University of Southern California Dissertations and Theses

Becoming a successful capitalist in China: Chinese private entrepreneurs and their relationship to the state

(USC Thesis Other)

Becoming a successful capitalist in China: Chinese private entrepreneurs and their relationship to the state

PDF

Download a page range

Download transcript

Copy asset link

Request this asset

Transcript (if available)

Content INFORMATION TO USERS
This manuscript has been reproduced from the microfilm master. UM I films
the text directly from the original or copy submitted. Thus, some thesis and
dissertation copies are in typewriter face, while others may be from any type of
computer printer.
The quality of this reproduction is dependent upon the quality of the
copy submitted. Broken or indistinct print, colored or poor quality illustrations
and photographs, print bleedthrough, substandard margins, and improper
alignment can adversely affect reproduction.
In the unlikely event that the author did not send U M I a complete manuscript
and there are missing pages, these w ill be noted. Also, if unauthorized
copyright material had to be removed, a note w ill indicate the deletion.
Oversize materials (e.g., maps, drawings, charts) are reproduced by
sectioning the original, beginning at the upper left-hand comer and continuing
from left to right in equal sections with small overlaps.
Photographs included in the original manuscript have been reproduced
xerographically in this copy. Higher quality 6" x 9’ black and white
photographic prints are available for any photographs or illustrations appearing
in this copy for an additional charge. Contact UM I directly to order.
ProQuest Information and Learning
300 North Zeeb Road. Ann Arbor. M l 48106-1346 USA
800-521-0600
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
BECOMING A SUCCESSFUL CAPITALIST IN CHINA:
CHINESE PRIVATE ENTREPRENEURS AND THEIR RELATIONSHIP TO
THE STATE
by
Yayoi Kato
A Thesis Presented to the
FACULTY OF THE GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTERS OF ARTS
(EAST ASIAN AREA STUDIES)
August 2001
Copyright 2001 Yayoi Kato
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
UM I Number: 1409592
___ __®
UMI
U M I Microform 1409592
Copyright 2002 by ProQuest Information and Learning Company.
All rights reserved. This microform edition is protected against
unauthorized copying under Title 17, United States Code.
ProQuest Information and Learning Company
300 North Zeeb Road
P.O. Box 1346
Ann Arbor, M l 48106-1346
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
UNIVERSITY OF SOUTHERN CALIFORNIA
The Graduate School
University Park
LOS ANGELES, CALIFORNIA 90089-1695
This thesis, written b y
' o r kktc>
Under the direction o f h S iz . Thesis
Committee, and approved b y all its members,
has been presented to and accepted by The
Graduate School, in partial fulfillment o f
requirements for the degree o f
Master o f Arts
Dean o f Graduate Studies
Date August 7 , 2001________
THESIS COMM1
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
Table of Contents
Tables and Figures iii
I. Introduction 1
II. Literature on the Relationship between the Communist Party and Private
Business 3
Corporatist Approach 4
Clientelist Approach 11
Conflicting Findings: More Independence and the Alternative Mechanisms 17
III. Method and Data 21
Mehtod 21
Data 23
IV. Analysis and Findings 25
The Determinants o f Firm s’ Better Performance 25
Analysis 1 25
Analvsis2 28
The Determinants o f Closer Party Connections 34
Analvsis3 35
Analvsis4 38
Categorizing the Determinants 43
Firms’ Performance 44
Party Support 46
Association M embership 47
Four Routes to Successful Business in China? 49
V. Conclusion 57
Bibliography 61
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
Tables and Figures
Tables
1 . Factor Loadings of the Variables Constituting Finns’ Performance 26
2. Unstandardized Coefficients for the Regression of Finns’ Performance on Party
Connection Variables Only 26
3. Unstandardized Coefficients for the Regression of a Firm’s Performance on both Party
Connection and Non-Party Connection Predictors 30
4. Unstandardized Coefficients for the Regression of Party Support on All the Predictors 35
5. Factor Loadings of the Four Non-Party Connection Variables 38
6. Factor Loadings of the Four Membership Variables 39
7. Factor Loadings of the Three Membership Variables Excluding CCP 39
8. Unstandardized Coefficients for the Regression of Association Membership on All the
Predictors 40
9. Unstandardized Coefficients for the Regressions of Firm’s Performance, Party Support
and Association Membership on All the Predictors 43
10. Factor Loadings on “Exclusives” Factor 45
11. Factor Loadings of the Three Factors Affecting Firm’s Performance 45
12. Factor Loadings of the Items Affecting Party Support 47
13. Factors and Factor Loadings of the Items Affecting Association Membership 47
14. Unstandardized Coefficients for the Regressions of Party Support, Association
Membership and Firm’s Performance on the Reorganized Predictors 49
Figures
1. Mutual influence and causation among Party Support, Firms’ Performance and
Association Membership, and Several Patterns of Firms’ Business Successes 58
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
I
I. Introduction
Until the early 1990s, private entrepreneurs in China had been tightly controlled or
monitored by the government and their business activities had been restrained by various
official regulations. The entrepreneurs, most of whom are small business owners or vendors,
were also disdained by the public for their profit-making activities, which conflicts with both
traditional Confucian values and egalitarian communist values (Young 1991). As the
Chinese economy develops and the private sector is incorporated into the Chinese economy,
however, scholars started observing the emergence of the alliances or close relationships
between the Communist party and private enterprises. Private entrepreneurs, a relatively
marginalized economic force, have needed official assistance and protection in order to have
access to material or financial resources, which are mostly controlled by the Communist
Party. The party, on the other hand, expected the private sector to serve as a supplement to
failing state-owned firms and to provide the state with a new source of tax revenue. The
mutual necessities have developed into a mutually dependent relationship between party
officials and private business, a so-called “symbiotic relationship” (Solinger 1993). Most of
the existing literature suggests that the alliances between the state and private enterprises
tend to be stronger in more industrialized regions, and that larger and more profitable private
firms tend to have stronger connections with the state.
In this thesis I will investigate whether or not the alliances described in this literature
are also observed quantitatively in surveys of private entrepreneurs collected from different
parts of China. Two concerns stemming from the previous research motivated me to do this
study: one is the tendency for scholars to over-generalize their findings; and the other is a
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
2
relative weakness in focusing primarily on the motivations or situations of entrepreneurs.
Due to decentralization and the rise of localism, researchers have scattered across the
country and conducted extensive field research in their focused regions. Some scholars live
in rural towns or villages for a long period of time and observe changing situations of
particular localities, along with the changing political and economic climates in the whole
country. This field research, while valuable, contains problems that arise from some
scholars’ tendency to generalize the phenomena based on the findings in their own localities,
or their exclusive reliance on the information obtained from a handful of firms or officials
they have had contact with. As a result, their analysis is often biased toward distinct
characteristics of their regions. Some scholars have recently observed, contrary to previous
findings, the proliferation of more independent private firms operating exclusively in the
market. Rather than seeking financial assistance from state banks, these firms have relied on
financial loans from relatives or unofficial banks (Unger and Chan 1999; Tsai 2000). It is
difficult to reconcile these new findings with the existing literature that argues the
dependence of private firms on the party.
Secondly, scholars investigating the development of private firms are often obsessed
with the political environment surrounding those private firms. Scholarly works often fail to
take individual entrepreneurs’ views into account. Entrepreneurs’ primary motive is to make
profit and expand their business; therefore, their main concerns are largely economic rather
than political, even though their business activities are largely constrained by the objective
political conditions. While the clientelist approach makes a contribution by incorporating
entrepreneurs’ views into the analysis, it often over-generalizes the informal or corruptive
aspects of Chinese bureaucracy or the bargaining between party officials and private firms.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
3
It is therefore my intention to investigate how accurate the scholarly assessment o f the
importance of the party is for the development of Chinese private business. This analysis
raises several questions. How is the party’s usefulness reflected in a firm’s profit or
performance? How actually do official ties or party support improve the performance of
private firms that increasingly operate in the market? Are there any successful private
entrepreneurs who do not rely on party connections? By asking these questions, I will
analyze whether or not exploiting official connections or depending on party assistance is the
only way for private entrepreneurs to become successful capitalists in China.
II. Literature on the Relationship between the Communist Party and Private Business
Existing literature on the relationship between the state and private enterprises is
roughly divided into two approaches: corporatism and ciientelism. The corporatist approach
analyzes the party - private business alliances, mainly focusing on the roles and activities of
two state organizations. Some analysts examine official business associations through which
the state tries to control and accommodate private business, and other scholars analyze local
governments that have become increasingly powerful, entrepreneurial and independent from
the central government in decentralization process. The ciientelism approach mainly
investigates the relationships, or patron-ciient ties, with an emphasis on the interactions
between individual party officials and entrepreneurs or firms. The approach’s main focuses
are: individual officials’ and entrepreneurs’ motivation or strategy for the cultivation and
maintenance of the ties, the bargaining process between the two sides and their implications
on the Chinese economy as a whole.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
4
Corporatist Approach
One of the main focuses of corporatist literature is the role of business associations
established by the state. Corporatist scholars mainly investigate how the state tries to control
private enterprises through the use and establishment of these associations. The state, or the
party leadership, has contradictory demands for private sector development. While it
expects the growing private sector to be a complement for poorly performing state-owned
firms, it does not want the sector to be fully independent. Therefore, the state itself has
established business associations — the attempt to “preempt the emergence of autonomous
organizations” (Pearson, 1994) — and tries to incorporate private enterprises into the state
corporatist structure. Although this corporatist arrangement is called different names, such
as state corporatism or “socialist corporatism” (Pearson 1994), scholars agree that in China
the corporatist patterns appeared when the state loosened its direct control over society,
rather than strengthened it. Therefore, as the reform progresses and the economy is more
liberalized and decentralized, the more corporatist organizations are established as a
substitute control mechanism (Pearson 1994; Unger and Chan 1995).
Despite the fact that these official associations increasingly accommodate their
members’ interests, they are not as autonomous as business interest groups operating in
advanced democratic countries (Solinger 1993; Pearson 1994; Unger and Chan 1995).
Pearson indicates that the China Association for Enterprises with Foreign Investment
(CAEFT). seemingly the most autonomous business organization in China whose members
are mostly foreign-owned enterprises, is closely connected to the state and often functions as
a tool for the party in implementing foreign investment regulations and policies (Pearson
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
5
1994). However, the degree of state control over these business associations varies. In the
study of the differences in the state’s control over three business associations — Self-
Employed Laborer’s Association (SELA), Private Enterprises Association (PEA) and All
China Federation of Industry and Commerce (ACFIC), Unger argues that clearly the party
leadership is more interested in incorporating successful and larger firms into its own sphere
by accommodating the interest of these firms, while trying to control smaller firms. The
ACFIC, the oldest business organization in China whose membership consists of large and
profitable enterprises, has acted for its members’ interests and functioned as a “bridge”
between private business and the state. While big and profitable private firms are
increasingly incorporated into the corporatist structure, smaller enterprises seem to be left
outside of it. The associations for smaller or the middle-sized enterprises - such as the
SELA, or Geti laodongzhe xiehui, and the Private Enterprises Association, or Siying qiye
xiehui - do not assist or accommodate membership firms as the ACFIC does. Although
these associations seem to impose a top-down control on private firms, the effective control
of the membership firms are difficult in reality due to the lack o f incentives of supervising
officials or jurisdiction problems among various bureaus. These official negligence and
indifference ironically leave small private firms relatively independent from state control
(Unger 1996).
This state corporatist pattern seems to be replicated at the local level. The
decentralization of economic decision-making in the reform era has made local governments
less dependent on the central government and the local officials’ loyalty to the state has
declined. Particularly, in more industrialized regions or provinces, local officials or party
cadres began to establish their own “corporatist empires” at county, township or village
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
6
levels (Unger and Chan 1995:47). With the emergence of this localism, scholars have
shifted their focuses away from national-level state corporatism to local-level corporatism.
They found that, despite the existence of regional diversity, large firms are far more
welcomed by local cadres, bureaucrats, or the local branches of the business associations,
and they enjoy a high degree of support from local governments. In those areas, a “dual
leadership” of the central state and the local governments has emerged and local
governments often ally with private entrepreneurs in order to defend their local interests
against the central state (Liu 1992; Odegaard 1992; Solinger 1993; Unger and Chan 1995;
Wank 1995a).
Unger observed that some local branches of the associations function better than
their national headquarters in Beijing in terms of the accommodation of members’ interests.
The farther from Beijing, the more assistance or protection is provided for the membership
firms, and the more local autonomy is observed. And this tendency is stronger in more
industrialized regions. The local branches of the SELA or Private Business Associations,
which are mostly inactive in Beijing, function better and often are strong enough to negotiate
with the central government on behalf of private firms (Unger and Chan 1995; Nevitt 1996;
Unger 1996).
The increasing power of the business associations tied up with private business leads
some scholars to consider the possibility of the rise of civil society. Unger argues that the
increasing autonomy of these intermediate organizations may move Chinese politics away
from state corporatism to “societal corporatism” (Unger 1996). The empowerment of the
associations, however, at the same time implies stronger ties between the state and
capitalists, which may rather inhibit the emergence of democracy. Even if the central
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
7
government's interest and authority has been undermined by the “bottom-up” articulations of
the business interest (Unger 1996:818) or by the emergence of local corporatist empires, the
associations, as well as local corporatist states, are still the state’s organizations.
