Book Reviews
Integrating China into the Global Economy. By NICHOLAS LARDY.
[Washington, DC: The Brookings Institution Press, 2002. x�244
pp. Hard cover $48.95, ISBN 0-8157-5136-2; paperback $19.95,
ISBN 0-8157-51235-4.]
This book assesses the extent of China’s increasing integration into the
global economy during the reform era and explores the likely global
impact of China’s membership in the World Trade Organization (WTO).
The five chapters of the book cover China’s pre-WTO trade reforms; the
terms of China’s final WTO accession package; and the implications of
China’s WTO membership for foreign companies, world trade, the
international trading system, and US-China relations. It presents sober
and reasoned analyses of these issues and represents a solid attempt to
take stock of China’s economic progress to date and its prospects over the
coming decade.
Witnessing the mounting publications on this subject, one may wonder
what perspectives or insights from this book are still worth repeating and
remembering. Within this short review, I would like to highlight the
following three.
First, Lardy contends that, contrary to popular wisdom in the media
and research literature, China’s economy had become far more open than
Japan’s and it was ready to join the WTO. Before WTO entry China had
already achieved the lowest tariff protection of any developing country
and had also shrunk non-tariff barriers impressively. Most price distor-
tions were eliminated in the decade before WTO entry and much of the
necessary industrial and agricultural restructuring was already underway
before accession. Other substantial progress included expansion of trade
rights, adoption of current account convertibility, vast expansion of the
legal scope for foreign investment, legalized development of the private
sector, and establishment of basic social security systems in urban areas.
If this assessment is correct, why did it take 15 years for China to get into
the WTO? Lardy argues that the long waiting “reflects as much the rising
bar imposed by members of the Working Party … as China’s slowness to
embrace the principles of the multilateral trading system” (p. 9). This
leads to the second insightful message.
Under pressure from the US and the EU, China committed itself to
rules that violate the non-discrimination principle, the soul of a liberal
trading order. These rules include the transitional product-specific safe-
guard, the special textile safeguard, and the treatment of China as a
non-market economy for 15 years after WTO entry. These rules clash
with normal WTO practice, being inconsistent with the WTO’s prohib-
ition against voluntary restraint agreements and stimulating potential
protectionism for developed countries to shut out China’s exports. More
important, an aggressive utilization of these so-called “WTO-plus” provi-
sions would substantially undermine China’s further reform attempts and
The China Quarterly, 2003
1085Book Reviews
cripple China’s ability to sustain its WTO implementation efforts. For
example, under the Agreement on Subsidies and Countervailing Mea-
sures, China becomes ineligible for favourable treatment of subsidies
associated with privatization. China would not be allowed to treat debt-
for-equity swaps, a promising means for privatization, as “non-action-
able” subsidies. Newly privatized enterprises therefore face the possibility
of countervailing duties. An insistence on this or other similar issues
would undermine the privatization process in China and collide with
Western intentions to promote private property rights and a liberal market
order. While politicians and bureaucrats may typically focus on the direct,
first order impact of these agreements in their negotiations, it is the duty
of scholars to detect and reveal their far-reaching consequences, as Lardy
does in this book.
Thirdly, Lardy dismisses the notion that China is solely to blame for
the large and increasing US trade deficit with the country. He argues that
the US is running a global trade deficit that is a consequence of the low
US saving rate relative to domestic investment. To fill the gap, the US
must rely on foreign countries to run trade surpluses and extend credit.
“Selective trade liberalization abroad only affects the country-by-country
distribution of the US global trade deficit, not its overall size” (p. 158).
To reduce its global deficit, the US would either have to increase its
saving rate or reduce its domestic investment. This is a powerful point
worth highlighting and repeating whenever deficit hawks seek to single
China out as a threat to the US national security. Lardy warns, “U.S.
policies that have given rise to the perception in China that the United
States seeks to delay or even block China’s emergence as a major
economic power must be abandoned” (p. 167). Furthermore, “the United
States should be extraordinarily judicious in exploiting the three highly
protectionist measures that U.S. negotiators insisted China agree to as a
condition for WTO membership” (p. 168).
All in all, the thesis of the book is well established, carefully examined,
and meticulously documented. The book can serve as a very valuable
reference to scholars, business professionals, policy makers, as well as
more general readers who are concerned about the dynamics of the
international trading system and the growing importance of China in the
world economy.
