Hostname: page-component-797576ffbb-cx6qr Total loading time: 0 Render date: 2023-12-04T16:45:07.877Z Has data issue: false Feature Flags: { "corePageComponentGetUserInfoFromSharedSession": true, "coreDisableEcommerce": false, "useRatesEcommerce": true } hasContentIssue false
  • English
  • Français

Politics and Business Group Formation in China: The Party in Control?*

Published online by Cambridge University Press:  08 October 2012

Kjeld Erik Brødsgaard
Kjeld Erik Brødsgaard*
Affiliation:
Copenhagen Business School. Email: keb.int@cbs.dk
Get access Rights & Permissions [Opens in a new window]

Abstract

As a result of economic reform and administrative restructuring in China, a number of powerful state-owned business groups (“national champions”) have emerged within sectors of strategic importance. They are headed by a new corporate elite which enjoys unprecedentedly high levels of remuneration and managerial independence from government agencies and which derives legitimacy from symbolizing China's economic rise. However, through the nomenklatura system, the Party controls the appointment of the CEOs and presidents of the most important of these enterprises and manages a cadre transfer system which makes it possible to transfer/rotate business leaders to take up positions in state and Party agencies. In order to conceptualize the coexistence of the contradicting forces for further enterprise autonomy and continued central control that characterizes the evolving relationship between business groups and the Party-state, this paper proposes the notion of integrated fragmentation.

Keywords

Chinese business groupsSOEsadministrative reformelite politicscadre managementintegrated fragmentation
Type
Articles
Information
The China Quarterly , Volume 211 , September 2012 , pp. 624 - 648
Copyright
Copyright © The China Quarterly 2012 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

*

The author wishes to thank Robert F. Ash, Koen Rutten, Carl Walter and Yang Jiang as well as two anonymous reviewers for their constructive comments and suggestions on an earlier draft of this article.

