Chinese Politics Mini-Conference: Getting China’s Political Economy Right

Session Submission Type: Created Panel

Part of Mini-Conference

• Chinese Politics Mini-Conference

Session Description

This panel examines the intersection of comparative and international
political economy in China. The papers explore important issues such as banking regulations,
foreign direct investment, state-owned enterprises, RMB internationalization, and economic
decoupling. Ling Chen’s paper proposes a theory of institutional rebound to explain why
state-owned enterprises (SOEs) are so hard to reform. She argues that the pressure to
reform drove SOE leaders to initially target lower tier workers and nonstrategic sector
workers, who have fewer political resources. However, because of institutional rebound,
these vacancies were soon replaced with the cronies of the powerful, which ironically
shrank the pool of personnel that could be targeted, pushing reforms upward to the higher
level of the political hierarchy where efforts stall. Adam Liu’s paper leverages bank
punishment records and elite interviews to explore why local Chinese banks rarely received
any regulatory warning or punishment despite massive malpractices. He argues that current
efforts to ramp up regulatory pressure over the banking system is a Sisyphean battle—
it’s impossible to credibly commit to both effective bank regulation and bank-financed
growth model.
Samantha Vortherms’ paper investigates how local governments manage competing
interests in developing their labor market by attracting foreign capital while preventing
excessive internal migration. She argues that variation in locally invested FDI time-horizon
and skill dependence drives the balance between inclusion and exclusion of migrants at the
local level. Policies that facilitate the integration of migrants correlate with longer-term
foreign contracts with greater dependence on high-skilled workers while shorter contracts
and those more dependent on low-skilled labor incentivize the local government to restrict
migrants access to local government services. Yeling Tan’s paper examines how local
governments in China have been implementing the central government's call for greater
self-reliance and global decoupling. Using an original dataset of local government policies
combined with fine-grained economic data, it explains why a locality's degree of
embeddedness in global supply chains, alongside perceptions of political risk, shapes its
available strategies for navigating between central guidelines and the international
economy. Siyao Li’s paper finds that China’s primary tool for currency internationalization---
RMB swaps---is constrained by the dual exigencies of guaranteeing security for overseas
economic interests and maintaining domestic financial stability. She demonstrates that RMB
internationalization is influenced by both Chinese and US security alliances

Sub Unit

• Division 13: Politics of Communist and Former Communist Countries

Individual Presentations

• Institutional Rebound: Why Reforming China’s SOEs Is So Difficult - Ling Chen, Johns Hopkins University

• The Political Economy of Bank Regulation in China - Adam Yao LIU, National University of Singapore

• FDI Skill-Dependence and Labor Market Management in China - Samantha Vortherms, University of California, Irvine

• Local States in World Markets: Self-Reliance in an Interdependent World - Yeling Tan, University of Oxford

• RMB Internationalization and the Limits of Economic Statecraft - Siyao Li, University of Pittsburgh; Aditi A Sahasrabuddhe, Brown University; Scott Wingo

Chair

• Roselyn Hsueh Temple University

Discussants

• Roselyn Hsueh Temple University

• Yuhua Wang Harvard University