Manipulating Globalization: The Influence of Bureaucrats on Business in China (Studies of the Walter H. Shorenstein Asia-Pacific Research Center)

The era of globalization saw China emerge as the world's manufacturing titan. However, the "made in China" model--with its reliance on cheap labor and thin profits--has begun to wane. Beginning in the 2000s, the Chinese state shifted from attracting foreign investment to promoting the technological competitiveness of domestic firms. This transition led local bureaucrats to compete for government funding and tax breaks to benefit their business clients. While bureaucrats successfully motivated local businesses to upgrade in some cities, in others, vested interests within the government deprived businesses of developmental resources and left them in a desperate race to the bottom. In Manipulating Globalization, Ling Chen argues that the roots of regional variation lie in the type of foreign firms with which local governments forged alliances as well as the historical preferences of the bureaucrats. Cities that initially attracted large global firms in the 1990s were more likely to experience manipulation from vested interests down the road. The book develops the argument with in-depth interviews, original surveys, and quantitative data across hundreds of Chinese cities and thousands of firms. Chen advances a new theory of economic policies in authoritarian regimes, shedding light on state-led development and coalition formation in other emerging economies that comprise the new "globalized" generation.