Varieties of the Regulatory State and Global Companies: the Case of China
| Author | Shiufai Wong |
| Date | 01 May 2013 |
| Published date | 01 May 2013 |
| DOI | http://doi.org/10.1111/1758-5899.12051 |
Varieties of the Regulatory State and Global
Companies: the Case of China
Shiufai Wong
Macao Polytechnic Institute
Abstract
Understanding what kind of regulatory state/capitalism China represents can be an arduous task, and the issue is still
under debate. This article uses a dynamic regulatory perspective to examine how the Chinese government has chan-
ged its roles of governance and relationships with global companies. Obviously, the changes would depend on the
type, scope, power and other case-by-case intricacies of global companies. Using statistics across the 100 largest global
companies chosen from Fortune’s Global 500, this article explores the central tendency and relationship between regu-
lators and global companies in China. As the evidence tends to suggest, in no respect can China’s regulatory choices
be looked upon as those of the regulatory state represented in the literature. The regulatory tactics of the Chinese gov-
ernment have merely allowed it to utilize the professional/technical expertise of the more well-established and/or cred-
ible foreign actors and regulators. The Chinese government has never its compromised long-term national goals or
interests.
Policy Implications
•China is emerging as a market economy institutionally, as well as economically and politically. The entrance of glo-
bal companies from established capitalist countries is part of the reason for China’s institutional evolution, but the
state’s overriding desire to remain in control to protect and act in the national interest means that a command-
and-control developmental orientation should be seen as largely overriding, or at the very least supplementing,
what may appear to be an acceptance of a market-friendly regulatory orientation.
•As China goes through a process of institutional evolution, the state is employing approaches from different regula-
tory capitalist traditions. It defies clear categorization at this stage of its development. Instead, it should be best
understood in terms of the aim of the regulations rather than the exercising of them. In this sense, China is best
conceived as a form of developmental state. The state has a developmental, rather than regulatory, orientation
despite increasingly employing regulations to meet its goals.
•Just as China should not be seen as converging on a western form of the regulatory state and regulatory capital-
ism, nor may it easily be conceived as a developmental state in the mould of the East Asian states that emerged
earlier. Its increasing integration with the world economy, its acceptance of foreign direct investment and its acces-
sion to the World Trade Organization mean that a preference for state guidance is being reconciled with regulatory
capitalism.
The ‘black box’process of China’s integration
into global capitalist markets
Understanding what kind of regulatory state/capitalism
China represents can be an arduous task. In addition to the
‘laissez-faire regulatory capitalism’(under both weak state
and civil regulation) of western market-oriented econo-
mies, a number of other models exist in the rest of the
world: for example, ‘command-and-control regulatory capi-
talism’(under strong state regulation and weak civil regu-
lation), ‘pluralist regulatory capitalism’(under weak state
regulation and strong civil regulation) and ‘corporatist reg-
ulatory capitalism’(under both strong state and civil regu-
lation) (Levi-Faur, 2006b). No single variety of regulatory
capitalism can explain why and how China has behaved
inconsistently in its relationship with global companies. It
is noted that China has changed its regulatory game plan
continually in order to integrate itself into global capital-
ism, especially after China was admitted to the WTO in
December 2001. The Chinese government is running more
than one kind of regulatory capitalism in parallel. Why do
these variants of regulatory capitalism coexist after the
massive entry of global companies (which formulate civil
regulations) into China (which enacts state regulations)?
The literature shows that the usual (laissez-faire) regu-
latory approach to governance without a sense of
Global Policy (2013) 4:2 doi: 10.1111/1758-5899.12051 ©2013 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 4 . Issue 2 . May 2013 173
Special Section Article
To continue reading
Request your trial