Corporate Capitalism and Socialist China

As the Chinese economy moves away from central planning, scholars have predicted that it will evolve into a hybrid semi-socialist, semi-market system. Oi (1999), for example, sees the emergence of a new form of “local state corporatism” in which local governments form developmental alliances with local firms. ¹ Duckett (1998) argues that elements of the state bureaucracy are becoming entrepreneurial actors in their own right and hence there is the emergence of an “entrepreneurial state.” ² Blecher and Shue (1996) maintain that the local state involvement in the economy has led to the emergence of a new “developmental state,” ³ while Gore (1998: Chapter 3) foresees the emergence of a new “developmental communism.” Karmel (1994), on the other hand, sees China moving in the direction of “state managed capitalism.” Others take a less optimistic view. Lu (2000), for instance, argues that rising corruption has given birth to a degenerate form of “booty socialism.” Conventional wisdom thus suggests that as it emerges, “capitalism with Chinese characteristics” will remain a degenerate form of capitalism, one which combines elements of Leninism and capitalism. Moreover, mainstream thinking holds that China will “grow out of the plan” as the private sector grows more rapidly than the state sector, thereby gradually shrinking the state sector's relative size and marketizing the economy through evolution rather than privatization.