In reaction to the civil society argument, some scholars started asking what is the
real interest of the business associations or local corporatist states. It is often difficult to
determine whether the associations try to control private firms or to protect them. Odegaard
argues that the same local SELA branch in Sichuan often seems to be protecting the
membership firms while controlling or harassing them at the same time, depending on the
quality of guanxi, or relationship, to the state those firms have (Odegaard 1992).
Nevitt argues that associations’ performance is determined by career strategies
chosen by local officials who supervise the associations. The economic reform created a
new career incentive for individual local officials to be “big fish” in their own regions, rather
than pursuing careers climbing up the party hierarchy. Although the basic function of
business associations is to control private firms, some local officials assist and protect the
firms to boost the regions’ economic growth so as to increase the officials’ power and
prestige. He also argues that lower rank officials tend to have fewer loyalties to the central
government and that these officials are more likely to accommodate the interests of private
business and promote its development (Nevitt 1996).
Although Nevitt’s analysis indicates the existence of independent interest within the
state, the alliances between local officials and private business rather seem to be
strengthened by the changes in local officials’ career strategies: the more independent local
governments become, the stronger alliances seem to develop between the local states and
private business. His analysis also suggests that local governments’ attitudes toward private
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
8
firms increasingly become similar to their attitude toward collective enterprises. Nevitt’s
analysis agrees in many aspects with Oi’s (1995) depictions of the monolithic. East Asian
type corporatist states emerging at the local level. Although Oi’s focus is the relationship
between local government and collective enterprises, or township and village enterprises
(TVEs) owned by local governments, she argues that decentralization has given greater
autonomy to local governments and made them “entrepreneurial:” in order to maximize its
political and economic interests, each local government, just as the East Asian “strong
states” did in the course of the state-led economic growth, assists and protects local firms
with the backing of local state banks and administrative bureaus, justifying its interventions
in enterprise affairs (Oi 1995). Although Oi uses the term “entrepreneurial,” this type of
cohesive local corporatist state that leads the local-level industrialization and marketization
through planning and coordination among administrative bureaus, is labeled a
“developmental state” by other scholars. These scholars differentiate “developmental”
corporatist states from “entrepreneurial” ones whose own administrative bureaus engage in
profit making activities and compete with each other rather than assist firms. It is, however,
difficult to distinguish the two types of local states because they often coexist (Belcher 1991;
Baum and Schevchenko 1999).
Oi and Walder suggest that one o f the possible consequences of rural
industrialization led by these local corporatist states is “Federalism, Chinese style:” Market
competitions among regions promote inter-provincial market activities and mobility of firms
and customers, which, along with the further decline of the central state, leads to the
diffusion of political power (Montinola, Qian and Weingast 1995; Oi 1995; Walder 1995).
Nee also argues that the rise of corporatist alliances between local government and collective
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
9
firms, or so-called “neo-localism,” represents transitional phenomena from central planning
to a full-fledged market economy. The rapid growth of collective firms assisted by market-
oriented - or “developmental” - local governments, is replacing the hierarchical
organizational ties of a command economy to the vertical ties among firms, and eventually
will make the “re-distributive” functions of the central state unnecessary, or make them
simply “regulatory” ones. Nee points out, however, that if market forces are to eventually
become predominant, political intervention by local governments should be reduced and
firms should be given full autonomy, which is rather difficult to achieve at present (Nee
1992).
In the pursuit of local economic development, local governments are trying to apply
the same methods that they used to control collective firms to private firms, providing a
similar degree o f assistance, accommodation, or protection. Liu described the rapid
industrialization of the city of Wenzhou, Zhejiang Province, led by private enterprises that
allied with the local government. The similar type of monolithic, market-oriented and
“open-minded” local government to Oi’s corporatist state model has assisted private firms
through “business affiliations,” sheltering them from central state control and often
tolerating illegal practices. Liu, however, claims that local cadres are not altruistic but
motivated by their own personal interests because the more developed the local economy,
the higher salaries they could get. Therefore, the “coincidence” of the interests of local
cadres and of private firms is the key to the success of Wenzhou’s economic growth (Liu
1992).
Although Liu’s argument seems to confirm that local governments are strengthening
their control over private firms, it also suggests that private entrepreneurs voluntarily, or
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
10
even enthusiastically, collaborate with benevolent local government rather than being forced
to do so by developmental, monolithic and often authoritarian - or interventionist ~ local
government. This type of benevolent and less developmental state could be labeled,
following Hsu’s definition, as a “collaborative” state, which mainly engages in regulatory
activities (Hsu 1999).
However, the limit of the corporatist approach is that, due to its one-sided focus on
the state or official side view, it is difficult to distinguish two different phenomena: whether
local corporatist states are expanding their control from collective to private enterprises or
the difference between the two types of enterprises is fading. Nee indicates that the
distinction between collective firms and private firms has recently been eroding, especially
in highly industrialized coastal regions, due to the increases of “red-hat” firms - the private
firms registering as collectives for the benefit of tax reductions or privileged access to raw
materials, which at the same time makes private enterprises more vulnerable to unauthorized
interferences from local governments (Nee 1992:7)
Another weakness of the approach is that it is also difficult to determine from the
corporatist accounts whether the state tries to control private firms or is penetrated by social
actors, like private firms, who have own demands and plans. Baum and Schevchenko, in
addition to “developmental” and “entrepreneurial,” indicate the existence of two other types
of local states, namely, “predatory” and “clientelist.” “Predatory” states, whose officials’
engage in bureaucratic rent-seeking activities as opposed to “healthy” profit making
activities of “entrepreneurial” states, are more prevalent in less industrialized regions, while
“clientelist” states are more seen in urban areas (Baum and Schevchenko 1999). These types
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
11
of states seem to allow more penetrations from social actors than “developmental” states
because of their lack of cohesion and incentives.
Clientelist Approach
Whereas the corporatist approach looks at the state-business alliances almost
exclusively by focusing on the state roles or individual state official’s interests or intentions,
the ciientelism approach analyzes the alliance incorporating the entrepreneur’s side views
and strategies, focusing on the roles of guanxi, or patron-client ties, between individual
officials and entrepreneurs. The clientelist scholars also investigate informal, illegal,
collusive aspects of the alliance formations and of official side’s motivations, which often
result in the blurred boundaries between the state and non-state, or public and private
sectors.
Odegaard explains the processes of rural elite formation in Sichuan Province,
connecting the roles of business associations and guanxi. She argues that both officials and
rich entrepreneurs have approached each other, and that guanxi goes hand in hand with
associational activities. Rich entrepreneurs are often former cadres or persons who are
connected to high-level officials in kinship relations. These entrepreneurs are given
privileged access to raw materials or financial resources with the help of the local branches
of business associations. The entrepreneurs are also protected from abuses from local
bureaus, and often use associations to legitimize their illegal activities, such as tax evasion.
Private Firms without guanxi, especially younger and highly educated entrepreneurs, are
more likely to face local cadres’ harassment. Not only access to raw materials or bank loans
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
12
is denied but also higher taxes or business fees are often demanded by local bureaus. These
forms of “legal sabotage,” sooner or later, force those entrepreneurs to collaborate with the
local government either by forming partnerships or joint ventures with government-owned
collective enterprises or by hiring the cadres as managers. Collaborations naturally engender
a mutual dependence, or often collusions, between the officials and the firms. Odegaard
suggests that the alliances have been formed through movement across the boundaries
between the state and non-state sectors, with the former officials becoming private
entrepreneurs and private firms becoming collective firms through the forced partnership
(Odegaard 1992). While Odegaard does not clearly mention what motivates local officials
to form the alliances with private entrepreneurs - whether they are motivated by communal
interests or personal gains through illegal means, Baum and Schevchenko’s definition of a
“predatory state” which engages in bureaucratic rent-seeking, seems to be consistent with
Odegaard's picture of local states.
Wank, based on his field research in Xiamen, Fujian province, argues that the
alliances through guanxi or patron-client ties between officials and entrepreneurs are the
result of various interactions among individual local officials and private entrepreneurs, each
of whom acts rationally, employing the “best available strategies” in the uncertain and
“asymmetrical” environment of the transitional economy (Wank 1996).
Due to the transition from central-planning to the a market economy, the resource
allocation system in China has been half-liberalized - relying on the market mechanism— but
the other half is still controlled by the party. Unless private entrepreneurs secure resources
like raw materials, estate and financial capital through official connections, their firms’
“healthy” operations are not guaranteed. Entrepreneurs also need to protect themselves from
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
13
arbitrary enforcement of regulations or harassment from local government bureaus or cadres.
Official connections are crucial for obtaining permission for foreign trade or for selling
products to state-owned firms. These difficulties private firms are facing under the
transitional economic system become the best profit opportunities for local party officials:
entrepreneurs offer payoffs or gifts to officials to receive the officials’ protection or
discretion, which naturally leads to mutually dependent and often corruptive relationships
between the two.
Wank’s description of the officials’ attitudes is consistent with the definition of a
“clientelist” state rather than “predatory” (Baum and Schevchenko 1999). The merger of the
state and non-state sector has also occurred in the urban city of Xiamen through different
process and motivations from what Odegaard observed in rural Sichuan province. Whereas
in Sichuan the merger has occurred mainly through the forced partnerships by local cadres,
following their “legal sabotage,” in Xiamen entrepreneurs seem to offer local officials new
career opportunities, based on their own business interests, by hiring the officials as
managers in their firms. In return, some private firms register their firms as collective
enterprises in order to enjoy more privileged status. Through these processes, state officials
become capitalists and private firms become public firms (Wank 1995b).
Wank names the development of patron-client networks in the reform era “symbiotic
ciientelism” (Wank 1995b) or “market ciientelism” (Wank 1996). It is symbiotic in terms
of the reciprocal, mutually beneficial aspect of exchanges between the party and enterprises,
not one side’s total dependence on the other as was the ciientelism in the pre-reform era
(Wank 1995a). Wank also considers the clientelist network as a new institutional form
based on social trust that promotes economic growth and efficiency. According to Wank,
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
14
“market ciientelism” is a different type of marketization from the one assumed by neo
classical economics, which considers entrepreneurs’ attempts to exploit, maintain and
develop personal ties inefficient because of the increases in transaction costs. Such
activities, however, are rational and efficient market activities for Chinese entrepreneurs
operating in the transitional economic system filled with uncertainties due to the poorly
specified, and poorly enforced, legal and property rights or to the insufficiency of the market
mechanism. (Wank 1996).
Patron-client ties are a form of social trust in the context of power asymmetries
such as those between state and society actors. Although clients (private
entrepreneurs) are generally more dependent on patrons (officials), patrons are
also dependent on clients because of the specificity of a tie. The trust built up in
the tie is not readily transferred by one actor to another, enhancing the likelihood
of future co-operation and orientation towards mutual benefit. Therefore trust,
like property rights, is productive, by enabling actors to calculate risks and likely
returns, it encourages business activity that would be less forthcoming in its
absence (Wank 1996: 823).
The transitional economy, therefore, is not actually “transitional;” the half-liberated
and half-controlled economy seems to be fixed forever with the emergence of the new and
distinct type of market institution. Although the development of “market ciientelism” has
undermined the central state’s authority by promoting local government’s deviations from
state policies, it is unlikely to result in the demise of the communist government because it
has contributed to perpetuate the party presence in the market economy. Wank predicts that
the patron-client ties - or the “link between business success and bureaucratic support”—
would be strengthened, as the Chinese economy develops further and is more incorporated
into the international economy because more commercialized economy needs more
clientelist ties for efficient business activities or transactions. Although the infusion of
foreign capital through foreign direct investments seems to promote more independence of
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
15
Chinese enterprises from the state. Wank denies the possibility. Because any Arm that
engages in business activities in China is forced to develop clientelist ties with appropriate
officials, the infusion of foreign capital and the resulting business expansion only promotes
further development of market ciientelism (Wank 1996).
Naughton also explains how the rational behavior of profit-maximizing firms leads
to complex bargaining relationships with state officials, which in turn contributes to the
maintenance of the party rule and bureaucratic presence, and, therefore, makes the transition
to a full market economy very unlikely. He argues that the coexistence of an unregulated
planning economy and an imperfect market economy forces entrepreneurs to negotiate with
local officials for the prices of input and output at the same time, which Naughton calls “plan
bargaining” and “exchange bargaining,” respectively. Firms’ attempt to sell their products at
market price is hampered by entrepreneurs’ own cost-benefit calculation. Selling their
output at higher market prices endangers the relationship with officials through which the
entrepreneurs obtain input materials below market price. Therefore, as Wank argues,
entrepreneurs choose to accumulate capital in the form o f “guanxi,” which brings more long
term benefits to the firms; therefore, only “fools” operate on the market principle.
Naughton’s analysis implies that state officials and bureaucrats, by deliberately avoiding
