Introduction

Abstract

This introductory chapter sets out the book's purpose, which is to demonstrate that China only appears to be a more liberal state, for it has complemented liberalization at the aggregate (macro) level with reregulation at the sectoral (micro) level. Liberalization is often presented as a uniform process; yet the Chinese state has pursued a liberalization two-step. It has shifted from universal controls on foreign direct investment (FDI) and private industry on the aggregate level across all industries to selective controls at the sectoral level. It employs a bifurcated strategy to meet its twin goals of complying with WTO commitments and retaining some control. In strategic sectors—those important to national security and the promotion of economic and technological development—the government centralizes control of industry and strictly manages the level and direction of FDI. In less strategic sectors, the Chinese government relinquishes control over industry, decentralizes decision making to local authorities, and encourages private investment and FDI.