ABSTRACT
Most academic explanations of China’s reforms, and even its foreign policy,
have been based on domestic politics. Elite preferences or intra-elite con-
flicts,1 regional interests,2 or domestic political coalitions,3 have been high-
lighted by scholars as the driving forces behind policy shifts within the
domestic polity and economy. This level of academic insularity was under-
standable, given China’s relative autarky and limited involvement in inter-
national markets. According to Shirk,4 China’s socialist economy and ‘‘at
the border’’ institutions were simply too powerful, preventing changes in global prices or international economic forces from affecting domestic prices,
domestic supply and demand, or preventing domestic actors from ‘‘knowing
their interests’’5 – i.e., recognizing that they could benefit from deeper global
economic engagement. In fact, due to China’s fixed currency, even the East
Asian Financial Crisis, which toppled leaders across Southeast and East
Asia and triggered major structural economic reforms, had quite a limited
impact on China’s domestic political and economic development.
