September 2021
Article
Current History

Party-State Capitalism in China

By: Margaret Pearson, Meg Rithmire and Kellee Tsai

Format:Print

Abstract

The “state capitalism” model, in which the state retains a dominant role as owner or investor-shareholder amidst the presence of markets and private firms, has received increasing attention, with China cited as the main exemplar. Yet as models evolve, so has China’s “state capitalism.” We argue that a resurgent party-state, motivated by a logic of political survival, has generated political-economic dynamics that better resemble “party-state capitalism” than familiar conceptualizations of state capitalism. We examine three prominent manifestations of China’s unique model: party-state encroachment on markets; blurring boundaries between the state and firms; and demands for political fealty from firms of all kinds, including foreign ones. Nevertheless, there are constraints on this form of capitalism, both from dissatisfied domestic groups and international backlash. We conclude that China’s “state capitalism” bears less in common with common contemporary conceptualizations than it does with fascism in interwar Europe.