly different than other structural effects. This means that the strength of a bureaucratic coalition, in Chen’s view, has a stronger challenge on local manufacturing globalization. Furthermore, the top-down strategies of globalization that may have worked for other East Asian countries may not work in a more complicated economic environment like China, thus emphasizing the importance of the role that local bureaucrats play in shaping the Chinese economic landscape.

Chen’s talk today came from her new book, Manipulating Globalization: The Influence of Bureaucrats on Business in China, which was recently published by Stanford University press. You can learn more about her work hereand buy a copy of her book here.

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