References

Allison, Graham T. 1971. Essence of Decision: Explaining the Cuban Missile Crisis. Boston, MA: Little, Brown and Company.Google Scholar
Amsden, Alice H., and Hikino, Takashi. 1994. “Project execution capability, organizational know-how and conglomerate growth in late industrialization.” Industrial and Corporate Change 3 (1), 111–47.Google Scholar
Anderson, Jonathan, and Hatheway, Larry. 2009. “How it All Ends (Transcript)” UBS Investment Report.Google Scholar
Andrews-Speed, Philip, Dow, Stephen, and Gao, Zhiguo. 2000. “The ongoing reforms to China's government and state sector: the case of the energy industry.” Journal of Contemporary China 23 (9), 5–20.Google Scholar
Barnett, A. Doak. 1985. The Making of Foreign Policy in China: Structure and Process. Boulder, CO: Westview Press.Google Scholar
Bo, Zhiyue. 2004. “The institutionalization of elite management in China.” In Naughton, Barry and Yang, Dali L. (eds.), Holding China Together. Cambridge: Cambridge University Press, 70–100.Google Scholar
Bo, Zhiyue. 2007. China's Elite Politics: Political Transition and Power Balancing. Singapore: World Scientific.Google Scholar
Brødsgaard, Kjeld Erik. 2002. “Institutional reform and the bianzhi system in China.” The China Quarterly 170, 361–86.Google Scholar
Brødsgaard, Kjeld Erik. 2003. “China's cadres and cadre management system.” In Gungwu, Wang and Yongnian, Zheng (eds.), Damage Control: The Chinese Communist Party in the Jiang Zemin Era. Singapore: Singapore University Press, 209–31.Google Scholar
Brødsgaard, Kjeld Erik. 2004. “Management of Party cadres in China.” In Erik Brødsgaard, Kjeld and Yongnian, Zheng (eds.), Bringing the Party Back In: How China Is Governed. Singapore: Eastern Universities Press, 57–91.Google Scholar
Brødsgaard, Kjeld Erik. 2009. Hainan: State, Society, and Business in a Chinese Province. London: Routledge.Google Scholar
Burns, John. 2006. “The Chinese Communist Party's nomenklatura system as a leadership selection mechanism: an evaluation.” In Erik Brødsgaard, Kjeld and Yongnian, Zheng (eds.), The Chinese Communist Party in Reform. London: Routledge, 33–58.Google Scholar
Chan, Hon S. 2004. “Cadre personnel management in China: the nomenklatura system, 1990–1998.” The China Quarterly 179, 703–34.Google Scholar
Chan, Hon S. 2009. “Politics over markets: integrating state-owned enterprises into Chinese socialist market.” Public Administration and Development 29, 43–54.Google Scholar
Chen, Jian. 2005. Corporate Governance in China. New York: Routledge.Google Scholar
Chen, Shaofeng. 2008. “State-managed marketization: China's approach to oil Security.” PhD diss., National University of Singapore, 2008.Google Scholar
Data, Supplement. 2008. Journal of Current Chinese Affairs (January). http://hup.sub.uni-hamburg.de/giga/jcca-cds/article/view/86/86. Accessed 11 November 2010.Google Scholar
Data, Supplement. 2009. Journal of Current Chinese Affairs (August). http://hup.sub.uni-hamburg.de/giga/jcca-cds/article/view/86/86. Accessed 11 November 2010.Google Scholar
Downs, Erica. 2008. “Business interest groups in Chinese politics: the case of the oil companies.” In Li, Cheng (ed.), China's Changing Political Landscape. Washington, DC: The Brookings Institution, 121–41.Google Scholar
Falkenheim, Victor C. (ed.). 1987. Citizens and Groups in Contemporary China. Ann Arbor: University of Michigan.Google Scholar
Fewsmith, Joseph. 2001. Elite Politics in Contemporary China. Armonk, NY: M.E. Sharpe.Google Scholar
Gilley, Bruce. 2004. China's Democratic Future. New York: Columbia University Press.Google Scholar
Gilley, Bruce, and Holbig, Heike. 2009. “The debate on Party legitimacy in China: a mixed quantitative/qualitative analysis.” Journal of Contemporary China 18 (59), 339–59.Google Scholar
Goodman, David S.G. (ed.). 1984. Groups and Politics in the People's Republic of China. New York: M.E. Sharpe.Google Scholar
Granovetter, Mark. 1994. “Business groups.” In Smelser, Neil J. and Swedberg, Richard (eds.), The Handbook of Economic Sociology. Princeton, NJ: Princeton University Press, 453–475 Google Scholar
Granovetter, Mark. 1995. “Coase revisited: business groups in the modern economy.” Industrial and Corporate Change 4 (1), 93–129.Google Scholar
Guthrie, Doug. 2006. China and Globalization. New York: Routledge.Google Scholar
Harasymiw, Bohdan. 1969. “Nomenklatura: the Soviet Communist Party's leadership recruitment system.” Canadian Journal of Political Science 2 (4), 493–512.Google Scholar
Harding, Harry. 1987. China's Second Revolution: Reform after Mao. Washington, DC: The Brookings Institution.Google Scholar
Howell, Jude (ed.). 2004. Governance in China. Lanham, MD: Rowman and Littlefield.Google Scholar
Huntington, Samuel. 1970. Political Order in Changing Societies. New Haven: Yale University Press.Google Scholar
Jie, Wu (ed.). 1998. Zhongguo zhengfu yu jigou gaige (China's Government and Institutional Reform) Beijing: Guojia xingzheng xueyuan chubanshe.Google Scholar
Keister, Lisa. 2000. Chinese Business Groups. New York: Oxford University Press.Google Scholar
Kennedy, Scott. 2005. The Business of Lobbying in China. Cambridge, MA: Harvard University Press.Google Scholar