“freezing the bureaucratic portion of economy,” perpetuate the transition and try to preserve
the party presence (Naughton 1992:263-8). Braun’s anthropological work in local
communities in Sichuan also supports Naughton’s description of conservative bureaucrats
who, intentionally or not, show little interest in market reform. He argues that local officials,
as well as local residents and private businessmen, simply try to maintain the status quo,
while taking advantage of the transitional economy for their personal gains. Due to the
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
16
traditional hierarchical values embedded in the local residents, state officials’ power and
prestige have remained unchanged since the pre-reform era. Although the development of
private enterprises has created a new interest and a new value of pursuing wealth among the
local populace, the emergence of private business has rather reinforced the power of officials
because without ties to the officials, people could not even make money (Bruun 1995).
Depending on various approaches and focuses, scholars have drawn different
pictures regarding the future of China’s economic reform. The corporatist approach,
compared with ciientelism, seems to make more optimistic predictions of market or even
democratic transition in future, such as the rise of “societal corporatism’’ (Unger and Chan,
1995) or “market preserving federalism” (Montinola, Qian and Weingast 1995; Oi 1995;
Walder 1995). Although their optimism is criticized by scholars who argue that a
corporatism initiated by communist states is less likely to lead to the rise of civil society or
democracy (Zhang 1994; Dickson 2000), most scholars agree that the central government’s
influence and political power have been significantly weakened by the rise of local
corporatism. The clientelist approach, on the other hand, maintains the more cynical,
pessimistic view or prediction of future political changes. Although Pei claims that
“bureaucratic chaos” - or the Chinese bureaucracy’s inflexibility and inability to deal with
the newly arising private sector — allowed the “activation o f an informal takeover coalition”
that led the “capitalist revolution” (Pei 1994), the very bureaucratic corruption and chaos, for
ciientelism scholars, are important factors that contribute to sustain the party rule and even
economic growth.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
17
Conflicting Findings: More Independence and the Alternative Mechanisms
Although the two approaches differ in many aspects, both claim the existence of
strong ties or alliances between the state and private enterprises. Recently, however, some
scholars have started questioning the accepted “facts” of the party-business alliances. Unger
argues that there is significant regional diversity in the closeness of the state-business ties
and in local governments' attitudes toward private firms. Based on his research in
Guangdong Province, he submitted a very different picture of private firms’ growing
independence from local government. These firms exclusively rely on the market for sales,
and on family or kin networks for financial capital. In some regions where private enterprise
is predominant, the village or township governments only assume “passive developmental”
or regulatory roles in spite of those areas’ high degree of industrialization, and patron-client
ties are weaker than in areas dominated by collective firms (Unger and Chan 1999).
These findings suggest a very different scenario of market transition from the
corporatist approach that assumes the crucial roles played by “developmental” local
corporatist states in the process. The findings are differ from the clientelist’s conception of a
“predatory” state or its depiction of entrepreneurs’ business attitudes or ethics. According to
Unger, private business people, due to participation in the market and growing competition
from outside, increasingly become self-reliant, innovative and active outside of the regions,
rather than reliant on local official connections through guanxi. Unger concludes that, with
the proportional increase in the number of private firms, private firms’ independence will be
strengthened nationwide.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
18
Although it is difficult to deny that Unger is committing overgeneralization and
selection bias, some scholars suggest that maintaining independence from state control or
local officials’ “exploitation” is not impossible, though it is difficult, if a firm has special
expertise or higher revenue crucial for sustaining local economy or if that firm has special
networks of support outside of the region or among extended family members (Odegaard
1992). Guanxi or kin networks serve as a means for cultivating party connections on one
hand; they also serve as a counterforce to bureaucratic control (Bian 1994). In this aspect,
small-scale firms, which constitute the majority of the private firms in China, seem to do a
better job of evading state control than bigger firms. Some scholars argue that smaller firms
have weaker connections with the state because they do not have strategic importance or
only represent “poor resource bases” for party officials. Despite the government’s claim,
officials’ negligence or indifference to smaller firms is pervasive in reality, and smaller firms
like SELA member firms, enjoy more independence than bigger and elite ACFIC members
(Nevitt 1996; Unger 1996). A similar indifference or negligence is observed in less
industrialized regions. Although local cadres in poorer regions tend to resort to coercive
methods to control private firms or to be predatory, alliances or clientelist ties between local
bureaucracy and private business are less developed in these regions (Nevitt 1996; Wank
1996; Unger and Chan 1999). If indifference is another word for independence, it is possible
to argue that smaller firms may enjoy more independence. The lack of official assistance
exposes those firms to more market competition, which forces entrepreneurs to find
alternative support mechanisms or horizontal ties with local communities or other
enterprises. Wank divides private enterprises into two groups according to firm size, and
argues that smaller firms tend to form “horizontal market-societal connections” in order to
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
19
overcome the lack of official connections, whereas larger firms tend to form vertical ties to
the state, although the cohesion of the horizontal ties between smaller firms is weak enough
to allow the state’s penetrations (Wank 1995a).
If we focus more on smaller firms or less industrialized regions, a different scenario
of market transition might be drawn: the transition, if it is occurring, has not been led by rich
coastal regions, bigger firms or monolithic local governments, but by smaller firms or
hinterlands that developed alternative mechanisms of network or assistance, by taking
advantage of the state’s indifference. Tsai indicates the “re-emergence” or development of
informal credit associations called hui, in Zhejiang and Fujian Provinces. Hui mainly
finances small firms that are denied access to official bank loans, or marginalized forces like
female entrepreneurs, low-educated owners or small family businesses. She argues that
informal associations have been playing important roles in promoting economic growth in
commercialized coastal regions like Wenzhou. According to Liu, Wenzhou’s growth was
led by private firms supported by the entrepreneurial local government (Liu 1992), but Tsai
argues the importance of hui in leading the economic success of Wenzhou by financing the
small-scale private firms, which constitutes the majority of the firms in Wenzhou (Tsai
2000).
If most of the Chinese private firms are small-scale firms and their numbers are
increasing, their growing reliance on alternative mechanisms like hui may have serious
implications for the reform process and also on the alliances between private firms and the
state, too. By focusing more on individual entrepreneurs’ situations in this study, I try to
observe the alleged alliances from the private firms’ side. If I assume that the ultimate goal
of private firms is to make profit, not cultivate official connections, it may be possible to get
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
20
a more precise assessment of the portion of private firms that already participated in the
market or that rely more on non-party support. Tsai argues that hui finance is economically
rational compared to state bank loans reflecting political logic. The corporatist approach
failed to take this “economic rationality” into account because of its state side focus and its
obsession with “political logic.” The clientelist approach, although identifying
entrepreneurs’ strategies and interests well, also overemphasizes the party officials’ power
and corruptive attitudes, and fails to consider the alternative support structures entrepreneurs
might be able to employ, such as guanxi or kin networks. Because entrepreneurs have their
own interests and intentions, they may use whatever works, including the party, friends,
relatives and foreigners. If more and more entrepreneurs conclude that selling and
purchasing at market prices is less costly than maintaining official ties by giving officials
payoffs and gifts, entrepreneurs’ aggregated activities, against the clientelist claim, may
gradually lead China to “market preserving federalism” or a full market economy.
In addition, the corporatist and clientelist approaches are very different in their
assessment of local governments’ and officials' roles and motivations. The clientelist
approach considers that officials are taking advantage of the transitional economic system
(Solinger 1993) and their incompetence and corruptive practices ironically contribute to the
preservation of the state. In most of the corporatist analyses, on the other hand, the same
local officials are, collectively, market-oriented and entrepreneurial cadres whose increasing
power vis-a-vis the central state is leading the “quiet revolution from within” (Walder
1995:16-7). These conflicting views of officials’ roles and motivations suggest that
officials’ attitudes may to a certain extent be contingent on private firms’ situations,
necessities or attitudes. By engaging in the micro-level analysis of self-interested private
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
21
entrepreneurs, or “capitalists,” I hope to shed light on the effects of individual entrepreneurs’
interests and choices on the future changes in China’s larger political environment.
III. M ethod and Data
Method
The previous research suggests that larger and more profitable firms tend to develop
closer relationships to the party or stronger official connections. This means that the degree
of the official connection or the amount of party support that private firms develop or receive
depends on a firm’s profitability or performance. Firms enjoying better performance or
higher profitability get more support from the party. This hypothesis, however, leads to an
absurd assumption of entrepreneurs’ motivation once the causal logic is applied: private
firms have to get bigger and more profitable to develop stronger official connections. If the
ultimate goal of private firms is to make profit rather than to develop good official
connections, and if alliance formation is reciprocal as the clientelist approach has assumed,
the hypothesis should be stated this way: A private firm’s closer relationship to the party
leads to higher profits or better performance of the firm. The attempt to incorporate the
entrepreneurs’ motivations into the causal models, thus, yields a mutual causation problem.
The problem mainly owes to the reciprocal aspect of the “mutually dependent” relationships
formed between the two sides: While certain firms become bigger because of their closer
official connections, bigger firms are more likely to be approached by the state or party
officials who are motivated by various strategic concerns or personal interest.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
22
In order to deal with this mutual causality, I formulate two sets of hypothesis and
causal models, and analyze them separately. First, by assuming that private firms are
approaching the state to cultivate official ties necessary for the firms’ business success, I will
try to find out the major determinants of higher profitability or better performance of private
firms. Firms’ performance is measured by operationalizing the firms’ yearly revenue and
profit, capital holdings and the number of employees. The regression analysis of firms’
performance will be divided into two parts. First, I will regress firm’s performance only on
the predictors indicating firms’ party connection - such as cadre background or membership
in associations or the Communist Party (Analysis 1). Next I will add non-party connection
variables as control variables. They are owners’ or firms’ characteristics like educational
level or age, firm’s location, industry, decision-making style, market orientation or the
degree of family networks the firms have developed (Analysis 2). After this, the two
hierarchical regression models will be compared in order to examine how important party
connection variables are to firms’ better performance relative to non-connection predictors.
Secondly, I will consider the other causality that more successful and larger firms
are more likely to be approached by the state or to develop a stronger connection to the
party. The strength or closeness of a firm’s connection to the party is measured in two ways:
the amount of direct party support firms receive and firms’ association membership. The
first dependent variable, “party support,” is created by combining a firm’s experience of
receiving official bank loans and bureaucratic assistance from twelve local administrative
bureaus. The second one, “association membership,” is measured by a firm’s participation
in four official business associations. I will separately regress the two dependent variables
on the same predictors used in Analysis 1 and 2 (Analysis 3 and 4). Although my main
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
23
interest is to consider the effect of firms’ performance on these two dependent variables, I
will also examine the connection between the two party connection variables, namely party
support and association membership. If mutual causations or influences are found between
any two of the three dependent variables, I will test whether or not the mutual causations are
tautological, using a procedure called two stage least squares.
After these analyses, for the purpose of simplification, I will attempt to reorganize
the determinants of each of the three dependent variables through explanatory factor
analysis. Finding major tendencies of the determinants for each by combining predictors
that share similar characteristics or factors not only decreases the number of independent
variables but also helps explain the relationship between party connection variables and non-
party connection ones. This process helps clarify the nature of the party-business alliance,
and specifically addresses questions regarding the type of alliance to the state particular
firms develop and those alliances’ contributions to the firms’ profit.
After the process, I will regress “party support,” “association membership,” and
“firms’ performance,” again, on the reorganized predictors. By analyzing the results of the
simplified regression models together, I will examine how a firm’s party connections and
performance interact with each other and situate the findings in the existing literature.
Data
The data analyzed here is from an official survey of Chinese private enterprises in
1993, conducted by the Chinese Communist Party and the All China Federation of Industry
and Commerce (ACFIC). It is the first systematic, nationwide survey of private enterprises
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
24
in China and the same survey has been conducted every two years since that time. The
party’s purpose of the survey is to use collected information of private firms for future policy
consideration on non-state sector development and regulation. Although it is an official
survey, the party and the ACFIC made certain efforts to obtain as honest and precise as
possible information of and from private enterprises. Each municipal government’s office
was asked to select .5 per cent of the registered private firms as samples in a way that
reflects the natural distributions of industries of the area from manufacturing to
transportation, construction, commerce, and to other service industries. Interviewers were
sent by the local government’s offices to ask the respondents - the owners of private firms --
survey questions face to face. The survey interviews were conducted anonymously and
collected data were later analyzed by researchers in the Chinese Academy of Social
Sciences.
The questionnaire consisted of forty-five questions and the answers are recorded in
174 variables. The main questions asked in the questionnaire are: entrepreneurs’ social
