Global-market building as state building: China’s entry into the WTO and market reforms of China’s tobacco industry

Abstract

This article analyzes how China’s increasing engagement in the global market induced significant institution-building in China’s tobacco industry and enabled a power shift from the local authorities to the central authority in controlling this market. During this process of “getting onto the international track,” the central government reorganized the industrial tobacco system and broke up the “monopolies” set up by local governments in order to enhance the competitive capacities of China’s tobacco industry in the global market. Given such a concrete institutional change in China’s tobacco industry, I propose the theory of “global-market building as state building” to explain the interactions among the global market, the nation-states, and the domestic market-building projects. I suggest that nation-states strategically seek to engage themselves in the global market and that, under certain circumstances by taking advantage of their global market engagement, the nation-states can enhance their abilities to govern the domestic market.