Rebalancing the Economy, Refurbishing the State: The Political Economic Logic of Sino-Capitalism in Contemporary China

Abstract

China represents a highly significant case that can inform debates on the nature and logic of capitalism, especially those expressed in the wider Comparative Capitalisms (CC) literature. This is not just because of China’s sheer size and international economic influence, but also because China’s form of capitalism – Sino-capitalism – opens up new avenues for theoretical inquiry in CC. Specifically, Sino-capitalism’s constitution demonstrates the importance of Régulation Theory’s more open and evolutionary approach to understanding CC.Sino-capitalism conceives China’s political economy as driven by the dialectic of top-down state-centric modes of governance interacting with bottom-up networked modes of entrepreneurship based on market competition. This contrasts with the more static comparative approaches in most of the CC literature. In particular, this conception highlights how compensatory institutional complementarities are central to understanding CC. To illustrate Sino-capitalism’s dynamic of reproduction, the article looks at recent policy initiatives that aim to rebalance China’s development model. Even though rebalancing incorporates more forceful economic liberalization, retaining and strengthening state control over crucial areas of socio-economic governance is central. China is therefore pursuing a policy package that seeks to strengthen state governance capacity and market forces in tandem, illuminating the chronic re-composition and rebalancing of institutional spheres via top-down/bottom-up dialectics shaping Sino-capitalism.