LAIXIANG SUN
Selling China: Foreign Direct Investment During the Reform Era. By
YASHENG HUANG. [New York and London: Cambridge University
Press, 2003. 383 pp. £40.00. ISBN: 0-521-81428-6.]
Internationalizing China: Domestic Interests and Global Linkages. By
DAVID ZWEIG. [Ithaca, NY: Cornell University Press, 2002. 291 pp.
$54.00. ISBN 0-8014-8755-2.]
In 2001 China attracted more foreign direct investment than any other
1086 The China Quarterly
nation in the world, including the United States. China’s love affair with
foreign capital and foreign investors’ ardour for China is increasingly a
subject of academic inquiry. What are the causes of this mutual attrac-
tion? And perhaps more important, what are its effects on China’s
internal political and economic development? Two recent books by
political scientists are focused on answering the former question and, by
way of conclusion, speculating on the latter. In their attempts they have
contributed to a new and fascinating debate on how globalization (in-
creased contact and interdependence between states, organizations, and
individuals) is changing China.
Despite their similar focus, these books are complementary rather than
overlapping. They employ different theoretical approaches and modes of
empirical evidence. Huang’s book is situated in the general business
literature on foreign direct investment with scant emphasis on political
science while Zweig forges an eclectic argument that draws from political
economy, China studies, and sociology. Zweig employs various methods
of data collection and empirical evidence, relying both on extensive
interviews and statistical data. Huang relies mainly on statistical data
culled from various sources and a small number of interviews with firm
managers and officials. Both books are data rich and are argued persua-
sively. While Zweig’s research is more finely-grained and attentive to
regional differences in opening up, Huang uses some key case studies to
make his general points more specific.
In Selling China, Huang argues that China’s ability to attract foreign
direct investment is a sign of weakness rather than strength. Large inflows
of foreign direct investment are in part the result of two institutional
characteristics of China’s political economy. First, there is a “political
pecking order of firms” that grants SOEs greater access to credit and
political favouritism. This pecking order descends downward from SOEs
to collectives to domestic private enterprises (although Huang notes that
leadership attitudes toward private enterprise began to change at the end
of the 1990s). Domestic demand for FDI is generated because FDI
functions as a substitute for credit for many firms at the lower levels of
this order and also as a method of SOE rescue through “JV acquisition”
at the higher levels. Huang’s main point here is that there is systematic
discrimination against private Chinese firms, which prevents them from
gaining access to credit, limits their legal protection, and also prevents
them from acquiring many SOEs. The second institutional distortion is
domestic economic fragmentation, which limits the expansive abilities of
Chinese firms across different regions due to local protectionism. Foreign
firms are less inhibited by this economic fragmentation (indeed Zweig
and others argue that they take advantage of it) and can more easily
extend their reach across China’s national economy. Huang here surpris-
ingly does little to engage with the literature on Chinese-style federalism,
which tends to portray China’s economic decentralization as an unmiti-
gated good for China’s reform prospects.
Huang concludes that the reasons for China’s institutional weaknesses
are inherently political. The general literature on FDI, which tends to
1087Book Reviews
focus on market failures, overlooks political explanations for large
inflows of FDI into developing countries. Huang’s political explanation is
that the Chinese state continues to maintain an ideological adherence to
socialism in at least one respect, state ownership of large enterprises.
Protection of SOEs, rather than a deliberate attempt to favour foreign
firms, has been the driving motivation and large inflows of FDI are an
unintended consequence of SOE policy.
Zweig’s account of China’s increasing internationalization is more
far-reaching, examining not only the politics of trade and foreign direct
investment but also policies of overseas education and foreign aid. His
account of the local politics of opening up in rural Jiangsu is one the best
attempts in recent years to link leadership policy decisions with move-
ment on the ground by local elites, TVE managers, and overseas Chinese
investors. It is an explanation with strong microfoundations but Zweig
also argues strongly for the importance of key central leaders, especially
Zhao Ziyang. Zweig’s main argument for all three policy realms (econ-
omy, education, and foreign aid) is that opening up was a dynamic
process of deregulation and liberalization led by external forces and
changes in relative prices, but sustained by the ability of local elites,
bureaucrats, and others to benefit from China’s gradual and segmented
opening up. Zweig shows, as Joel Hellman did for post-communist states,
how partial reform can yield unequal benefits to those who have admin-
istrative and regulatory power. However, like Dali Yang in Beyond
Beijing (Routledge 1997), Zweig also places great emphasis on the ability
of Chinese reforms to be pushed further through their competitive effects
between regions and sectors and in the end to weaken the control of those
in power. Zweig is careful, however, to note that China does not seem to
be moving toward a free-market economy of deregulation and the rule of
law, but rather has built a market economy on the shaky foundations of
corruption, weak regulation, and unclear property rights. In this con-
clusion Zweig and Huang are in agreement, as Huang notes repeatedly
that China’s liberalization entailed administrative decentralization but not
true privatization at least until the late 1990s. Thus despite the emphases
in both books on a successful aspect of China’s economic reform,
internationalization and greater openness, both authors point to funda-
mental weaknesses in China’s political economy.
