From Fiefs to Clans and Network Capitalism: Explaining China's Emerging Economic Order

By Boisot, Max; Child, John | Administrative Science Quarterly, December 1996 | Go to article overview

From Fiefs to Clans and Network Capitalism: Explaining China's Emerging Economic Order


Boisot, Max, Child, John, Administrative Science Quarterly


China has sustained a rapid rate of economic growth since the inauguration of its economic reform in 1979, with only short-lived interruptions. This success contrasts favorably with most other developing countries (Economist, 1995b) and prompts enquiry into the kind of economic organization that is facilitating such an impressive performance. China's growth has been stimulated by two main developments. The first is a shift in industrial ownership and property rights, with the state playing a diminishing role. The second is the increasing part played by market transactions, including a growing integration with the world economy. These developments would appear prima facie to be moving China's economic system toward market capitalism. China has distinctive political, institutional, and cultural characteristics, however, and it is recognized that such factors can give rise to different modes of economic organization (Hamilton and Biggart, 1988; Whitley, 1994). Two broad questions therefore arise. The first is what kind of economic order is emerging in China, an answer to which is complicated by the country's size and heterogeneity and by the uneven spread of its economic reform (Tu, 1993; Ungar and Chan, 1995). The second is how far China's emerging economic order can be analyzed in conventional Western terms. The ability of Western neoclassical economic theory to account for the nature and success of other Asian business systems has already been put in doubt (e.g., Biggart and Hamilton, 1992).

These broad questions subsume a number of more specific issues that this paper addresses. The first concerns the type of business system now operating in China. If, as Nee (1992) suggested, there is a newer system of marketized transactions in addition to state-dominated nonmarket firms, does this merit special attention as the Chinese economic system of the future (cf. Qian and Xu, 1993)? Second, do the arrangements through which the marketized sector operates conform to the Western model? Third, and notwithstanding protestations by the Chinese leadership to the contrary, is the economic order that is emerging in China from the dismantling of the socialist system a capitalist one - as understood by Western observers and as judged by the criteria of ownership and property rights - or does it require its own specific designation? Fourth, if a distinctive economic system is emerging in China, what part does government play in its operation and does this require an elaboration of our conventional theories about the role of the state in economic life? Answers to these questions would be of considerable moment for Western academics and business people. A good understanding of Chinese economic organization would bear on Western discussions of modernization, many of which assume that this requires the building of market, property rights, and other institutional systems of essentially the same kind that supported earlier instances of industrialization. Such answers would also carry useful implications for foreign investors and business people. Better knowledge of the Chinese business system would help foreign companies enter the system and point to where power and decision making are located within it.

In this paper, we argue that China is treading a path toward modernization that differs from Western experience and that the essence of this can be analyzed in institutional terms. We then tentatively identify the distinctive characteristics of China's emerging economic order, by reference to China's business system and markets, capitalism, and government within that system. The paper as a whole should be read as a prolegomenon to the research that its subject richly deserves, its purpose at this stage being to elaborate relevant questions rather than to offer adequate answers.

In theoretical terms, the paper extends the markets and hierarchies debate initiated by Williamson (1975) in a new direction. As it evolved, the markets and hierarchies formulation established a unidimensional continuum, with market coordination at one end and hierarchical coordination at the other.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

From Fiefs to Clans and Network Capitalism: Explaining China's Emerging Economic Order
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.