In late July 1998, on a typically hot and humid Beijing day, a representative from the cashmere maker, Erdos Group, visited the offices of the State Economic and Trade Commission (SETC), the government organ then responsible for overseeing much of China’s industrial policy. He carried with him two letters, one by his own company’s leaders, the second a joint appeal by Erdos and twelve other Chinese firms. By most measures they were a motley crew. Besides the famous wool clothing manufacturer, the group also included the brash, state-owned electronics producer Changhong from Sichuan, which had come to dominate the national...

Throughout the People’s Republic of China’s history, determining the shape of the party-state’s institutions and defining their relationships with society have been the enduring issues of organizational policy. While the myriad failed attempts at bureaucratic reform and destructive efforts at social mobilization during the Mao era proved the futility of governance under the planned economy, market reforms enacted since the late 1970s have exponentially complicated the issue, particularly with regard to the state’s relationship with society.¹ Because of the central role that industry—both state-owned and private, domestic and foreign—inevitably assumes in China’s development efforts, a disproportionate concern has...

When thinking of heavy industry in China, one invariably conjures up images of a smoky steel mill. Following the founding of the PRC, developing the steel industry became the hallmark of China’s attempt at rapid industrialization, as the saying went, to “pass England and catch America” (chao ying gan mei). Investment in the 1950s was weighted toward heavy industry and steel in particular, as enterprises like Beijing’s Capital Iron and Steel (Shougang) and Anshan Iron and Steel (Angang) in Liaoning province were dramatically expanded. During the Great Leap Forward, backyard furnaces mushroomed, and in the 1960s, the Third Front strategy...

Steel has always been a priority sector to the PRC government and software may be the industry of the future, but in the post-Mao era, light industry, and consumer products in particular, are more closely associated with the country’s economic and social transformation. In the first decades following the revolution, most Chinese farmers and urbanites made do with the bare necessities, spending little on entertainment and goods that could ease their personal lives. By contrast, the grand promise of the Reform era and a redefined socialism has been to materially improve the everyday lot of ordinary Chinese. The PRC has...

In a country where agriculture occupies the lives of over 320 million people and one one-thousandth of that number work in the software industry, it might seem strange for a study trying to get to the heart of China’s political economy to focus on software. Having emerged as a global industry in the early 1980s, software does not have nearly the same legacy as farming or steel do in China. Although China apparently had 20,000 software engineers in 1984, the first genuine software firms did not open until a few years later, and the vast majority that currently exist registered...

Open up an American newspaper and find a story about China, and it will not take long to be reminded that the Chinese government is authoritarian. Stories about leadership changes made behind closed doors, human rights abuses, and controls on the media all feed the image of a strong, undemocratic state that is not consistently or systematically responsive to societal pressures. As accurate as these individual stories of China are, this book’s exploration into the politics of business in China demonstrates that they present far from the full picture. Spurred by marketization, companies—domestic and foreign, private and state-owned—are...