Cambridge, UK: Cambridge University Press, 2019. xv, 348 pp. (Tables, figures.) US$120.00, cloth. ISBN 978-1-108-47492-4.
This book offers fresh insights into the much-discussed issue of how the private sector can survive and grow given the threats from state dominance and the absence of property rights protection in authoritarian China. Breaking from existing explanations, Qi Zhang and Mingxing Liu provide an alternative account that focuses on localized property rights protection, originating from elite cleavage and the resultant alliance between marginalized cadres and grassroots constituents.
The authors advance their arguments by examining spatial differences in Zhejiang Province, where the private sector emerged early in the Mao era and is still the most developed in China. In Zhejiang, long before the Communist Party came to power in 1949, local guerrilla forces had fought revolutionary wars somewhat independently, and as a result they formed close networks with local people. These guerrilla forces successfully seized power in some counties in early 1949, but their power was taken over shortly after the arrival of the major PLA armies (southbound armies and southbound cadres). This historical legacy naturally created two factions within power elites in Zhejiang after 1949, wherein southbound cadres occupied the dominant position and the local guerrilla cadres became marginalized. Different positions in the power structure and the conflicts between the two factions led political elites to develop different strategies. For political elites of the dominant factions, their political survival was more dependent on the regime’s patron-client networks formed by higher-level elites. For political elites of the marginalized factions, in contrast, forming alliances with their grassroots constituents to guarantee their political life became a viable strategy, which consequently protected various forms of capitalist endeavours, from household responsibility in the late 1950s to private business in the 1980s.
The book devotes three chapters (chapters 3, 4, and 5) to describing the evolution of such alliances and their consequences on grassroots capitalism in different historical periods. Since marginalized elites were more likely to be devoured by political struggles and jettisoned as scapegoats, they had to maintain a careful balance between accomplishing the policies assigned from above and looking out for local interests. Through the trial-and-error process, local guerrilla cadres realized the importance of gaining support from their constituents, thus shaping their attitudes. They developed various coping strategies to protect the interests of local people, such as turning a blind eye toward capitalist activities, colluding with local people to fool the higher-ups, disguising the private as collective, and so on and so forth. Their protection of local interests got paid off during political campaigns such as the Cultural Revolution. Those cadres who had been kind to the peasants got protected by local people when they were attacked. In sum, as the authors nicely put it, localized property protection is an alliance among the weak.
The most impressive part of the book is that the authors have classified counties into non-guerrilla and guerrilla counties and have linked this classification to various outcomes with quantitative evidence. Without exception, guerrilla counties were associated with more grassroots capitalism in various forms. What is more, the authors extend their logic to Jiangsu Province and find similar results; that is, marginal-faction counties did better in developing the non-state sector compared to their counterparts in dominant faction counties. This once again demonstrates how power structure or the positions of elites in the power structure influence their motivation and incentive, which in turn shape their political choices and behaviour.
At the end of the book, the authors raise several fascinating speculations about the implications of different power structures. For example, they predict that power concentration is likely to generate clientelist practices, while dispersed power structure is beneficial for the provision of public goods. Good governance and inclusive economic growth likely go hand in hand in areas where there is a diversified but well-organized civil society. As a matter of fact, these speculations have been substantiated by my book Marketization and Democracy in China. Interestingly, my study also includes Wenzhou and Sunan as two research sites, though my portrayal of Sunan differs from that found in this book.
I personally found the book particularly valuable on two fronts. First, the book offers rich and convincing evidence on factional politics and patronage in communist China. In the literature of political science and China studies, there exist several accounts on cadre selection, among which patronage is an important one. This book adds compelling evidence on patronage both in Zhejiang and Jiangsu. Second, the book presents plenty of documents about the policy/ideology debates around private business in the centre, as well as many incidents involving private business across the country. Scholars who study the history of private business in China can easily find relevant materials in this book.
While the authors’ general argument is logically persuasive on the whole and the book is the product of meticulous fieldwork, some questions remain. First, the stance of the book is too structurally deterministic, and there exists inconsistency between arguments and evidence. Even though the conflict between southbound leaders and local guerrilla leaders makes sense as a whole, other factors such as values, orientations, and mindset change may also have played a role. For instance, local officials that actively supported Yongjia’s household responsibility system in 1956 included quite a few southbound cadres. Both Yuan Fanglie and Dong Chaocai—party secretary of Wenzhou in the 1980s—were from the dominant faction, but quickly changed their attitudes toward private business after they got to know more about the local situation and the importance of private business for the people.
Second, the authors’ description of the attitude of local guerrilla cadres toward grassroot constituents is not surprising, such as their passivity in carrying out radical policies, avoidance of direct confrontation with the peasants, collusion to fool higher-level authorities, etc. The reasons are quite straightforward: high cost of repression, shared interest and concern between grassroots cadres and the people, deep embeddedness, and so forth. Why the private sector emerged in some places but not others still needs to be explained. Third, the current explanation cannot rule out existing explanations, such as historical legacy and resource endowment, as I have laid out in my book.
Nonetheless, this book is a valuable addition to the literature on the origin of China’s private business as well as power structures and their political implications.
Jianjun Zhang
Peking University, Beijing