Khanna, Tarun, and Rivkin, Jan W.. 2001. “Estimating the performance effects of business groups in emerging markets.” Strategic Management Journal 22 (1), 45–74.Google Scholar
Kuijs, Louis, Mao, William, and Zhang, Chunlin. 2005. “SOE Dividends: How Much and to Whom?” Washington, DC: World Bank.Google Scholar
Laliberté, André, and Lanteigne, Marc. 2008. The Chinese Party-State in the 21st Century. London and New York: Routledge.Google Scholar
Lampton, David M. 1987. “The implementation problem in post-Mao China.” In Lampton, David M. (ed.), Policy-Implementation in Post-Mao China. Berkeley: University of California Press, 3–24.Google Scholar
Lampton, David M. (ed.). 2001. The Making of Chinese Foreign and Security Policy in the Era of Reform, 1978–2000. Stanford: Stanford University Press.Google Scholar
Leff, Nathaniel H. 1978. “Industrial organization and entrepreneurship in the developing countries: the economic groups.” Economic Development and Cultural Change 26 (4), 661–75.Google Scholar
Li, Cheng. 2005. “The rise of China's yuppie corps: top CEOs to watch.” China Leadership Monitor 14.Google Scholar
Li, Cheng. 2009. “The Chinese Communist Party: recruiting and controlling the new elites.” Journal of Current Chinese Affairs 48 (3), 13–34.Google Scholar
Lieberthal, Kenneth G. 1992. “Introduction: the fragmented authoritarianism model and its limitations.” In Lieberthal, Kenneth G. and Lampton, David M. (eds.), Bureaucracy, Politics, and Decision Making in Post-Mao China. Berkeley: University of California Press, 1–32.Google Scholar
Lieberthal, Kenneth G. and Oksenberg, Michel. 1988. Policy Making in China: Leaders, Structures, and Processes. Princeton, NJ: Princeton University Press.Google Scholar
Lin, Kun-Chin. 2003. “Corporatizing China: Reinventing State Control for the Market.” PhD diss., University of California Berkeley, 2003.Google Scholar
Lin, Shuanglin. 2009. “The Rise and Fall of China's Government Revenue.” EAI Working Paper 150.Google Scholar
Liu, Chunhuang. 2009. Multinationals, Globalisation and Indigenous Firms in China. London and New York: Routledge.Google Scholar
Mertha, Andrew C. 2005. “China's ‘soft’ centralization: shifting tiao/kuai authority relations since 1998.” The China Quarterly 184, 791–810.Google Scholar
Mertha, Andrew C. 2008. China's Water Warriors. Ithaca, NY: Cornell University Press.Google Scholar
Morck, Randall, Yeung, Bernard, and Zhao, Minyuan. 2007. “Perspectives on China's outward foreign direct investment.” Journal of International Business Studies 39, 337–50.Google Scholar
Naughton, Barry. 2008a. “China's economic leadership after the 17th Party Congress.” China Leadership Monitor 23.Google Scholar
Naughton, Barry. 2008b. “SASAC and rising corporate power in China.” China Leadership Monitor 24.Google Scholar
Tak-Wing, Ngo, and Wu, Yongping (eds). 2009. Rent Seeking in China. London and New York: Routledge.Google Scholar
Nolan, Peter. 2001. China and the Global Economy. Basingstoke: Palgrave.Google Scholar
Oksenberg, Michel. 1968. “Occupational groups in Chinese society and the Cultural Revolution.” In Oksenberg, Michel, Riskin, Carl, Scalapino, Robert A. and Vogel, Ezra, The Cultural Revolution: 1967 in Review. Ann Arbor: University of Michigan, 1–44.Google Scholar
Pearson, Margaret. 2005. “The business of governing business in China: institutions and norms of the emerging regulatory state.” World Politics 57, 296–322.Google Scholar
Renmin ribao haiwai ban . 2010. “Li Rongrong: yi Zhu Rongji wei banyang, yi Pu Jing wei ouxiang” (Li Rongrong: Take Zhu Rongji as a Model, Take Putin as an Idol.). 8 September.Google Scholar
Shambaugh, David. 2008. China's Communist Party: Atrophy and Adaptation. Washington, DC: Woodrow Wilson Center Press.Google Scholar
Skilling, H. Gordon.1971. “Groups in Soviet politics: some hypotheses.” In Skilling, H. Gordon and Griffiths, Franklyn, Interest Groups in Soviet Politics. Princeton, NJ: Princeton University Press, 19–46.Google Scholar
Smångs, Mattias. 2006. “The nature of the business group: a social network perspective.” Organization 13 (6), 889–909.Google Scholar
Steinfeld, Edward S. 1998. Forging Reform in China: The Fate of State-Owned Industry. Cambridge: Cambridge University Press.Google Scholar
Steinfeld, Edward S. 2010. Playing Our Game: Why China's Rise Doesn't Threaten the West. Oxford: Oxford University Press.Google Scholar
Stokes, Bruce. 2009. “China's mission: export less; spend more.” National Journal 41, 30–36.Google Scholar
Walter, Carl E. 2010. “The struggle over ownership: how the reform of state-owned enterprises changed China.” The Copenhagen Journal of Asian Studies 28 (1).Google Scholar
Walter, Carl E., and Howie, Fraser J. T.. 2003. Privatizing China: The Stock Markets and Their Role in Corporate Reform. Singapore: John Wiley.Google Scholar
Yusuf, Shahidif, Nabeshima, Kaoru, and Perkins, Dwight D.. 2006. Under New Leadership: Privatizing China's State-Owned Enterprises. Palo Alto, CA, and Washington, DC: Stanford University Press and The World Bank.Google Scholar
Zhongguo renwu nianjian 2007 (Almanac of Prominent Persons in China 2007). 2007. Beijing: Zhongguo renwu nianjian she.Google Scholar
Zhou Ruijin. 2009. “Cut ties that bind China to special interests.” Caijing. http://English.caijing.com.cn/2009-10-23/110291625.html. Accessed 15 November.Google Scholar