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TitleBeyond the Middle Kingdom: Comparative Perspectives on China's Capitalist Transformation (Contemporary Issues in Asia and Pacific)
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Table of Contents
List of Figures and Tables
	1. Overcoming Our Middle Kingdom Complex: Finding China’s Place in Comparative Politics / Scott Kennedy
Part One: Chinese Economic Reform and the Varieties of Capitalism
	2. Variety Within and Without: The Political Economy of Chinese Regulation / Margaret M. Pearson
	3. Developmental Dreams: Policy and Reality in China’s Economic Reforms / Arthur R. Kroeber
	4. Crossing the River by Feeling for Stones or Carried Across by the Current? The Transformation of the Chinese Automotive Sector / Andrew Wedeman
	5. Welfare Policy Pathways Among Large Uneven Developers / Mark W. Frazier
Part Two: Interest Groups in an Authoritarian Context
	6. Fragmented Influence: Business Lobbying in China in Comparative Perspective / Scott Kennedy
	7. Comparing China’s Capitalists: Neither Democratic Nor Exceptional / Kellee S. Tsai
	8. When Are Banks Sold to Foreigners? An Examination of the Politics of Selling Banks in Mexico, Korea, and China / Victor Shih
	9. Placing China in Comparison: An Outsider’s Perspective / Gregory J. Kasza
List of Contributors
Document Text Contents
Page 2

b e y o n d t h e m i d d l e k i n g d o m

Page 138

119Fragmented Influence

responded in interviews that when they want to discuss an economic policy,
they almost always seek out government offices, not Party organizations.
This is partly explained by the fact that the Chinese Communist Party
(CCP) has integrated itself so deeply into government agencies that there
is no need for companies to actively seek out the Party; the Party is there,
standing backstage. As several executives told me, the government and the
Party may be a “distinction without a difference.” On the other hand, it also
appears that the Party is not the target of lobbying because it lacks the de-
tailed policy apparatus and knowledge of government agencies. In addition,
even though Party officials occupy government posts from top to bottom,
these officials guard their government turf feverishly and do not want out-
side Party interference into their daily affairs. Company executives told me
that even though they may know an official is a Party member, they deter-
mine who to lobby based on the officials’ government responsibilities, not
their Party job.

t h e i m p a c t o f e c o n o m i c f a c t o r s

Although there are several elements of government–business ties that are
common across industries, there are also several aspects of these ties that
vary systematically. Chinese companies exist in a common political envi-
ronment, but the economic contexts of industries and companies generate
powerful signals to push companies to behave politically in different ways.
Key industry factors include economies of scale, technological sophistica-
tion, industry concentration, importance of interbusiness cooperation, and
the nature of integration into global markets. The most important company-
specific factors are size and ownership.

The first aspect where variation exists is in the quality of business asso-
ciations in different industries and regions. Although Chinese associations
are typically less autonomous and influential than their counterparts in the
United States and elsewhere, associations in some industries are clearly su-
perior to those in others. Economic factors deserve much of the credit. For
example, China’s steel industry is led by a core group of large state-owned
enterprises. These companies employ hundreds of thousands of workers,
contribute a large portion of the tax revenue of their towns, and undergird
many downstream industries. Add in the fact that SOEs are tethered to the
state, and it is understandable why China’s steel industry has had very weak

Page 139

Fragmented Influence120

industry associations. The China Iron & Steel Industry Association (CISA)
was created in 1999, not at the behest of its members but as a consequence
of the planned elimination of the government’s metallurgy bureaucracy.
CISA’s of�ces are in the old ministry compound, and most of the associa-
tion’s leaders are former ministry of�cials. CISA has become more active,
helping its largest members coordinate prices, pressing the Ministry of
Commerce to more aggressively defend Chinese steel companies against un-
fair foreign competition, and, for one year, negotiating the annual import
price for iron ore on behalf of the steel industry. However, China’s steel ex-
ecutives have long been dissatis�ed with CISA’s efforts, and they more com-
monly lobby the central government directly without any coordination pro-
vided by CISA.16

The contrast with the software industry is not absolute, but it is stark.
The software industry’s smaller, private �rms individually have small politi-
cal voices, but they have a habit of cooperating on technical issues, which is
eased by the fact that the industry is concentrated in Beijing, Shanghai, and
the Pearl River delta. These economic characteristics translate into a more
vibrant association system than in steel. China’s software industry has more
associations, many of which were initiated by their members and have played
a signi�cant role in helping their members. The China Software Industry
Association (CSIA) has a strong of�cial color, but there are over a dozen
�rm-initiated associations that focus on certain aspects of the industry, from
business management software to protection of intellectual property rights
and freeware. Some of the regional software associations also have more
member support than the national association. Although technically focused
on a speci�c aspect of software or a region of the country, these associations
actually take on national issues that are also on the agenda of the national
association, making the associations competitors with each other in some

Regional associations also vary in quality largely due to the different
economic conditions of the localities. The city of Wenzhou, in Zhejiang
Province, has the best-developed associations of any locality in the coun-
try because Wenzhou’s economy is composed almost entirely of small and
medium-sized private �rms who proactively organized associations across a
range of industries to address their needs. These associations are deeply in-
volved in interfacing with the government, providing services to their mem-
bers, and representing the sectors in international trade disputes. Shenzhen,

Page 276

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