Ithaca and London: Cornell University Press, 2021. xvi, 219 pp. (Tables, graphs, figures, illustrations.) US$50.00, cloth. ISBN 9781501759635.
Twenty years after China’s entry into the World Trade Organization (WTO), many pundits and politicians have concluded that Beijing has benefited tremendously from the global trading system while failing to deliver on many of the promises in its accession protocol. The latter has been marshalled as evidence of China’s defiance of the liberal international order, despite official rhetoric to the contrary. Such an interpretation falls into the easy trap of reducing China to a monolith, whereas the country’s variegated and sometimes even contradictory policy responses to the WTO reflect a fact long recognized by students of Chinese politics: the one-party authoritarian state is fragmented, with policy conflicts occurring vertically between central and subnational governments as well as horizontally across different agencies at each administrative level.
In the aptly titled Disaggregating China Inc., Yeling Tan adapts this “fragmented authoritarianism” framework to domestic and foreign economic policymaking and unpacks China’s party-state to answer a crucial question: How did China respond to pressures to comply with wide‑ranging and intrusive policy requirements upon joining the WTO, and what explains its subsequent economic policy trajectories? In contrast to conventional wisdom, Tan argues there was no monolithic state response or uniform strategy. Instead, owing to its domestic governing structure, which is simultaneously fragmented and highly competitive, China employed three distinct state strategies: market-substituting (directive), market-shaping (developmental), and market-enhancing (regulatory). Crucially, for different actors within the state and over time, their choices of these strategies are driven concurrently by the threat of sanction for violating WTO rules and by prospects for career advancement.
To empirically assess the theoretical argument, the book takes advantage of an impressive amount of original quantitative and qualitative data. Chapter 3 employs quantitative textual analysis of an original data set of Chinese industry regulations to demonstrate compellingly that the central, provincial, and local governments—being most to least exposed to the threat of WTO sanction and overseeing the most- to least-diversified industrial bases—adopted regulatory, developmental, and directive responses to WTO entry, respectively. Chapter 4 examines policy changes over time. Drawing on primary and second materials through fieldwork, it carefully documents how the impact of WTO entry created winners and losers across the bureaucratic agencies within the central party-state apparatus, and how their contestations eventually led to the rise of state capitalism in the late 2000s. Chapter 5 focuses on policy trajectories across China’s manufacturing industries, using both comparative case studies and quantitative analysis to explain why, despite the government’s turn toward developmentalism at both national and subnational levels, WTO entry nevertheless exacerbated policy conflict in industry governance of China’s national champions.
Taken together, this book is an exemplary work of theory-driven empirical research in its best form on a timely and important topic. It skillfully bridges the existing literature on international relations and the political economy of China by highlighting the value of disaggregating state responses to global economic integration. If one were to nitpick, the book could have further explored the factors that drive the variations in policy responses horizontally at the subnational level, illustrated by the example of divergent policies in the metal products industry across Liaoning, Guangxi (Hechi City), and Shanghai that Tan mentions in the book’s introduction. This would have allowed a more direct engagement with the literature on the promotion and career trajectory of Chinese officials and an examination of, for instance, whether or not local officials promote certain strategies when they are up for promotion.
Similarly, the issue of policy implementation may warrant further scrutiny, considering that a major source of China’s poor compliance record with WTO rules arises from uneven implementation of central directives at the provincial and municipal levels. While the book’s focus is on how China’s fragmented domestic structure mediates the forces of globalization and leads to policy divergence, examining the differences between de jure policy statements and de facto policy outcomes (and possibly their variations over time across administrative levels and industries) may help shed more light on the question motivating the book: To what extent has WTO membership succeeded in integrating China into the international rules-based system?
In sum, Disaggregating China Inc. successfully advances a new explanation for why, rather than constraining authoritarian states or credibly committing them to global economic rules, WTO entry alters politics within the state and provokes divergent responses from different sub-state actors in ways that do not necessarily strengthen the transition toward market-economy governance. In so doing, the book convincingly challenges the prevailing framing of state responses to international rules in dichotomous terms of compliance or defiance and protectionism versus liberalization. It also debunks popular beliefs about the failure of the WTO to integrate China into the rules-based system, and about Beijing’s promotion of a coherent state capitalist model globally through national state-owned champions and an assertive industrial policy. This book should be required reading for students, scholars, and policymakers alike, as well as anyone who wishes to gain a more nuanced understanding of China’s fragmented policymaking structure and its implications for the country’s domestic and foreign economic policies and strategies.
Xiaojun Li
The University of British Columbia , Vancouver