economic status and entrepreneurial motivations, their views and attitudes toward the party
and business associations, and their firms’ financial situations, labor sources, difficulties,
future plan and management style. The questionnaire also inquires as to the existence of
organizations within or between firms, firms’ relations with particular local government
bureaus, and owners’ participations in official business associations or the party. The survey
data and questionnaire are available at the Universities Service Centre, Chinese University of
Hong Kong.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
25
IV. Analysis and Findings
The Determinants of Firms’ Better Performance
In this analysis, I will mainly investigate the effects of party support or official
connections on firm’s better performance or higher profitability. By building hierarchical
multivariate regression models, I will explore not only the relationship between firms’ close
ties to the party and better performances but also the relative importance of party support or
official connection variables to other determinants. The assumption of the analysis is that
the ultimate goal of private enterprises is to make profits, and that cultivating official
connections is one of the choices entrepreneurs can make for their business success.
Analysis 1
Do the differences in firms ’ official connections or party support make differences in the
firms ’ profits or the scale o f operations?
Hypothesis: Firms that have developed a closer relationship to the party enjoy better
performance.
Dependent variable: Firms’ performance.
The dependent variable in this analysis, “firms’ performance,” which indicates
firms’ operational scale or profitability, is created by taking factor scores of the logged 1992
revenue and profit, registered amount and the number of employees of each firm. The factor
loadings of each item are shown in Table 1.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
26
In this analysis, I will limit independent variables to the ones indicating firm’s
relationships or connections to the party, such as association membership, local
governments’ and bureaus’ support or the number of cadre relatives or friends. The
regression coefficients of these predictors on firm’s performances are shown in Table 2.
Table 1. Factor Loadings of the Variables Constituting Firms’ Performance:
The Number of Employees (LN10) .790
Registered Amount (LN10) .842
Firm’ s Revenue (LN10) .920
Firm’ s Profit (LN10) .894
Note: All the items except the registered amount arc from firms’ 1992 records.
Table 2. Unstandardized Coefficients for the Regression of Firms’ Performance on Party
Connection Variables Only:
Former cadre background (d) .122 (.063)
The N of relatives or friends who -.011 (.022)
are cadres (0-5)
Recruited labor from state unit (d)
149***
(.031)
Targeting state firms (d) .062 (.060)
SELA member (d) -.219 (.119)
PEA member (d) .293* (.121)
ACFIC member (d) .483** (.142)
CCP member (d) .247 (.133)
Democratic Party member (d) .172 (.155)
Friendship/Trade Club member (d) .412** (.119)
The N of membership (0-6) -.149 (103)
Received state bank loan (0-2) .185*** (.023)
Party support (0-24) .028*** (.005)
Constant 1.048 (.127)
Adjusted R2 .193
The Number of cases 1106
Notes: Standard Errors are in parentheses. R=.451. (d) = dichotomous variables (yes=l, no=0).
‘ Targeting state firms" is coded one if selling products mainly to state unit firms; zero otherwise.
“Friendship/Trade Club member” is coded one if a firm is a member in both or either of Friendship Club (Lian yi
hui) or Trade Club (Tongye Gonghui); zero otherwise.
“The N of membership" is coded from zero to six depending on how many associations or parties firms belong to
any of SELA, PEA, ACFIC, CCP, Democratic Party, and either of Friendship or Trade Clubs.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
27
Table 2 (continued)
“Received state bank loan” is a trichotomous variable coded from zero to two: coded two if firms are financed
both start-up and operational capital by state bank, coded one if either of the two; zero otherwise.
“Party Support” is coded from zero to twenty-four and higher values represent a higher level of support that a
firm is receiving. A detailed explanation of the variable is found in the following paragraph.
*p<-05; **p<.01; ***p.<001.
Table 2 shows that the hypothesis is confirmed: many of the party connection
variables, such as membership in associations, party support and the availability of official
bank loans, have positive effects on firms' performance. Especially, association
membership variables — PEA, ACFIC and Clubs members - strongly affect better
performances of private firms. However, membership in the Self Employed Laborers
Association (SELA) -- the association for smaller firms — has a negative effect. An
unexpected finding is that membership in the Communist Party and former cadre
background do not have statistically significant effects on firms’ performance, which
undermines the clientelist's argument. In addition, “the number of memberships’’ in
business associations or political parties has a negative effect on performance, though it is
not statistically significant. This means that the more associations or parties firms belong to,
the less profitability these firms enjoy. The possible reason is that the negative effect of
SELA membership and the small contribution of CCP membership drag down the positive
effects of PEA, ACFIC and Clubs memberships.
Although the effect of party support on performance is relatively small (.028), it is
statistically significant. The “party support” variable has a 24-point scale and higher values
represent higher levels of party or bureaucratic support. It is based on respondents’ answers
to the question, “how much support does your firm receive from the following twelve party
agencies and bureaus - local government office, Public Security Bureau, Environmental
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
28
Agency, Quality Control Agency, Tax Bureau, Price Control Bureau, Hygiene Bureau,
Custom Bureau, Media Agency, Personnel Bureau, Commerce and Industry Control Bureau,
and Measurement Agency?” Three choices are given for each agency support - (0) good
support, (1) normal support, and (2) no support. The answers were recoded into the reverse
order and the recoded values for the twelve agencies were summed. Therefore, the variable
has the maximum value of 24, which represents the highest level of support firms could
receive from the twelve agencies or bureaus. “Received state bank loan” also has a strong
effect on performance (.185). The variable is a three-point scale from zero to two. Firms
financed both start-up and operational capital by official banks are given two, firms with
only either of the two are given one, and firms with no official bank lending are given zero.
However, it is difficult to determine, only from this analysis, whether the availability of bank
loan or party support contributes to a firm’s performance or the other way around — more
profitable or strategically important firms are more likely to be approved for official bank
loans, which contributes to these firms’ profit. This tautological problem will be considered
later.
Analysis 2
What are the major determinants o f private firm s' better performance? Are factors other
than the close relationship to the party related more to higher profitability or better
performance o f the firms?
In this analysis I will regress firms’ performance on all the predictors I created from
the survey, by adding non-party connection variables. Then, I will consider whether or not
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
29
the relationship found in the previous regression model holds. If it holds, I will also examine
how important the party connection variables are to a firm’s performance relative to non-
party connection ones.
I added a total of twenty, non-party connection variables and divided them into three
main categories: 1) owner’s or firm’s characteristics; 2) firm's market orientation; 3) family
network variables. Although it is difficult to exactly place all the variables into the three
categories, category one includes an owner’s age, education, occupational background,
political participation (self-assessment), expenses on entertainment, firms’ operational years,
industry (manufacturing and export), location and management style.
Category two consists of five variables indicating a firm’s market orientation. It is
important to distinguish this category from the characteristics of individual firms because
market activities, or reliance on the market, are the most important alternative method for
entrepreneurs to make profits as opposed to the one relying on party connection. The more
Chinese capitalists rely on the market, the less important party connections are to a firm’s
performance. “Market demand entry” is coded one if the primary motivation of an owner’s
starting a firm came from increasing market demand. “Market sales” is coded one if a firm
is exclusively operating or selling products in the market. “Resource problems” is a 24-point
scale variable that tells the amount of difficulties that a firm has faced or been facing in
securing raw materials, water, electricity, land, technicians, marketing outlet, transportation
and other. It is based on respondents’ answers to the question, “how much difficulty has
your firm faced or is facing” in securing the eight resources (above mentioned)? Three
choices are given to respondents for each resource - (1) no difficulty, (2) some difficulties,
and (3) significant difficulties - and the answers for the eight resources were summed;
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
30
therefore, the variable has technically the maximum value of twenty-four. Higher values
represent higher levels of difficulties, which implies a firm’s engagement in a higher level of
market activities. “Non-governmental loans” and “no loan” are coded from zero to three.
“Non-govemmental loans” is coded three if a firm is financed by non-govemmental or
private banks for all of the three types of capital - start-up capital, fixed capital and floating
capital; coded two if financed for two of the three; coded one for one of the three; coded zero
if a firm has never been financed by non-govemmental banks. The same coding is applied to
“no loan.” These two loan variables are the indicators of a firm’s financial independence
from the party.
Category three consists of the variables indicating owner’s family or kin networks.
The category consists of the availability of loans from relatives or family members and
hiring of family or relative members in a firm. I distinguished this category from others,
considering the effect of highly family-oriented feature o f the Chinese culture and its
influence on Chinese business management.
The variables in category four are party connection variables that used in the
previous regression.
Table 3. Unstandardized Coefficients for the Regression of a Firm’s Performance on both Party
Connection and Non-Party Connection Predictors:
Category 1: Owner’s or firm’s characteristics
Owner’s age -.011*** (.003)
Owner’s education (1-6) .056 (.033)
Former engineer (d) .033 (.064)
Former unemployed (d) -.004 (.055)
Owner’s political participation (d) .141** (.055)
Owner’s expense on entertainment .160*** (.000)
Firm’s operational years .024** (.008)
Industry (manufacturing) (d) .172** (059)
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
31
Table 3 (continued)
Industry (export) (d)
Location (rural to urban, 1-5)
Province (coastal=l, inner=0)
One man decision-making (0-2)
Category 2: Market orientation
Market demand entry (d)
Market sales (d)
Resource problems (0-24)
.427*** (.076)
.006 (.025)
.101 (.055)
-.204*** (.030)
.128* (.056)
.019 (.055)
-.004 (.009)
Non-govemmental bank loans (0-3) .012 (.035)
No loan (0-3) .084** (.025)
Category 3: Family networks
Loans from relatives (0-4)
Hiring relatives as managers (d)
Hiring relatives as workers (d)
Category 4: Party connection
-.067** (.023)
-.158** (.055)
-.060 (.061)
♦Coefficients for the regression on
party-connection variables only
(from Table 2)
Former cadre background (d) .123* (.060) .122 (.063)
The N of relative/friends who -.037 (.020) -.011 (.020)
are cadres (0-5)
Recruited labor from state unit (d) .107** (.031) .149*** (.031)
Targeting state firms (d) .031 (.058) .062 (.060)
SELA member -.053 (.112) -.219 (.119)
PEA member .324** (.113) .293* (.121)
ACFIC member .455** (.134) .483** (.142)
CCP member .401** (.126) .247 (.133)
Democratic Party member .219 (.145) .172 (.155)
Friendship/Trade Club member (d) .339** (.112) .412** (.119)
The N of membership (0-6) -.226* (.097) -.149 (.103)
Party Support (merged) .228*** (.027) Bank loan . 1
(Party support and bank loan combined) Party support .0
Constant -.310 (.244)
Adjusted R2 .346
Number of cases 1106
(.023)
Notes: Standard Errors are in parentheses. R=.605.
“Owner’s Education” is a six-point scale: Higher values represent higher levels o f education.
“Owner’s political participation” is coded one if owner’s self-assessment level of political participation is lower
than the mean value (4.49) on a ten-point scale, which represents a higher level of participation; zero otherwise.
"Location” variable is a five-point scale from rural to urban: l=village, 2= township, 3= small city, 4= mid size
city and 5=big city.
“Province” is coded one if firms are in Fujian, Guangdong, Hainan, Hebei, Jiangsu. Liaoning, Shandong Zhejiang
Provinces, Beijing, Shanghai or Tianjin Cities; zero otherwise.
“One man decision-making” is coded two if an owner makes decisions both on important management matters
and on employee’s salaries or welfares; coded one if one of the two; zero otherwise.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
32
Table 3 (continued)
Category two variables are explained in the preceded paragraphs.
“Loans from relatives” is coded four if the three most important sources of start-up capital came from relatives;
coded two if two of the sources are from relatives; one if only one source; zero otherwise.
“Party Support ‘merged’” variable is created by taking factor scores of the two variable in the previous regression
model, “party support” and “received state bank loans.” because of a high correlation between the two (r =
.179***).
*p<.05; **p<.01; ***p.<001.
Table 3 shows that most of the patty connection predictors hold even after adding
non-party connection variables. Some of them, such as PEA membership, former cadre
background and CCP member, even increased their importance on performance. The new,
merged “party support” variable, which I created by taking factor scores of the former “party
support” variable with a twenty four-point scale and “received state bank loans,” also has a
statistically significant, strong effect on a firm’s performance (.228). These two variables
are merged for two reasons: they are highly correlated with each other (r=.179***) and both
the administrative bureau support and bank loans are direct party support provided for
entrepreneurs by the state. Although the effect of party support is not so strong as
membership in PEA, ACFIC or Clubs, it still surpasses the effects of most of the non-party
connection variables, except for export industry.
One interesting change from the previous regression is that the Communist Party
membership (CCP member) drastically increased its importance on firm’s performance.
This change suggests that the CCP member variable is strongly related to one or some of the
non-connection variables. There also is a possibility of the reversed causality that the
owners of profitable firms have become members of the CCP. In either case, the variable
should be considered separately from other membership variables because it does not seem
to share the same characteristics as membership in the official business associations like
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
33
PEA or ACFIC, which have maintained the same degree of importance on firm’s
performance even after non-connection variables are added.
In non-party connection variables, engaging in the export or manufacturing is the
single most important factor affecting firm’s profitability. Owner’s political participation
(self assessment) also has a moderate effect. This variable was originally coded on a ten-
point scale, but later recoded to a dichotomous variable of one (high level of participation) or
zero (low level). Although the variable could be placed in category four (the party
connection variables), being high on the self-assessment scale does not mean that owners
have strong, profitable or even corruptive connections to the party. In the Chinese context it
implies that the owner is being a good and honest citizen or entrepreneur who maintains
appropriate political attitude by supporting the government.
Another variable that affects performance is owners’ entertainment expenses.
Although these expenses could be used for exploiting party connections, there is a possible
tautology that the owners of profitable firms tend to use more money on entertainment,