Huang’s conclusion that the CCP regime remains committed to social-
ism is left largely unexplored despite evidence in the late 1990s that
privatization and the private sector were gaining ground. I remain uncon-
vinced that the policy shifts around the SOE problem have anything to do
with ideology, especially of the socialist variant. Huang’s evidence is thin
on this point in particular and despite its importance to the overall
argument it is not analysed at length. Rather than explaining the protec-
tion of the SOE sector as some kind of ideological remnant of socialism,
an alternative explanation is that SOE ownership has been retained
because it is one important means by which the CCP maintains its
monopoly on political power. With the improvement in the treatment of
private entrepreneurs, however, do we see an important shift in CCP
1088 The China Quarterly
strategy and a more concerted effort to make the economic transition
from state ownership more complete? Huang spends most of the book
proving that domestic demand for FDI is a sign of institutional distortions
in the Chinese economy but spends little time on analysis of the political
foundations of these institutions.
Zweig gives ample space to the political foundations of “segmented
deregulation” and is able to show how China’s global linkages expanded
over time as increasing numbers of social actors were able to benefit from
openness. Zweig’s use of rational choice theory to explain the large
movement of mostly unorganized collectivities is appropriate. At times,
however, the emphasis on interests seems overdrawn, for example when
he notes that Chinese regulatory policies in the 1970s prevented Chinese
academics from knowing their interests (p. 262). A more careful parsing
of the difference between knowledge of one’s own interests and the
ability to articulate and then to act upon those interests is warranted.
Both of these books will add to the debate on the nature of China’s
political economy amid globalization. They offer persuasive arguments
for why globalization was demanded from within, but both end with
cautionary notes on the future of China’s opening up.
MARY GALLAGHER
Chinese Entrepreneurship and Asian Business Networks. Edited by
THOMAS MENKHOFF and SOLVAY GERKE. [London: RoutledgeCurzon,
2002. xv�335 pp. £65.00. ISBN 0-7007-1653-X.]
Chinese Entrepreneurship and Asian Business Networks contributes to a
growing and contested field of scholarship. The introduction presents the
volume as a corrective to what it regards as misconceived, popular
perceptions of Chinese entrepreneurs and business networks in Asia, and
expends much energy criticizing prominent examples of these miscon-
strued ideas. The major claim is that the culturalist perceptions of bamboo
networks and business tribes (pp. 4–7) are not sustained by “sober
empirical facts” (p. 8). The aims are to “counteract” the myths about
Chinese entrepreneurs with the use of “data” revealing the “actual
patterns,” and to present “alternative” interpretations of concepts such as
“guanxi” that are “essentialised” in “mainstream literature on Chinese
business” (p. 8). To judge by the introduction and the last chapter (both
written by the editors), the volume’s agenda is dominated more by the
will to engage in a polemic than by the urge to get on with the job of
exploring how Chinese businesses in Asia function.
Fortunately, most of the contributions are much stronger than the
introduction and the last chapter. Tong Chee Kong and Yong Pit Kee in
their study of the Lee Rubber Group provide an exemplary, incisive and
sensitive model for how to deal with the complex ideas about Chinese
1089Book Reviews
business (pp. 217–18), regarding culture as an important object of enquiry
alongside economic factors. Terence Gomez, in his political-economy
analysis of Chinese businesses in Malaysia, acknowledges difference in
business style and the ways in which the Chinese have been able to use
ethnic resources. Jakob Lindahl and Lotte Thomsen’s analysis of the
ethnic Chinese businesses in Ho Chi Minh City, Vietnam, shows how
both the political economy setting and cultural perceptions give shape to
the business frameworks. Thomas Heberer’s conceptualizes private en-
trepreneurship in China and Vietnam within the dynamics of the tran-
sitional economies. Constance Lever-Tracy, David Ip, and Noel Tracy in
a well-documented tour de force through the Chinese community of
Brisbane understand the “ethnic” characteristics in their dynamic interac-
tion with the economic and social environment. Yao Souchou’s examin-
ation of guanxi provides a fresh, empirical insight into how economic
decision-making, business interaction and social conventions are inter-
woven.
