China in the Global Economy: Authoritarian Politics and Economic Liberalization

Session Submission Type: Full Paper Panel

Session Description

China’s emergence as a global economic actor has generated growing international frictions and anxieties over the implications of the PRC’s model of “state capitalism” for international competitiveness, security, and governance. Yet there continues to be a gap between the distinctive characteristics of China’s economic rise and the ability of existing theories in international political economy to explain how China is re-shaping – and being shaped by – the global economy. If decision-making under authoritarianism is more top-down and less burdened by checks and balances than in democratic regimes, why did internal conflicts and delays mark China’s entry into the global trading system? International commitments should be more credible when a single-party regime makes them, so what explains China’s contradictory policy responses to WTO entry? China has become one of the most active players in the international investment landscape, yet we know little about the drivers of this capital expansion. How has the Chinese regime balanced the liberalization of investment with its own domestic economic and foreign security concerns? Why is it that the most competitive firms in China’s energy sector are not the most likely to invest overseas? Analyzing these patterns of trade, industrial, and investment policy can help inform our understanding of the effects of China on the global political economy, at a time of rising discontent over globalization in many parts of the world.

This panel contributes new theoretical insights into important questions about the international political economy of Chinese trade and investment patterns, using original data and novel research designs. Li uses data on negotiated tariff rates and internal government memos to explain the bureaucratic politics of China’s accession to the World Trade Organization (WTO), while Tan uses automated textual analysis of Chinese industrial policies to explain the emergence of Chinese state capitalism in the period after WTO entry. Together, these papers address an important gap in our understanding of the interaction between authoritarian domestic politics and international trade institutions. Li shows the role that bureaucratic agencies play in wielding veto power against liberalization even in a non-democracy, while Tan demonstrates that the efficacy of international trade rules in restraining domestic industrial policy depends not just on the strength of credible commitment, but on the ability of party leadership to discipline the state bureaucracy. The papers by Leutert and Haver and by Alkon tackle the politics behind China’s outward investment flows, using new data to deepen our understanding of China’s expanding investment footprint. Using an original textual dataset of bilateral investment treaties (BITs), Leutert and Haver analyze variation in China’s adoption of national security exceptions in its BITs and specify both domestic and international factors that drive the likelihood of adoption of such exceptions. Finally, Alkon uses geo-located data on coal-fired production and coal reserves to demonstrate that overseas investment is not driven by greater competitiveness in China’s domestic economy. Rather, outward investment serves as a compensatory mechanism for firms most vulnerable to the economic dislocations of domestic reform. Together, this collection of papers sheds light on the domestic and international politics behind China’s deepening integration into the global economy, adding to international political economy scholarship on the authoritarian politics of liberalization.

Sub Unit

• DIVISION 16: International Political Economy

Individual Presentations

• Bureaucratic Access, Institutions & Tariff Negotiations in China's WTO Accession - Xiaojun Li, University of British Columbia

• State Strategies in the WTO Era: Explaining the Rise of Chinese State Capitalism - Yeling Tan, University of Oregon

• From BITs to BRI: China’s Evolving Approach to International Investment - Wendy Leutert, Indiana University; Zachary Haver, The George Washington University

• Global Investment & Domestic Reforms: The Politics of China’s Energy Transition - Meir Alkon, Princeton University

Chair

• William J. Norris Texas A&M University

Discussants

• William J. Norris Texas A&M University

• Austin Michael Strange Harvard University