which may positively affect their firms’ performance. In terms of market orientation,
“market demand entry” and “no loan” have positive effects on performance. Despite their
moderate effects, the two variables’ contributions to performance suggests that it still is
possible for Chinese capitalists to make profit without relying on party connections for
financial assistance. On the other hand, owners’ age, one-man decision-making style and all
the family network variables have negative effects on performance.
More consideration on the meaning and implication of these statistically significant
effects on performance will be given after examining the determinants of party support and
association membership.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
34
The Determinants of Closer Party Connections
In this analysis, I reverse the causality established above and ask if better
performance is more likely to result in receiving party support and becoming a member of
business associations. In other words, are better performing firms more likely to be
approached by the state? A firm’s party connection is measured by two ways: party support
and association membership. Although both indicate a firm’s or owner’s relationship to the
party, the previous research does not specify the clear relationship between the two mainly
because these two types of state influences on private enterprises are mostly observed
separately by different scholars. CCP membership and cadre background could also be
considered important manifestations of a firm’s party connection, the effects of these two
variables on firms’ performance in the previous regressions are not strong or stable enough.
Therefore, two new regression models - one’s dependent variable is party support and the
other’s is association membership — are created in this analysis. Although the main focus of
the analyses is the effect of a firm’s performance on party connection, independent variables
are not limited to a firm’s performance alone. To examine how the variables other than
performance influence party connections is also important for investigating the process of
alliance formations between private firms and the party. Therefore, all the relevant variables
used in the regressions of firms’ performance are maintained and the research questions are
rephrased to: What are the determinants of party support and association membership?
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
35
Analysis 3
What are the determinants o f receiving party support including official bank loans?
Hypothesis: Firms enjoying better performance tend to receive a larger amount of party
support.
Dependent Variable: Party support (administrative support and official bank loans)
Table 4. Unstandardized Coefficients for the Regression of Party Support on Ail the Predictors:
Category 1: Owner’s or firm's characteristics
Owner’s age .008* (.003)
Owner’s education (1-6) .004 (.036)
Former engineer (d) .034 (.071)
Former unemployed (d) .110 (.061)
Owner’s political participation (d) .192** (.061)
Owner’s expense on entertainment .007 (.000)
Firm’s operational years .005 (.009)
Industry (manufacturing) (d) .091 (.066)
Industry (Export) (d) .091 (.086)
Location (rural - urban, 1-5) -.143*** (.027)
Province (coastal=l, inner=0) -.272*** (.061)
One man decision making (0-2) -.074* (.034)
Category 2: Market orientation
Market demand entry (d) -.039 (.062)
Market sales (d) .170** (.061)
Resource problems (0-24) .016 (.010)
Non-govemmental bank loans (0-3) .016 (.039)
No loan (0-3) .062* (.028)
Category 3: Family networks
Loans from relative (0-4) -.014 (.025)
Hiring relatives as managers (d) -.012 (.061)
Hiring relatives as workers (d) -.079 (.068)
Category 4: Partv connections
Former cadre background (d) -.086 (.066)
The Ns of relative/friend who .040 (.023)
are cadres (0-5)
Recruited labor from state unit (d) .028 (.035)
Targeting state firms (d) .058 (.065)
SELA member -.116 (.124)
PEA member -.339** (.126)
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
36
Table 4 (continued)
ACFIC member
CCP member
Democratic Party member
Friendship/Trade Club member
The Ns of membership (0-6)
-.245 (.150)
.035 (.141)
-.287 (.161)
-.127 (.125)
.177 (.108)
Firms’ performance .282*** (.034)
Constant
Adjusted R2
Number of cases
-.023 (.271)
.191
1106
Notes: Standard Errors are in parentheses. R=.464.
*p<-05; **p<.01; ***p.<00l.
In this analysis, I used the new, merged “party support” variable created in Analysis
2 as a dependent variable. Table 4 shows that the hypothesis is confirmed: the most
influential variable affecting party support is a firm’s performance (.282).
There are, however, two unexpected findings. First, association membership
variables, which strongly contributed to better performance or higher profitability of firms
(see Table 3), have negative effects on party support. Especially, it is surprising to find that
PEA membership has a statistically significant negative effect (-.339) on party support. This
finding undermines the corporatist argument that PEA membership, especially at the local
level, is very important for receiving administrative support or bank loans. Why does it have
such a strong negative effect? The strong positive effects of association membership on a
firm's better performance suggests that associational support is important for private
businessmen for their business success, but not for getting party support. If membership
does not lead to party support, what are the functions of the association? This arises a
possibility that firms that have received party support are different from firms that belong to
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
37
the associations, although both are the beneficiaries of party connection and accomplish
better performance. This possibility will later be tested and analyzed through explanatory
factor analysis.
Secondly, the two non-party connection variables — “location” and “province” —
have strong negative effects on party support. It means that firms operating in rural areas -
or village or township levels — or in the inner and less-developed provinces are more likely
to get party support or official bank loans. The result is consistent with the arguments of
local corporatism or “neo-localism” that rural industrialization has been led by the
“entrepreneur minded” local governments and their strong alliances with collective and
private enterprises (Liu 1992; Nee 1992; Odegaard 1992; Oi 1995; Walder 1995). If this
finding is considered with the relatively high coefficient of “market sales” (. 170) on party
support, the possibility of the realization of “market-preserving federalism” would not be
denied. On the other hand, this finding undermines Wank’s argument that stronger alliances
are more prevalent in more industrialized coastal regions like Xiamen, Fujian Province
(Wank 1996). Contrary to his argument, firms operating in urban, more industrialized
coastal cities or provinces have less likelihood of getting bureaucratic support or official
bank loans compared with rural firms.
In terms of other non-party connection variables, owners’ “age,” “political
participation,” and “no loan” variables have strong effects on party support. Although the
three variables seemingly unrelated each other, they might be in the same construct.
Considering the hostile environments that had surrounded Chinese private enterprises for a
long time in the past, older and relatively successful entrepreneurs may know how to survive
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
38
in such an environment without relying on official loans, while maintaining good political
attitude. To test this speculation, I run factor analysis, adding the mysterious “PEA
member” variable that has a huge negative effect on party support. If PEA membership does
not function as a means for getting administrative support, it may function as the evidence of
political correctness, by which entrepreneurs could show the authorities that they are
“politically correct capitalists” who belong to the appropriate official business association.
Table 5 shows that, despite the smaller loadings of “no loan” and “PEA member,” the four
variables narrowly share the Factor l.1 I labeled this factor “self-reliant survivor.” The
factor’s unstandardized coefficient on party support (bivariate regression) is (.137), which is
statistically significant.
Table S. Factor Loadings of the Four Non-Party Connection Variables:
Factor 1 Factor 2
Age .610 -.477
Participation .653 -.360
No loan .471 .549
PEA member .442 .606
Note: Eigenvalue: Factor 1 = 1.215, F acto r2 = 1.026
Analysis 4
What types o f firms are more likely to belong to the official business associations?
Hypothesis: Firms that have enjoyed better performance are more likely to belong to the
PEA, the ACFIC, the Friendship Club and the Trade Club.
Dependent Variable: Association Membership
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
39
The dependent variable, “association membership,” is created by taking factor
scores of the three association membership variables that have strong effects on a firm’s
performance: namely, “PEA member,” “ACFIC member” and “Friendship/Trade Club
member” (see Table 3). “SELA member” and “Democratic Party member” are excluded
because of their negative and insignificant effects on performance. I also excluded “CCP
member” because of its negative factor loading on the factor shared by the other three items
(see Table 6). Excluding the “CCP,” I run a factor analysis with the three variables (Table
7), and saved its factor scores, which became the dependent variable, “association
membership.” As noted earlier, I maintained all the independent variables I used for the
previous regression on party support, except for the three association membership variables.
The previous dependent variable, the merged “party support,” is again divided into “getting
bank loan” and “bureaucratic support," in order to have a clearer picture of the relationship
between party support and association membership.
Table 6. Factor Loadings of the Four Membership Variables:
Factor 1 Factor 2
PEA
ACFIC
Clubs
CCP
.545 -8.863E-02
.713 -5.439E-02
.489 .655
-.297 .785
Table 7. Factor Loadings of the Three Membership Variables Excluding CCP:
‘Association
membership"
PEA
ACFIC
Clubs
.522
.678
.627
Because of the smaller loadings of the two items, I tried a one-factor-solution. However, all the
factor loadings and eigen value of Factor 1 remained the same.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
40
Table 8. Unstandardized Coefficients for the Regression of Association Membership on All the
Predictors:
Category 1: Owner’s or firm’s characteristics
Owner’s age .006* (.003)
Owner’s education (1-6) .083* (.037)
Former engineer (d) -.101 (.073)
Former unemployed (d)
.194**
(.062)
Owner’s political participation (d) .192*** (.062)
Owner’s expense on entertainment .007* (.000)
Firm’s operational years .033*** (.009)
Industry (manufacturing) (d) -.190** (.067)
Industry (Export) (d) .188* (.089)
Location (rural - urban, 1-5) .037 (.028)
Province (coastal=l, inner=0) .136* (.063)
One man decision making (0-2) -.069* (.035)
Category 2: Market orientation
Market demand entry (d) .016 (.064)
Market sales (d) .030 (.063)
Resource problems (0-24) .022* (.010)
Non-governmental bank loans (0-3) .069 (.040)
No loan (0-3) .040 (.028)
Category 3: Family networks
Loans from relative (0-4) .044 (.026)
Hiring relatives as managers (d) -.077 (.063)
Hiring relatives as workers (d) .116 (.069)
Category 4: Partv connection
Former cadre background (d) .055 (.068)
The N of relative/friends who .066 (.023)
are cadres (0-5)
Recruited labor from state unit (d) -.024 (036)
Targeting state firms (d) .184** (.066)
SELA member .021 (.062)
CCP member -.151 (.089)
Received state bank loan (0-2) -.085** (.025)
Party support (0-24) .008 (.006)
Firms* performance .141*** (.036)
Constant -1.340 (.273)
Adjusted R2 .136
Number of cases 1106
Notes: Standard Errors are in parentheses. R=.400.
*p<.05; **p<.01; ***p.«X)l.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
41
Table 8 shows that one of the most influential predictors of official business
association membership is firms’ performance. Therefore, the hypothesis is confirmed.
However, performance is not the most influential variable: category one variables (owners’
and firms’ characteristics) — owners’ higher age, higher level of education and political
participation, and firms’ longer years of operation — positively affect membership. On the
other hand, the effect of the original “party support” variable, which tells the amount of
administrative support that each firm is receiving, is statistically insignificant. Here a
mutually exclusive relationship between party support and association membership is
confirmed.
Export firms and firms operating in coastal provinces are more likely to be
association members. Firms targeting state owned firms — or selling their products mainly
to the state enterprises - are more likely to belong to the associations. This variable,
“targeting state unit,” is the only one party-connection variable that has a high positive effect
(.184) on association membership.
An interesting and unexpected finding is among negative effects. Firms “getting
bank loan” and engaging in “manufacturing” are less likely to be association members.
“CCP members” are also less likely to be association members, although it is statistically not
significant. I will examine whether or not these seemingly unrelated negative variables —
“CCP members,” “getting bank loan,” and “manufacturing” — share something in common
in the next analysis.
Through the four regression analyses, the two sets of mutual influence are found
between firms’ party connection and firms’ performance. First, firms’ better performance
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
42
influences the availability of party support or official bank loans, and the latter also has
positive influence on a firm’s performance. Similarly, between performance and association
membership exists mutual positive influence. Firms’ performance positively affects
association membership - a combined factor of PEA, ACFIC and Friendship/Trade Clubs
member - and the latter also has a strong positive effect on firms’ performance.2
No relationship exists, however, between party support and association membership.
The two cause firms’ performance independently; therefore, relying on party support and on
association membership are two different ways of making profit for entrepreneurs. They are
also the two different types of party-business alliance.
2 These mutual influences may indicate a possible tautology: party support or association membership affects
firms’ performance but a portion of party support or association membership is affected by firms’ performance. I
performed a two-stage least squares procedure in order to examine the problem. I created an instrumental
variable for firms’ performance by regressing performance only on variables that have statistically significant
effects, and by saving the predicted values of the regression. I then regressed party support on all the predictors,
replacing firms’ performance with its instrumental variable, or firms’ performance prime. I also created
instrumental variable for party support and regressed performance on all the independent variables by replacing
party support with its prime variable. I repeated the same process for the relationship between performance and
association membership. As a result. I found that a mutual causation exists between performance and association
membership but not between performance and party support. The performance prime variable has a statistically
significant effect on party support but the effect of party support prime on performance is not significant. This
means that the significant portion of party support is affected by firms’ performance, while the opposite is not so.
Party support could be considered a reward that a firm receives for its good performance. On the other hand, the
association membership prime has statistically significant effect on performance and vise versa. The result of the
two-stage least squares is summarized below.
• Between performance and party support
(.437*) -
Performance Party support
-(.2 1 6 )
• Between performance and association membership
(3.928***) —
Performance Association membership
-(.5 1 5 * )
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
43
Categorizing the Determinants
Before showing the whole picture of the mutual causation and influence among
better performance, party support and association membership, I will categorize the
determinants of each in order to find and clarify different types of party-business alliances
and the relationship between party connection and non-party connection variables.
For this purpose, I attempt, through explanatory factor analysis, to find clusters or
constructs in the major determinants of each dependent variable. Table 9 combined the
regression results of Analysis 2, 3 and 4, for comparison purposes.
Table 9. Unstandardized Coefficients for the Regressions of Firm’s Performance, Party
Support and Association Membership on All the Predictors:
Association
