Commodifying Communism: Business, Trust, and Politics in a Chinese City

By Huang, Qihai | Capital & Class, Autumn 2001 | Go to article overview
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Commodifying Communism: Business, Trust, and Politics in a Chinese City

Huang, Qihai, Capital & Class

David L Wank Commodifying Communism: Business, Trust, and Politics in a Chinese City Cambridge University Press, 1999. pp. 312 ISBN 0-521-62073-2 (hbk) L37.50 ISBN 0-521-79841-8 (pbk) L17.95

Since China's open and reform policy through the 1980s and 1990s, its economy has grown rapidly. During these two decades, the dynamic private sector has contributed to the booming Chinese economy. Chinese Government statistics show that private enterprises now account for 19.1 per cent of China's total industrial output and 37 per cent of retail of consumer goods (AFx, April 27 1999).

The private sector has thus attracted more and more attention in recent years. There is some research aiming at explaining the rapid development of the private economy, among which Wank's book is an impressive piece of sociological research. The book is one of the series Structural Analysis in the Social Sciences edited by Mark Granovetter.

Drawing upon almost two years of ethnographic fieldwork during 19881989 in Xiamen (one of China's five Special Economic Zones), Wank endeavours to set up a theoretical framework to explain why and how private businesses operate through what he terms `clientelist network' (guanxi, or connections). In the process of a Communist system transforming into a market economy, the vast resources controlled by the state are commodified, as they come to be perceived in terms of market price and profit seeking in commercial transactions. This transformative process is institutional commodification: `commodification is the transformation of institutionalised social relations of control over these vast resources, either through cadre's position of office or through clientelist ties by citizens to office holders' (p.29). For private entrepreneurs, commodification proceeds in the networks they mobilise to influence officials' discretion in their favour. During this transformation, a patron-client network is built. The social network is an integral element of the emerging market economy and has its economic and political implications.

The book is divided into two parts, with two introductory chapters. In chapter i the orientation of the study is described. It includes an overview of the classical communist orders and the commercial departures from them, summary and character of the research, and a historical sketch of the fieldsite. In Chapter 2, after review of Western literature on Chinese private business, Wank explains key concepts and categories of the analysis of institutional commodification: the rise of commercial clientelism with commodification of state monopoly.

There are four chapters in Part I, each of which considers a specific institutional process of the market economy as seen in the operation of private business. Chapter 3 looks at how the structure of commercial opportunity and competition are constrained by the state's power hierarchy, and the trade network. Chapter 4 describes how one such network works, the mutually beneficial patron-client exchange between private companies and public units. Chapter 5 addresses how private entrepreneurs develop stable expectations through personal ties, and norms of obligation and reciprocity in interaction with state agents and other social groups; how these expectations are produced by the interplay of popular and statist institutions is also analysed. Chapter 6 explores how commercial advantage in private business is constrained by the family background and life experiences of the entrepreneurs in terms of entrepreneurial paths of particular groups.

Part II is the extended analysis of Part I to examine the economic performance and the economic and political consequences for the polity. Chapter 7 compares China's economic performance with other postCommunist economies and explains why the former is superior to the latter.

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