Students of new comparative political economy have summarised four ideal models of political and economic governance for human society which include private ordering, independent judges, a regulatory state and state ownership. Among them, the mode of regulatory state can be regarded as an eclectic way to reduce loss as a result of market disorder by means of more threats sourced from state dictatorship. (1 By the 1980s, the mode of regulatory state was adopted by only the United States, based mainly on a laissez-faire economic infrastructure. With the rising tide of privatisation and approach of modern risk society, three different kinds of states have carried out regulatory reforms to overcome market failure and societal risk since the 1980s: positive states in European Union countries,2 developmental states in East Asia and Latin America3 and command states in the former Soviet Union and East European countries. (4 Interestingly, if we draw a continuum taking governmental control and market function as its two extremes (see Figure 1), we can infer a few things. Although regulatory state governance systems were already established in various countries, they differ from each other due to their different starting points, management styles and mechanisms.5
However, can the above taxonomy cover the whole transition process to regulatory state for all countries? The answer may be "no" and China's regulatory reform is an exception. Since the mid-1990s, Chinese communist leaders have implemented a series of regulatory reform policies such as government-business separation, abolition of administrative monopolisation, establishment of independent regulatory agencies and rebuilding of a vertical management system to enhance the traditional Leninist state's capability for taming the market economy. Meanwhile, China's historical starting point for the building of a regulatory state differs from all four. On the one hand, from 1949 to the end of the 1970s, China copied a Soviet-style command system to govern its economy and society, but the Chinese command system is more decentralised and localised in contrast to the former Soviet Union's. On the other hand, during the economic reform period since the end of the 1970s, the Chinese government has imitated Japanese- or Korean-style developmental state patterns to push and maintain its high-rate of economic growth. The Chinese developmental state is also unlike the Japanese or Korean model due to its unique decentralised socialist economy infrastructure. In other words, the origin of the Chinese regulatory state is also not identifiable with those four ideal types and should be categorised as a mixture of command state and developmental state.
[FIGURE 1 OMITTED]
Therefore, the key research puzzle and question for this article is: as a long-established command state and decentralised developmental state, for what reasons has the Chinese government decided to implement regulatory reform policies and build a regulatory state in the mid-1990s? What kind of structural resistance factors will Chinese regulatory state-building face? What unique characteristics does the Chinese regulatory state possess?
This article attempts to offer a brief but solid explanation to all those questions by examining a typical case of social regulation: pharmaceutical regulation. As one of the earliest social regulation policies in developed countries' history, pharmaceutical or drug safety regulation is a typical case for risk regulation in industrialised society to protect public health effectively. (6) Also, in China's regulatory reform movement, pharmaceutical regulation reform has become one of the most advanced fields. Since 1998, the central government pharmaceutical regulatory body, the State Drug Administration (SDA), has wrested all drug safety regulation powers from other related agencies and provincial authorities. Meanwhile, most state pharmaceutical companies have been separated from the SDA and a third-party regulation regime has been effectively established. …