______________________________ Performance Party Sunnort Membership
Category 1: Owner's or firm's characteristics
Owner's age -.011"* .008* .006*
Owner's education (1-6) .056 .004 .083*
Former engineer (d) .033 .034 -.101
Former unemployed (d) -.004 .110 -.194*'
Owner's political participation (d) .141" .192" .192*'
Owner's expense on entertainment .160*" .007 .007*
Firm's operational years .024” .005 .033*'
Industry (manufacturing) (d) .172" .091 -.190*’
Industry (export) (d) .427*** .091 .188*
Location (rural to urban, 1 -5) .006 -.143*" .037
Province (coastal=1, inner=0) .101 -.272*" .136*
One man decision-making (0-2) -.204*" -.074* -.069*
Category 2: Market orientation
Market demand entry (d) .128* -.039 .016
Market sales (d) .019 .170" .030
Resource problems (0-24) -.004 .016 .022*
Non-govemmental loans (0-3) .012 .016 .069
No loan (0-3) .084" .062* .040
Category 3: Family networks
Loans from relatives (0-3) -.067’* -.014 .044
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
44
Table 9 (continued)
Hiring relatives as managers (d) -.158** -.012 -.077
Hiring relatives as workers (d) -.060 -.079 .116
Cateoorv 4: Partv connections
Former cadre background (d) .123* -.086 .055
The N of relatives/friends who are cadres (0-5) -.037 .040 .066
Recruited labor from state unit (d) .107** .028 -.024
Targeting state firms (d) .031 .058 .184**
SELA member -.053 -.116 .021
PEA member .324** -.339** —
ACFIC member .455** -.245 - -
CCP member .401 * * .035 -.151
Democratic Party member .219 -.287 —
Friendship/Trade Clubs member .339** -.127 —
The N of association membership (0-6) -.226' .177 —
Firms' performance — .282*** .141***
Party Support + Received State Bank loan .228*** — .008 (party support only)
-.085**(bank loan only)
Constant -.310 -.023 -1.340
Adjusted R2 .346 .191 .136
Number of cases 1106 1106 1106
Firms’ Performance
Nineteen variables have statistically significant effects on firms’ performance. First,
I divided them into two, negative and positive effects.3 Negative effects are: age, one-man
decision-making, loans from relatives, hiring relatives as manager, and the number of
association membership. Through factor analysis, I found one factor, named “exclusives,”
among the three of them - age, one-man decision-making and hiring relatives as managers
(see Table 10). The number of association membership and loans from relatives do not have
satisfying factor loadings and failed to fit the factor. The label, “exclusives,” suggests the
31 excluded party support and “received state bank loan” from this categorization because of their
relatively strong dependence on firms’ performance. See footnote 2.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
45
type of firms or owners that manage business affairs on their own or within close family or
kin networks.
Table 10. Factor Loadings on “Exclusives” Factor:
“Exclusives” (negative effects)
Age .651
One-man decision-making .587
Relative manager .668
Similarly, I found three other clusters, or factors, among positive effects, although
some of their factor loadings are not satisfying. They are “survivors,” “association
members,” and “cadre connections” (see Table 11).
Table 11. Factor Loadings of the Three Factors Affecting Firm’s Performance:
“Survivors” (positive effects)
No loan .481
Operational years .752
Political participation .686
“Association Members” (positive effects)
PEA member .522
ACFIC member .678
Friendship/Trade Club .627
member
“Cadre Connection” (positive effects)
Former cadre .740
CCP Member .530
Labor from state unit .563
“Survivors” is similar to the “self-reliant survivor” factor that positively affects party
support (see Table 5), although the latter has “age” instead of “operational years,” and
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
46
includes PEA member.4 Despite the lower loading of “no loan,” the factor represents better
performing entrepreneurs who maintain good political attitudes but are not closely related to
the Party. “Association members” are the same factor as association membership, the
dependent variable of Analysis four. The last factor, the “cadre connection,” is the only one
factor indicating firms' party connection. Despite statistically insignificant (.219) effect,
CCP member is incorporated into this factor because former cadres are mostly CCP
members, and without cadre’s assistance, it is almost impossible for private enterprises to
hire employees from state unit. If this factor is justified, “cadre connection” could be
another type of party-business alliance, in addition to party support and association
membership.
Party Support
O f the determinants of party support, only a fraction of the “survivor” construct is
found among “age” and “political participation.” Since the correlation between the two is
r=.150,1 combined the two variables by taking factor scores. Other variables do not seem to
share any common factor.5 The “self-reliant survivor” found in the previous analysis (see
Table 5) is eliminated because it contains the item having a negative effect on party support,
namely, PEA member.
4 This factor is eliminated in the next section because it contains both positive and negative effects.
5 Finns’ performance is not included in this categorization.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
47
Table 12. Factor Loadings of the Items Affecting Party Support:
(Positive effects)
Factor 1 Factor 2
Age .715 -.251
Political participation .715 .169
Market sales -6.457E-02 .915
No loan .389 .303
(Negative effects)
Factor 1 Factor 2
Location (u-r) .691 -.267
Province (d) 4.927E-02 .948
One man decision-making -.643 -3.941 E-02
PEA member .541 .208
Association Membership
Three factors are found: “survivors” and “fore-runners” among positive effects, and
“non-associational good performers” among negative effects.6
Table 13. Factors and Factor Loadings of the Items Affecting Association Membership:
“Survivors” (Positive effects)
Age .659
Political participation .652
Years of operation .721
“Forerunners” (Positive effects)
Education .703
Export .632
Resource problems .528
“Non associational good performers” (Negative effects)
Manufacturing .608
Received state bank loan .778
CCP member .489
“Survivors” represents similar characteristics to the factors affecting both firms’
performance and party support. “Fore-runners” may be the entrepreneurs who
' Finn’s performance is not included in this categorization.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
48
have led China’s export-led economic growth. In the reform era, many ambitious, young
and highly educated Chinese have gone into business, rather than choosing political careers,
and many of them have been successful. They also tend to be risk-averse and often
pragmatists. Not only may association membership benefit them but the associations may
also be benefited from having them as members. The party side has high expectations on
these successful, well-educated young entrepreneurs because of their contributions to the
country’s further economic growth; therefore, it may have enough incentive to recruit them
into its own corporatist structure or to the party itself (Dickson 2000). One of the items in
the factor, resource problems, does not have a high loading, but it is possible to argue that
export firms or “fore-runners” may often encounter resource problems because associational
assistance may not be so “practical” as support or protection provided by local government
or individual party officials in exchange for payoffs or gifts.
The third factor, “non-associational good performers,” is an interesting factor
consisting of seemingly unrelated items each other - manufacturing industry, the availability
of state bank loans, and CCP membership. The factor is found among the negative effects,
which means that firms fitting this factor are less likely to be association members. It is
interesting that all the three constituting variables have strong positive effects on
performance. This finding suggests that these firms have good party connections - the
availability of bank loans and CCP membership - and enjoy better performance but they
have done so bypassing associations.
However, it is difficult to justify this factor because of the low loading of CCP
member. Higher loadings on manufacturing and bank loans compared to the loading on
CCP member raises a possibility that firms fitting this factor are simply manufacturing firms
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
49
that enjoy high profitability and, in turn, receive more bank loans. Official Chinese banks,
no matter how much their business decisions are influenced by political concerns, may still
lend money to profitable firms.
Four Routes to Successful Business in China?
I will regress party support, association membership and performance, again, on all
the extracted factors above and other statistically significant determinants that are excluded
from any of these factors. I will then analyze how firms’ party connection and performance
mutually cause each other, in relation to the different types of party-business alliances.
Table 14 submits the results of the regressions of three dependent variables on the
categorized determinants.
Table 14. Unstandardized Coefficients for the Regressions of Party Support, Association
Membership and Firm’s Performance on the Reorganized Predictors:
Party Support
F ‘Survivor* .145***
Std. Error
.029
Market sales .150" .057
Firms' performance .298"* .030
No loan -.033 .027
Location (u-r) -.146*" .023
Province (d) -.300*” .058
One man d-making -.116*" .033
PAE member -.150" .057
(Constant) .846*** .115
Adjusted R .181
R .432
Association Membership
F "Survivors” .212***
Std. Error
.030
F "Fore-runners" .153*** .031
Province (d) .117* .059
Targeting state firms .201** .063
Firms’ Performance .153"* .033
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
50
Table 14 (continued)
'Non associational good -.174*** .030
performers"
Former unemployed -. 182” .060
Entertainment expense -.066* .000
One man d- making -.075* .034
(Constant) -.010 .081
Adjusted R .136
R .378
Firms’ Performance
Std. Error
“Survivors” .142” * .027
'Association' .271*” .038
'Cadre connection* .174*** .026
Manufacturing .206*** .052
Export .450” * .075
Entertainment expense .169” * .000
Market demand entry .116* .055
Bank loan + Party support .230” * .026
“Exclusives” -.254” * .026
Loans from relative -.061 ” .022
The N of membership -.196*” .037
(Constant) .221* .097
Adjusted R .332
R .582
Notes: F = factors. "Entertainment expense” only is standardized coefficient.
The major determinants of party support are “survivors,” market sales and better
performance. If these could be considered the conditions for receiving party support, the
selections of firms receiving bureau support or bank loan are made based on very capitalistic
criteria. Although scholars argue the importance of the assistance of local branches of SELA
or PEA, or cadre connections for getting local bureau support (Odegaard 1992; Nevitt 1996),
party connection variables do not have any statistically significant positive effect, and party
support is more likely to be provided for firms operating in the market and enjoying better
performance than those who have cadre or associational connections. More specifically,
although Unger and Nevitt argue that the local branches of the SELA or the PEA function
well and act more on behalf of local private firms (Nevitt 1996; Unger 1996), the strong
negative effect of PEA suggests local government assistance go directly to firms.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
51
Odegaard’s view of a “predatory” local state also does not fit well with the regression
results, although it is possible to argue that the aged entrepreneurs - a component of
“survivor” factor — use their guanxi to exploit official ties and receive party support. Rather,
an image of entrepreneurs drawn from this regression result is that older and politically
correct entrepreneurs, or “survivors,” have accomplished certain business success and, as a
result of their accomplishment, come to receive bank loans or other official support. This
image is reinforced by the result of the two-stage least squares above: a significant portion of
party support is caused by firms’ performance, while performance is relatively independent
from party support’s influence. This suggests that party support alone is less likely to lead to
a firm’s better performance, unless the firm already has accomplished a certain level of
business success. This finding is relatively consistent with Liu’s argument that the economic
reform or local industrialization has been “initiated from below” and “originated from the
coincidence of interest” between private entrepreneurs and local cadres (Liu 1992: 136). An
image of local states is more likely to be “developmental” or “entrepreneurial,” rather than
“predatory.” The negative effects of location and province suggest that this type of local
state is more common in more rural - or township or village levels — and in inner, less
industrialized provinces. Considering the positive effect of market sales, the development of
local corporatism and the increasing marketization at township and village levels or inner
provinces may lead to “federalism, Chinese style” of governance (Nee 1992; Montinola,
Qian and Weingast 1995; Oi 1995; Walder 1995).
On the other hand, firms operating in more industrialized provinces or urban areas
are less likely to get party support or bank loans than rural firms. This raises the possibility
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
52
that urban firms may develop different types of party connections, such as association
membership or clientelist cadre connections. The major positive determinants of association
membership are “survivors,” “fore-runners,” a firm’s performance and “targeting state unit.”
Unlike the case of party support, “province” has a positive effect on association membership.
This suggests that the official business associations are more important, or function better, in
more industrialized, urban, and coastal regions (Unger 1996; Nevitt 1996). If so, the
positive effect of “fore-runners” could make sense. As opposed to more marketized — or
“local goverament-led-industrialized”- rural or inner areas, the development of coastal
provinces might have been led by export firms or highly educated entrepreneurs - the
components of “fore-runners,” who have been assisted by official business associations like
the ACFIC. These official associations in urban, industrialized regions may play roles
similar to the local corporatist states in rural or inner provinces in terms of assisting private
firms. The associations may not assist firms through bank loans or direct bureau support but
may provide indirect support, such as lobbying for the implementation of pro-private
business policies through their political activities or providing networking opportunities for
private entrepreneurs (Unger and Chan 1995). The survey of private enterprises data I am
using for this analysis could be one of such attempts made by the ACFIC as a part of their
political activities.
In relation to the coastal-inner provincial differences, the strong positive effect of
“targeting state firms” (.210) on association membership is interesting. It suggests that firms
not mainly selling their product in the market are more likely to be association members,
which shows a contrast with the strong effect of “market sales” (.150) on party support. This
could be interpreted as evidence for marketization going ahead in local corporatist empires
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
53
rather than in coastal provinces. Overall, associational activities and their control and
accommodation functions seem to greatly differ, as Unger argues, depending on regions or
administrative levels (Unger 1996). The four associations — the PEA, the ACFIC, Lian yi
hui and Tongye Gonghui, seem to be functioning well for a particular type of capitalist in
coastal provinces.
“Survivors” is also affecting association membership. It has a stronger effect (.212)
on association than on party support (. 145). “Survivors” factor also has a positive effect on a
firm’s performance (.142). However, these three “survivors” factors contain slightly
different items, although they embody long years of operation and good political attitudes.
The breakdowns of each “survivors” factor are as follows:
1) “Survivor” for party support: age + political participation (2 items).
2) “Survivor” for association membership: age + political participation + the years
of operation (3 items)
3) “Survivor” for firms’ performance: no loan + political participation + the years of
operation (3 items)
The difference in the component items may cause the difference in effects, but all
the “survivors” factors positively cause better performance: two of them indirectly through
association membership and party support, and one directly. Here, at least, the three
different routes that bring Chinese private entrepreneurs to business success are found: party
support, association membership and “survivors.”7
7 Despite the insignificant effect of party support prime on performance in the two-stage least squares
