Organizer: Vivienne Shue, Cornell University
Chair: David Bachman, University of Washington
Polarized Perspectives: American Sinologists on China's Future
Harvey Nelsen, University of South Florida
Two schools of thought have been heavily represented in serious (albeit not always scholarly) literature in the U.S. One group sees China on the verge of greatness, the other sees China on the cusp of collapse. The optimistic camp often begins from the "greater China" scenario. Domestically, economic growth will lead to an enriched populace, greater political freedoms, the emergence of a civil society and ultimately a democratic form of government. Internationally, it will lead to a new but stable regional international order built around China's profound engagement in Asian economics.
The pessimists see China riding a dangerous bubble economy which is about to burst. Ideological bankruptcy of the central government leads to a loss of legitimacy and authority. Beijing's weakness is capitalized upon by newly rich provinces and inter-provincial struggles between haves and have-nots lead to regionalism. In the worst case scenario, regionalism leads to civil war. Beijing's efforts to enhance nationalism as a binding force are defeated by rising ethnic identities and particularism. Internationally, neo-Malthusian scenarios on food and energy consumption lead China into armed conflict with its neighbors.
The paper concludes with an analysis of the strengths and weaknesses of both viewpoints, and offers an alternate scenario. The preferred scenario is based in part on factors ignored by both optimists and pessimists.
The Global Logic of China's Open Policy: Economic Globalization, Regional
Integration in East Asia, and Post-Mao Reform
Thomas Moore, University of Cincinnati
The paper will examine how recent changes in the global organization of economic activity have affected the development challenges facing latecomers like China, with a special emphasis on the spread of transnational manufacturing networks across the economies of East Asia. To place China's experience in regional and global context, the paper will compare China's Open Policy to liberalization in the ASEAN Trio (Indonesia, Malaysia, and Thailand) and reform in other transitional economies (Poland, Czech Republic, Russia).
With this background, the paper will argue that there is a "global logic" to the evolution of the Open Policy, just as other scholars have identified an economic or political logic (Dwight Perkins and Susan Shirk, respectively). While there are limits to international-centered explanations, this paper is meant to represent a neglected perspective. Evidence will be gleaned from a number of substantive issue-areas-including China's foreign trade system, investment laws, and foreign exchange regime-to show that most scholars have seriously underestimated the structuring impact of the international political economy on China's development experience during the Deng era.
At a theoretical level, the paper aims to bridge the "external-internal" gap that exists when studies are formulated solely at either the international level or the domestic level. The goal is to develop a learning/feedback process in which latecomers respond in patterned ways to incentives for change in their foreign trade systems, industrial policies, and development strategies.
Institutional Change and the Modes of State Involvement in China's Foreign
Investment Policies
Szu-chien Yau, Columbia University
Rather than adopting a "market vs. plan" dichotomy or by asking "how much" the Chinese state involves itself in economic affairs, this paper takes state involvement as a given and addresses the variations in the modes of state action in monitoring foreign direct investments (FDI). By comparing China's FDI policies towards different industrial sectors, the paper argues the feasible range of the Chinese state's action is defined by the structure of international economy and the institutional characteristics of the state. International factors set the parameters of state action while domestic political institutions operate as intervening variables which influence both policy preferences and the results of state action. Specifically, this paper finds that the scope and measures of state involvement in China's FDI policies vary across industrial sectors, i.e., the state would assume the roles of producer, promoter, or regulator in different sectors such as telecommunication, automotive, or textile industries. The modes of state involvement are determined not only by the economic logic of a particular industrial sector, but also by the existing institutional environment within which a foreign-invested enterprise is to operate. However, consequences of policy implementation depend on whether the chosen roles would continue to be compatible with both the external and internal context. Incompatibility opens the avenues to changes in institutional arrangement and policy devices, which helps to explain the evolution of China's FDI policies in the course of economic reform.
Implementing Policies of Industrial Finance Toward State-Owned Enterprises in
China's Coastal Cities: A Comparison Between Shanghai and Guangzhou, 1987-1995
Szue-Chin Philip Hsu, University of Denver
Existing studies of contemporary China's central-local relations have focused predominantly on fiscal dimension and presented national pictures as a whole. This paper examines such relations through a more dynamic perspective-policy implementation concerning state-owned enterprises (SOEs), by comparing distinct patterns from various localities in China. In the 1990s, the reinvigoration of China's SOEs which embody the legacy of command economy has virtually become a crucible for the reform program, as well as an increasingly thorny issue in the central and local governments' political and fiscal calculus. In major municipalities where SOEs concentrate, hailing out SOEs and meanwhile extracting financial resources from them for the central and local states' fiscal needs constitutes a grave challenge. Various municipal governments cope with the challenge through different strategies of implementing the central state's policies of industrial finance toward SOEs. Their implementation strategies are largely shaped by: (1) their political and fiscal relationships with the central state; (2) the configuration of SOEs property rights forms in the locality; and (3) in relatively prosperous coastal cities, the availability of alternative sources of fiscal revenues, such as those related to foreign capital. Based on intensive interviews in field research from May to October 1995 and on documentary survey, this paper compares the implementation of policies of industrial finance (including profit-sharing, taxation, and investment/loans) regarding state-owned industrial enterprises in Shanghai and Guangzhou, during the period of contract management responsibility system from 1987 to 1993 and the period of comprehensive tax reform from 1994 until now. By depicting and analyzing the two cities' local fiscal conditions, structures and processes of local administration, performance of local SOEs sector, and relationships with the central government, this paper will attempt to offer theoretical propositions about how local governments' policy implementation in the post-Mao is determined by the specific factors mentioned above.
Beyond Confining Conditions: The Xinhai Revolution, Taiwan's Political Miracle,
and External Factors on Democratization
David J. Longenecker, University of Illinois, Champaign
This paper joins the expanding academic study of external dimensions of domestic regime transition by examining two cases of transition in Chinese polities, seeking how and when (more than if) external factors are relevant. In doing so, this study brings both more historical depth to these questions and suggests in particular a perspective on selected transitions in China during this century.
This paper compares two regime transitions in Chinese polities effectively capping either end of the twentieth century, one beginning with the 1911 revolution in China (1911-27) and the other with the 1986 formation of an opposition party on Taiwan (1986-96). It will succinctly preface and then guide this comparison with a proposed framework, conceptually embedding external factors within a model of domestic transition.
The major themes of this paper are three-fold. First, rather than simply providing "confining conditions," a configuration of external factors is found to provide the central pressures toward the outbreak of each case of transition. External threat, uncertainty over the future international status or identity of the polity, and powerful transnational diffusion effects essentially force open a period of regime transition by deeply undermining regime powerholders while strongly fostering an "entrepreneurial" opposition. Secondly, at some point in each transition, a patron-client relationship with a foreign power critically impacts the regime transition by effectively and substantially enhancing the power of a favored domestic opposition or contending political force. Thirdly, these Chinese transitions are fundamentally similar as regards the impact of external factors.