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    Party-State Capitalism in China
    08 Dec 2020Working Paper Summaries

    Party-State Capitalism in China

    by Margaret Pearson, Meg Rithmire, and Kellee Tsai
    China’s political economy has evolved from “state capitalism” to a distinctly party-driven incarnation. Party-state capitalism, via enhanced party monitoring and industrial policy, deepens ambiguity between the state and private sectors, and increases pressure on foreign capital, prioritizing the regime’s political survival above all.
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    Author 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 demonstrate this by examining three prominent manifestations of China’s unique model: party-state encroachment on markets; a blending of functions and interests of state and private ownership; and politicized interactions with foreign capital. Nevertheless, there remain deficits in the party-state’s hold over capital, some of which themselves result from Beijing’s logic of control. By probing the comparative and historical context of this evolution of China’s model, we suggest directions for further inquiry on the consequences of party-state capitalism.

    Paper Information

    • Full Working Paper Text
    • Working Paper Publication Date: November 2020
    • HBS Working Paper Number: HBS Working Paper 21-065
    • Faculty Unit(s): Business, Government and International Economy
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    Meg Rithmire
    Meg Rithmire
    F. Warren McFarlan Associate Professor of Business Administration
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