(see footnote 2), party support still contributes to entrepreneurs’ profit if firms are already successful
(see Table 3).
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
54
The fourth route could be “cadre connections,” the factor affecting better
performance. The items consisting of the factor are “former cadre background,” “recruiting
labor from state unit” and “CCP member.” The factor relatively fits the clientelist argument
that states: 1) that former cadres, most of whom are party members, start their own
businesses using connections developed in their cadre era, or 2) that well-connected former
cadres have been offered management positions in newly established private firms (Wank
1995b). However, the “former cadre background” variable has very little to do with party
support and association membership. It has a strong positive effect only on a firm’s
performance. This suggests that there is another “party connection route” leading Chinese
capitalists to business success, in addition to the association membership route and party
support-bank loan route.
The “non-associational good performers” are another type of capitalist who is
suspected of developing a different party connection route leading to business success. The
factor is a combination of manufacturing, bank loan and CCP member. Each component
item of the factor contributes to a firm’s profitability but has a statistically significant
negative effect on association membership except CCP member (see Table 9). As a factor it
has almost the same degree of negative effect on association membership as “former
unemployed,” a symbol of social outcast status. If this factor is justified, firms fitting this
factor may have developed a different type of party connection from the ones developed by
the firms relying on associations, party support and cadre connections. They are the
beneficiary of neither local party support nor associational support but still accomplish better
performance and seem to have good connections to the party. It is, however, difficult to
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
55
justify this factor. Considering the availability of bank loans, the non-associational good
performers could possibly be a deviant type of “party support” beneficiary, but
manufacturing and CCP member variables do not affect party support. Or, as noted earlier,
the non-associational good performers could simply be manufacturing firms getting bank
loans mainly due to their higher profitability. There are two reasons for the difficulty in
determining this factor. One reason is that the factor was extracted from the variables
negatively affecting association membership, although all the items in the factor have
positive effects on performance. The second reason is the strange behavior of the CCP
member variable. The variable has low factor loadings of (.480) on “non- associational” and
(.530) on “cadre connections” factors, respectively. It did not fit the “association
membership” factor and was therefore excluded from it in Analysis 4. Still, it in isolation
has a huge positive effect (.401) on performance, a negative effect (-. 151) on association
membership, and almost has no effect on party support (see Table 9). One possible reason
for this conflicting effect is that the owners of profitable firms, as some scholars have
reported, have been asked to join the Communist Party (Dickson, 2000) after their business
success. If this is the case, the CCP member variable would be better eliminated from both
factors and the probability of getting CCP membership would be better analyzed through
logistic regression procedure. The existence of tautological relation with firms’ performance
should also be tested.
The entertainment expense variable also behaves strangely. It has a positive effect
on performance. It is, however, difficult to determine whether entertainment expense is used
for exploiting official connections or whether the owners of profitable firms simply are
enjoying their lives. The variable, on the other hand, has a negative effect on association
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
56
membership, although it has a small positive effect on membership in the first regression
(see Table 8). This discrepancy may be caused by a technical problem: the variable is in the
real amount of expense in yuan, Chinese currency, and is not logged. If, however, the
negative effect on association is true, the possible reason is that association members do not
need to exploit party connections because associations themselves serve as good official
connections. Or potential members do not need to entertain officials because their own
relatively privileged status, deriving perhaps from higher education or growing export
business, attracts officials’ attention anyway.
Finally, factors or variables that affect all the three dependent variables in similar
ways, except for minor deviations, are “survivors” (all positive), “one-man decision-making”
(all negative), and family network variables in category three (negative or no effect).
“Survivors” is the only one route through which Chinese capitalists accomplish better
performance or higher profitability independently from the party.8 One-man decision
making style and reliance on family or kinship networks tend to isolate entrepreneurs from
both party influence and business success.
The “exclusives” - a factor that combines old age of owners, one-man decision
making style and hiring of managers from their extended family members - has a
statistically significant negative effect on profit (-.254), and “loans from relatives” also
negatively affects a firm’s performance. These family network variables are not related to
8 However, party support could be considered a relatively independent route as is the “survivors”
route. As footnote 2 shows, party support is a reward provided by the state to firms achieving better
performance, and party support itself does not create wealth even if wealth, or good performance,
invites more party support. In other words, party support is less likely to be provided to poorly
performing firms; therefore, it is important for firms to first be profitable by their own efforts as the
“survivors” are.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
57
party support or association membership. This finding could be interpreted as evidence for
family networks serving as an alternative mechanism or counter force to bureaucratic
control, but it does not bring prosperity to firms. Rather, these firms seem to be
marginalized or isolated because their low profitability does not much contribute to the
country’s economic growth. As the corporatists claimed, many of these firms, as well as the
SELA member firms, could really be “poor resource bases” for entrepreneurial-minded or
self-interested party officials in the reform era (Nevitt, 1996).
V. Conclusion
Through the multiple regressions and explanatory factor analysis, the existence of
mutual influence and causation between better performance and party support, and between
better performance and association membership are confirmed. And, at least, four roughly
categorized patterns or routes through which Chinese capitalists reach business successes
emerged: “Survivor” route, associational assistance, local government’s support in forms of
administrative bureaus support and bank loans, and “cadre connections.” The relationship
among the four patterns, in relation to the mutual causation and influence, is summarized in
Figure 1. The large portion of the business success of the Chinese private enterprises owes
to party connections. Except “survivors” (Pattern 1), successful enterprises are the
beneficiaries of direct party support including bank loans (Pattern 2), of associational
assistance (Pattern 3), or of cadre connections (Pattern 4). These four patterns are the
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
58
important determinants of firms’ better performance. Party support and associational
assistance are mutually exclusive. But “survivors" cause both party support and association
membership and also independently cause better performance. And “exclusives” exist as an
isolated group, mostly devoid of state ties and relying largely on family or kinship networks.
Figure 1. Mutual influence and causation among Party Support, Firms’ Performance and
Association Membership, and Several Patterns of Firms’ Business Successes.
‘Survivor” (PI) — » Party Support/Bank Loan (P2) < — Rural area (township/village
levels)
< — Less industrialized province
I < — Market sales
“Survivor” (PI) — » Better Performance < — “Cadre connections” (P4)
< — Industry (manufacturing or export)
< — (“Non-associational good
performers” (P2))?
t 1 « — (CCP member)?
“Survivor” (PI) — * ■ Association Membership (P3) < — Coastal province
«- “Fore-runners”
< — Targeting state firms
Excluded group---------------
Reliance on family and kinship networks / One-man decision-making style
Notes: All the arrows are positive effects. P= pattern, and their numbers are in parenthesis. | = mutual
influence. “Party Support/Bank Loan” and “Association Membership” are mutually exclusive.
Patterns 2, 3 and 4 relatively fit the findings of the existing literature focusing on the
party-private business alliances. Pattern 2 corresponds to local corporatist or “neo-
corporatism” literatures developed by Nee, Liu, Odegaard, Walder or Oi, although I could
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
59
not determine the affiliation of the “non-associational good performers’’ in this pattern.
Pattern 3 confirms some arguments made by the scholars focusing on associational activities,
such as, Unger and Chan, Pearson or Nevitt. Pattern 4 roughly fits the clientelist approach
that focuses on the interactions and the patron-client ties between party officials and private
entrepreneurs. However, the existence of “survivors,” which symbolizes patient, politically
correct and a relatively self-sufficient type of entrepreneurs’ attitudes, seems to be largely
overlooked by the existing qualitative literature on Chinese private business.
In future research, I would like to investigate the different patterns of the alliances
further. One of my interests is to consider whether my categorizations, such as “fore
runners,” “cadre connections” or “non-associational good performers,” are appropriate. I
would like to test the reliabilities of these factors extracted through explanatory factor
analyses, by creating confirmatory factor models, and by incorporating the models into a
structural equation model with path diagrams. By doing so, I may be able to capture more
precise pictures of the complex nature of the state-business alliances and their formations. If
the reliabilities of the factor or pattern categorizations in this research are confirmed, I would
also like to investigate each factor or pattern into details. Especially, I am interested in the
two groups that maintain independence from the party: the isolated group, “exclusives,” that
have conducted business within family or kin networks or through self-reliance, and
“survivors.” More detailed examinations of these two groups are important because they are
the only social forces in China that have relatively successfully conducted businesses while
maintaining some distance from the party.
At the same time, I would also like to focus more on the regional diversity of the
alliances. In this research I only made distinctions between rural-urban and inner-coastal
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
60
provinces, but there could be more ways to distinguish firms by location, such as, south
versus north China or opened versus closed cities, and so on. By so doing, I could make
better connections between the survey data and literatures developed through field research
conducted in various places in China. Firms could also be categorized by other criteria, such
as, the differences in industries, main affiliated associations or the years of operation, and,
then, the corresponding differences in the alliances, if any, could be compared.
Finally, it is also my intention to investigate how the alliances have changed as the
economic reform continued and the Chinese economy was incorporated into the international
economy toward the end of 1990s, by analyzing the data collected in the mid or late 1990s.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
61
Bibliography
Baum, Richard and Alexei Shevchenko. 1999. ‘T he ‘State of the State.’” In The Paradox o f
China’ s Post-Mao Reforms, eds., Merle Goldman and Roderick Macfarquhar, 333-362.
Harvard University Press.
Blecher, Marc. 1991. “Developmental State, Entrepreneurial State: The Political Economy
of Socialist Reform in Xinju Municipality and Guanghan County.” In The Chinese State in
the Era o f Economic Reform: The Road to Crisis, ed. Gordon White, 265-291. Sharpe.
Bian, Yanjie. 1994. “Guanxi and the Allocation of Urban Jobs in China.” The China
Quarterly 140 (December):971-999.
Bruun, Ole. 1995. “Political Hierarchy and Private Entrepreneurship in a Chinese
Neighborhood.” In The Waning o f the Communist State: Economic Origins o f Political
Decline in China and Hungary, ed. Walder, Andrew, G, 184-212. University of California
Press.
Dickson, Bruce, J. 2000. “Cooptation and Corporatism in China: The Logic of Party
Adaptation.” Political Science Quarterly 115 (November):517-540.
Hsu, Szu-Chien. 1999. T w o Local Regime Types in China’s Rural Industrialization: A
Comparative Study of Four Townships in Fujian and Jiangsu.” Issues and Studies 35( 1):80-
130.
Liu, Yia-Ling. 1992. “Reform from Below: The Private Economy and Local Politics in the
Rural Industrialization of Wenzhou.” The China Quarterly 130 (June):293-316.
Montinola, Gabriella, Qian Yingyi and Weingast, Barry, R. 1996. “Federalism, Chinese
style: the Political Basis for Economic Success in China.” World Politics 48(0ctober):50-
81.
Naughton, Barry. 1992. “Hierarchy and the Bargaining Economy: Government and
Enterprise in the Reform Process.” In Bureaucracy, Politics, and Decision-Making in Post-
Mao China, eds. Kenneth G. Lieberthal and David M. Lampton, 308-33. Berkeley:
University of California Press.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
62
Nee, Victor. 1992. “Organizational Dynamics of Market Transition: Hybrid Forms, Property
Rights, and Mixed Economy in China.” Administrative Science Quarterly 37 (March): 1-27.
Nevitt, Christopher, E. 1996. “Private Business Associations in China: Evidence of Civil
Society or Local State Power?” The China Journal 36 (July):25-43.
Odegaard, Ole. 1992. “Entrepreneurs and Elite Formation in Rural China.” The Australian
Journal o f Chinese Affairs 28(July):89-108.
Oi, Jean, C. 1995. ‘T he Role of the Local State in China’s Transitional Economy.” The
China Quarterly 144 (December): 1132-1149.
Pearson, Margaret, M. 1994. ‘The Janus Face of Business Associations in China: Socialist
Corporatism in Foreign Enterprises.” The Australian Journal o f Chinese Affairs 31
(January):25-46.
Pei, Minxin. 1994. From Reform to Revolution: The Demise o f Communism in China and
the Soviet Union. Cambridge, Massachusetts, and London, England: Harvard University
Press.
Thai, Kellee, S. 2000. “Banquet Banking: Gender and Rotating Savings and Credit
Associations in South China.” The China Quarterly 161 (March): 142-170.
Unger, Jonathan and Chan, Anita. 1995. “China, Corporatism, and the East Asian Model.”
The Australian Journal o f Chinese Affairs 33 (January):29-53.
Unger, Jonathan. 1996. “’Bridges’: Private Business, the Chinese Government and the Rise
of New Associations." The China Quarterly 147 (September):795-819.
Unger, Jonathan and Chan, Anita. 1999. “Inheritors of the Boom: Private Enterprise and the
Role of Local Government in a Rural South China Township.” The China Journal 42
(July):45-74.
Walder, Andrew, G. 1995. “China’s Transitional Economy: Interpreting its Significance.”
The China Quarterly 144 (December):963-979.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.
63
Wank, David, L. 1995a. “Private Business, Bureaucracy, and Political Alliance in a Chinese
City.” The Australian Journal o f Chinese Affairs 33 (January):55-71.
Wank, David, L. 1995b. “Bureaucratic Patronage and Private Business: Changing Networks
of Power in Urban China.” In The Waning o f the Communist State: Economic Origins of
Political Decline in China and Hungary, ed. Walder, Andrew, G., 153-183. University of
California Press.
Wank, David, L. 1996. ‘The Institutional Process of Market Clientelism: Guanxi and
Private Business in a South China City.” The China Quarterly 147 (September):820-838.
Wank, David, L. 1999. “Producing Property Rights: Strategies, Networks, and Efficiency in
Urban China’s Nonstate Firms.” In Property Rights and Economic Reform in China, ed.
Walder, Andrew, G and Oi, Jean C., 248-272. Stanford: Stanford University Press.
Young, Susan. 1991. “W'ealth but Not Security: Attitudes towards Private Business in China
in the 1980s.” The Australian Journal o f Chinese Affairs 25(January): 115-137.
Zhang, Baohui. 1994. “Corporatism, Totalitarianism, and Transition to democracy.”
Comparative Political Studies 27(April): 108-134.
Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

