Regulating China's Industrial Economy

Abstract

This dissertation investigates how the Chinese state governs the business of strategic industries and explains the sources and patterns of the variation in economic regulation. Drawing on the conventional analytic frameworks of regulatory state but, at the same time, challenging their passive treatment of the Communist Party in the study of Chinese political economy, I propose a model of soft and hard regulation to better understand complex patterns of centralized regulatory regime. Taking two strategic industries, the automobile manufacturing and telecom service, as crucial comparative cases, I present three-fold arguments: First, as the model of soft and hard regulation suggests, we need to consider a range of industrial sectors and relax the existing analytic framework that heavily focuses on the independence of the regulator in order to enhance our understanding of the regulatory regime in China's industrial economy. It would be flawed to conclude that the nature of the Chinese state is transformed into a minimalist regulatory state, by overlooking the political control of the party as well as only relying on the conventional analytic frame and empirical sectors for the study of regulatory reform. The party organ is deeply enmeshed in both government and enterprises, and exercises considerable influence on the regulatory control over the leading state firms and sectors. Second, my findings of the centralized regulatory oversight in the auto industry explicitly demonstrate the ways in which the Chinese central government regulates strategic but decentralized industry. It is often invisible and loose compared with centralized strategic sectors. Therefore, this would contribute to further specifying the forms of central control over cases that have a long history of decentralization policies. Third, while existing literature has emphasized highly fragmented authority and bureaucratic struggles as the main political logic, this dissertation study argues that there is a strong central state effort to create a cohesive political power in order to secure crucial state assets, which directly relate to vested interests of the party-state.