China's 'New Regionalism': Subnational Analysis in Chinese Political Economy

Meg  Rithmire

Article | World Politics | January 2014

China's 'New Regionalism': Subnational Analysis in Chinese Political Economy

Abstract

The study of Chinese political economy has undergone a sea change since the late 1990s; instead of debating the origins and direction of national reform, scholars have turned to examining the origins of local economic variation. This essay reviews recent work in regional political economy of contemporary China. In keeping with a movement in comparative politics toward analyzing subnational politics, the "new regionalists" seek to identify and explain meaningful heterogeneity in the Chinese polity and economy. Yet they go further than simply using subnational cases to generate or test theories about Chinese politics; instead, they propose that subnational political economies in China are a function of endogenous change rather than a reaction to national priorities. After identifying differences between "new regionalism" and previous studies of decentralization in China, I discuss this work according to the theoretical approaches (institutional, ideational, and socio-historical) used to explain the origins of regional differences. I conclude by examining the limitations of the new regionalist agenda in comparative and historical context and suggesting that scholars move past unconditional acceptance of the causal power of "socialist legacies" and instead attend to the importance of changes in the post-Mao administrative hierarchy.

Keywords: China; political economy; Economy; Government and Politics; China;

Format: Print

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Rithmire, Meg. "China's 'New Regionalism': Subnational Analysis in Chinese Political Economy." World Politics 66, no. 1 (January 2014).

Book Abstract: Although comparative politics is conventionally seen as the study of politics across countries, the field has a longstanding and increasingly prominent tradition in national contexts; focusing on subnational units, institutions, actors and processes. This book offers the first comprehensive assessment of the substantive, theoretical, and methodological contributions. With empirical chapters from across the contemporary Global South, including India, Mexico, and China, as well as Russia, the contributors show how subnational research provides useful insights about substantive themes in political science, from regimes and representation, to states and security, to social and economic development. In addition to methodological chapters with specific guidance about best practices for doing subnational research, this volume also proposes a set of strategies for subnational research, assesses their strengths and weaknesses, and offers illustrative empirical applications.

Working Paper | HBS Working Paper Series | 2019

Varieties of Outward Chinese Capital: Domestic Politics Status and Globalization of Chinese Firms

Meg Rithmire

Recent focus on China’s surging outward investment has overlooked a puzzling fact about China’s policy regime governing outward investment: rather than increasing liberalization and enhancing domestic “push” factors, China’s policy toward outward investment has been ambivalent and vacillating, pushing large-scale internationalization while also embracing strict capital controls. This paper accounts for China’s ambivalent policy moves by focusing on the domestic coalitions that sustain capital openness. I show how three types of domestic Chinese capital—state capital (SOEs), private capital (SMEs and large competitive firms), and crony capital (firms who enjoy access to profits based non-market rather than market advantages)—differ in political vulnerability and therefore pursue globalization in different ways. While all prefer capital openness, they do so for different reasons: state capital uses preferential access to domestic credit to expand internationally for political power and prestige in addition to profits; private capital, in keeping with the theoretical expectations of the international business literature, seeks markets and/or efficiency; and crony capital seeks to transform domestic access into international safety as quickly as possible. China’s policy ambivalence can largely be explained as the party-state’s attempts to discipline or empower these groups.

Keywords: outward investment; capital controls; Investment; Global Range; Capital; Globalization; Policy; Government and Politics; China;

Citation:

Rithmire, Meg. "Varieties of Outward Chinese Capital: Domestic Politics Status and Globalization of Chinese Firms." Harvard Business School Working Paper, No. 20-009, June 2019. View Details

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In 2015, a surprise presidential election result seemed to imperil Chinese investments in Sri Lanka, which were associated with China’s Belt and Road Initiative to build global infrastructure. In the previous decade, China had undertaken two major projects in the country: the construction of a port in the poor district of Hambantota (also the previous president’s hometown), for which Sri Lanka borrowed 1.2 USD billion dollars from the China Ex-Im bank, and a major real estate project outside of Colombo. The new administration pursued renegotiation of both contracts. In 2016, a Chinese state-owned company purchased the asset of the Hambantota port, generating concerns about sovereignty in Sri Lanka and Chinese naval ambitions in Delhi and Washington, DC. This case explores the dynamics of China's ambitious Belt and Road Initiative, a large-scale infrastructure and connectivity project launched under its powerful leader, Xi Jinping, as well as the politics and economics of sovereign borrowing in the age of Chinese lending. Did Sri Lanka fall victim to a sort of “debt diplomacy,” or did the Chinese side fail to understand Sri Lanka’s domestic political landscape? Was the sale of the asset the right choice for Sri Lanka? The right investment for China Merchants Group, which bought the 99-year lease?

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China's 'New Regionalism': Subnational Analysis in Chinese Political Economy

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