Linked assets

University of Southern California Dissertations and Theses

Conceptually similar

PDF

China's Korean minority: A study in the dissolution of ethnic identity

PDF

Ethnic identity and nationalism in Taiwan

PDF

From denationalization to patriotic leadership: Chinese Christian colleges, 1920s--1930s

PDF

How China's economic reform changed domestic circumstances for exports during the 1980s

PDF

A comparison of the DPP's TV ads in the 2000 and 2004 Taiwan presidential elections

PDF

"The Infant in the Void": A spiritual journey

PDF

Japan's modernization and troubled identity: Grappling with the West and other foreigners

PDF

China's telecommunications race: An attempt by the CCP to achieve technical legitimacy and hold onto power

PDF

Farewell to the empire? National identity, domestic structures, and foreign economic policies of the post -Soviet states

PDF

If you build it...: A "different story" of the re-emergence of baseball in China, the people who play it, and why

PDF

Fish in and out of water: Changing representations of the relations between the Chinese people and their Liberation Army (1966--1986)

PDF

An analysis of characterization in "The Romance of the Western Wing"

PDF

Capital and punishment: The privatization of prisons in America

PDF

Differences in the development of citizenship: Residents' motivations and capacities for participating in neighborhood associations in Los Angeles

PDF

Adopting the China route

PDF

The death penalty in Japan and China: A comparative study

PDF

The dilemma of Chinese students in America: To return or stay?

PDF

Gender-biased education investment intention among Chinese rural parents: A glimpse into the intra-household resource allocation process

PDF

The impact of ethnic mobilization in postwar Japan: A reflection of Japan's two Korea policy

PDF

(Re)discovering fundamentalism in the cultural margins: Calvary Chapel congregations as sites of cultural resistance and religious transformation

Asset Metadata

Creator Kato, Yayoi (author)

Core Title Becoming a successful capitalist in China: Chinese private entrepreneurs and their relationship to the state

School Graduate School

Degree Master of Arts

Degree Program East Asian Area Studies

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag OAI-PMH Harvest,political science, general,sociology, social structure and development

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Rosen, Stanley (committee chair), [illegible] (committee member), Lynch, Daniel (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c16-42330

Unique identifier UC11337863

Identifier 1409592.pdf (filename),usctheses-c16-42330 (legacy record id)

Legacy Identifier 1409592.pdf

Dmrecord 42330

Document Type Thesis

Rights Kato, Yayoi

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA