ABSTRACT
For nearly 20 years, it looked as if China had found-by chance rather than by design-a uniquely successful development model, with rural industrialization at its core. Its uniqueness was mainly due to the fact that to some extent it could remedy the market and institutional constraints produced by China’s urban-rural segmentation. Moreover, it capitalized on existing differential treatments of state-owned, collective and private enterprises. The phenomenon was captured under the term ‘local state corporatism’ [Oi, 1998]. In other words, the local state treats the enterprises under its jurisdiction as components of a larger corporate whole. The whole functions as a business corporation with local officials acting as the equivalent of a board of directors or CEO. Such a relationship is one of mutual dependence, with the local state controlling enterprises
through the allocation of labour, capital and land resources, while the enterprises in return adhere to local corporate interests and turn over substantial portions of their revenues to the local state.
