Crossing the River by Feeling for Stones or
Carried Across by the Current?
The Transformation of the Chinese Automotive Sector
Scholars of China’s post-1978 economic reform confront two seemingly diametrically opposed realities. On the one hand, the Chinese economy has outperformed all expectations, with per capita gross domestic product (GDP) growing a total of over 630 percent between 1980 and 2005, compared to a global average of 53 percent.1 Stunning economic growth has, however, also been accompanied by a surge in corruption, rent seeking, and local protectionism, leading some to believe that reform will spawn a degenerate and mutated form of “crony capitalism with Chinese characteristics” based on “the marriage between unchecked power and illicit wealth,” “market communism,” and “massive corruption.”2 Others, however, see reform as creating a new class of “cadre entrepreneurs” and “market-oriented” local governments and a form “neomercantilist,” “local state corporatism” that will create a quasi-capitalist “developmental state.”3
These divergent views are based, ultimately, on whether their authors focus on the reality of rising dysfunctionality and fear that reform will fail or whether they focus on the reality of rapid growth and believe that China will somehow overcome the imperfections of its ad hoc reform program and will produce some sort of pseudo, ersatz capitalism. Regardless of which view may be more accurate, characterizations such as these are problematic because they rely on static “snapshot” characterizations of what is actually a dynamic and evolving process. Moreover, they have not proven particularly