Economic Openness and Territorial Politics in China

Article excerpt

Economic Openness and Territorial Politics in China, by Yumin Sheng. Cambridge: Cambridge University Press, 2010. xx + 292 pp. £55.00/ US$85.00 (hardcover).

In this book, Yumin Sheng examines how China's integration into the global economy has shaped central-provincial political relations in the post- 1978 period. Sheng s central hypothesis is that China's highly centralized political structure, and the consequent ability of the Chinese Communist Party (CCP) to exercise tighter political control on those provinces most likely to challenge its power, has played a critical role in holding the country together during a period in which global integration could have posed a serious threat to national unity. However, this has come at a cost, as the more tightly controlled provinces - the richer coastal provinces which have benefited the most from global integrationhave been subject to greater fiscal extraction from the center, and have suffered lower rates of economic growth as a consequence. This situation has far-reaching implications for the sustainability of China's economic growth and its political transition towards democracy.

Sheng begins with a succinct discussion of theoretical issues relating to political centralization and globalization, combined with illustrative applications to a broad range of countries. China is a prime example of the most centralized type of political system in which one single political party is capable of exercising authority over its provincial governments through personnel appointments and other means. Sheng identifies four subsets of provincial Party secretaries, who represent each province's degree of "bureaucratic integration" with the center, based on their perceived willingness to behave in Une with the center's own objectives. These are "concurrent centralists" (who are also members of the Politburo of the CCP Central Committee), "centralists" (who used to hold key positions in the center), "outsiders" (who previously spent time in other provincial posts) and "localists" (who worked their way up the local bureaucratic hierarchy). Sheng uses this classification to construct a bureaucratic integration index for each province in each year, which proxies for the center's degree of control and is the focal point of the analysis that follows.

Over the five central chapters of the book, Sheng is comprehensive and lucid in establishing his hypotheses, explaining his measurements and methodologies, presenting and discussing his results, and addressing the shortcomings of his analysis. He combines a rigorous and structured approach to statistical analysis with anecdotal evidence, historical, political and economic context, and extensive referencing to a broad literature. This makes for a book that is easy to read and highly informative, particularly for those who like numbers. While it may be possible to pick holes in some of his results, the overall message is both clear and credible: more globally integrated provinces have tended to be more bureaucratically integrated with the center in Beijing, paying a cost in terms of fiscal remittances and economic growth, but to the benefit of national unity.

Sheng argues that the center's fiscal prédation on more prosperous provinces erodes the property rights of provincial officials and distorts their incentives for pursuing high growth (although it is not obvious that growth maximization is no longer optimal, even if the center is extracting more of their pie). …