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  • 2021
  • Working Paper
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The Emergence of Mafia-like Business Systems in China

By: Meg Rithmire and Hao Chen
  • Format:Print
  • | Language:English
  • | Pages:22
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Abstract

A large literature on state-business relations in China has examined the political role of capitalists and collusion between the state and the private sector. This paper contributes to that literature, and our understanding of the internal differentiation among China’s business elites, by documenting the emergence of a particular kind of large, non-state business group that we argue is more akin to a mafia system than any standard definition of a firm. Drawing on large-N descriptive data as well as deep ethnographic and documentary research, we argue that mafia-like business systems share organizational principles (plunder and obfuscation) and means of growth and survival (relations of mutual endangerment and manipulation of the financial system). Understanding the particular moral economy that underlies mafia-like business systems and their interactions with the state challenges methodological foundations of research on China’s political economy and helps explain recent conflict between high-profile business people and the state.

Keywords

China's Political Economy; State-business Relations; Business Groups; Financial Systems; Economy; Government and Politics; Business and Government Relations; Finance; System; China

Citation

Rithmire, Meg, and Hao Chen. "The Emergence of Mafia-like Business Systems in China." Harvard Business School Working Paper, No. 21-098, March 2021.
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About The Author

Meg Rithmire

Business, Government and the International Economy
→More Publications

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More from the Authors
  • The New China Shock: How Beijing’s Party-State Capitalism Is Changing the Global Economy By: Margaret M. Pearson, Meg Rithmire and Kellee S. Tsai
  • Snapp: Scaling Under Sanctions in Iran (A) and (B) By: Meg Rithmire
  • OneSmart By: Nien-he Hsieh, Meg Rithmire and Shu Lin
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