These and other contributions demonstrate how “ethnic Chinese” ways
of doing business and managing enterprises merit empirical examination
and critical debate. They understand Chinese management style, business
interaction, and co-ethnic networks not as simplistic shorthand concepts
nor as independent variables explaining growth or success, but as social
resources evolving within complex economic and social environments.
Several of the contributions will be on next year’s reading lists for my
Chinese society and overseas Chinese classes.
The volume deserves better editing and copy-editing. A couple of
contributions are hard to read, due to, in one case, extreme vagueness of
style, and, in another, excessively long and convoluted sentences that are
almost incomprehensible. The many mistakes in pinyin are annoying
(Gaige Kaifeng for gaige kaifang; Qiyijia for qiyejia; mianxi for mianzi;
xing yong for xinyong; gang qing for ganqing – just to highlight some).
Although the volume is not the last word on Chinese businesses in
China and South East Asia, it illuminates them with good empirical
studies.
FLEMMING CHRISTIANSEN
The Chinese Coal Industry: An Economic History. By ELSPETH THOMSON.
[London: RoutledgeCurzon, 2003. xx�412 pp. £75.00. ISBN 0-
7007-1727-7.]
The performance of the Chinese coal industry in the 20th century is
undeniably important given the pivotal role played by coal as a source of
energy for Chinese industry and consumers alike until very recently. Was
the coal industry a binding constraint on Chinese economic growth across
the 1949 divide? And if so, can we identify some form of managerial
failure as its root cause?
1090 The China Quarterly
The answer offered by Tim Wright, in his well-known Coal Mining in
China’s Economy and Society 1895–1937 (1984), is that the coal short-
ages did not constrain pre-war economic growth. On the contrary: it was
the slow growth of the Chinese economy in aggregate that limited the
expansion of the coal industry. The main obstacle to the expansion of
coal production was thus to be found on the demand side, and not in
entrepreneurial failure or some other supply-side cause. Accepting this
(rather Keynesian) conclusion, the question naturally arises as to whether
the coal industry fared any better under Mao, and after. In particular, this
framework of analysis invites us to consider whether the Maoist regime
(and its successors) lifted the demand-side constraint, only to substitute a
supply-side constraint in the form of state ownership and management.
Rather surprisingly, few scholars have attempted to address these key
questions for the post-1949 epoch. We are therefore greatly indebted to
Elspeth Thomson for her willingness to bridge this chasm in our know-
ledge. For material, Thomson relies upon a mixture of interviews with 25
officials in 1987 (and a further three in 1998), as well as a wide range of
official statistics and Chinese-language sources. A brief chapter is admit-
tedly devoted to the industry pre-1949 but, as Thomson readily admits,
this is little more than a summary of the work of Wright, and of
Ikonnikov’s The Coal Industry of China (1977). This, then, is pre-emi-
nently a book on the post-1949 coal industry and that is exactly what was
needed. But the book’s chief attraction is its wealth of information on a
vast range of consumption and production issues; the study has been a
long time in the making but the detail repays
本文档为【Social Connections in China Institutions, Culture, and the】,请使用软件OFFICE或WPS软件打开。作品中的文字与图均可以修改和编辑,
图片更改请在作品中右键图片并更换,文字修改请直接点击文字进行修改,也可以新增和删除文档中的内容。
该文档来自用户分享,如有侵权行为请发邮件ishare@vip.sina.com联系网站客服,我们会及时删除。
[版权声明] 本站所有资料为用户分享产生,若发现您的权利被侵害,请联系客服邮件isharekefu@iask.cn,我们尽快处理。
本作品所展示的图片、画像、字体、音乐的版权可能需版权方额外授权,请谨慎使用。
网站提供的党政主题相关内容(国旗、国徽、党徽..)目的在于配合国家政策宣传,仅限个人学习分享使用,禁止用于任何广告和商用目的。