China and the Global Political Economy Shaun Breslin 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page i International Political Economy Series General Editor: Timothy M. Shaw, Professor of Human Security & Peacebuilding, School of Peace & Conflict Management, Royal Roads University, Victoria, BC, Canada Titles include: Pradeep Agrawal, Subir V. Gokarn, Veena Mishra, Kirit S. Parikh and Kunal Sen POLICY REGIMES AND INDUSTRIAL COMPETITIVENESS A Comparative Study of East Asia and India Roderic Alley THE UNITED NATIONS IN SOUTHEAST ASIA AND THE SOUTH PACIFIC Dick Beason and Jason James THE POLITICAL ECONOMY OF JAPANESE FINANCIAL MARKETS Myths versus Reality Mark Beeson COMPETING CAPITALISMS Australia, Japan and Economic Competition in Asia-Pacific Deborah Bräutigam CHINESE AID AND AFRICAN DEVELOPMENT Exporting Green Revolution Shaun Breslin CHINA AND THE GLOBAL POLITICAL ECONOMY Kenneth D. Bush THE INTRA-GROUP DIMENSIONS OF ETHNIC CONFLICT IN SRI LANKA Learning to Read between the Lines Steve Chan, Cal Clark and Danny Lam (editors) BEYOND THE DEVELOPMENTAL STATE East Asia’s Political Economies Reconsidered Abdul Rahman Embong STATE-LED MODERNIZATION AND THE NEW MIDDLE CLASS IN MALAYSIA Dong-Sook Shin Gills RURAL WOMEN AND TRIPLE EXPLOITATION IN KOREAN DEVELOPMENT Jeffrey Henderson (editor) INDUSTRIAL TRANSFORMATION IN EASTERN EUROPE IN THE LIGHT OF THE EAST ASIAN EXPERIENCE Takashi Inoguchi GLOBAL CHANGE A Japanese Perspective Dominic Kelly JAPAN AND THE RECONSTRUCTION OF EAST ASIA 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page ii L. H. M. Ling POSTCOLONIAL INTERNATIONAL RELATIONS Conquest and Desire between Asia and the West Pierre P. Lizée PEACE, POWER AND RESISTANCE IN CAMBODIA Global Governance and the Failure of International Conflict Resolution S. Javed Maswood JAPAN IN CRISIS Ananya Mukherjee Reed PERSPECTIVES ON THE INDIAN CORPORATE ECONOMY Exploring the Paradox of Profits CORPORATE CAPITALISM IN CONTEMPORARY SOUTH ASIA (editor) Conventional Wisdoms and South Asian Realities Cecilia Ng POSITIONING WOMEN IN MALAYSIA Class and Gender in an Industrializing State Fahimul Quadir and Jayant Lele (editors) DEMOCRACY AND CIVIL SOCIETY IN ASIA: VOLUME 1 Globalization, Democracy and Civil Society in Asia DEMOCRACY AND CIVIL SOCIETY IN ASIA: VOLUME 2 Democratic Transitions and Social Movements in Asia Ian Scott (editor) INSTITUTIONAL CHANGE AND THE POLITICAL TRANSITION IN HONG KONG Mark Turner (editor) CENTRAL-LOCAL RELATIONS IN ASIA-PACIFIC International Political Economy Series Series Standing Order ISBN 0–333–71708–2 hardcover Series Standing Order ISBN 0–333–71110–6 paperback (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of difficulty, write to us at the address below with your name and address, the title of the series and one of the ISBNs quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page iii China and the Global Political Economy Shaun Breslin Professor of Politics and International Studies, University of Warwick, UK 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page iv © Shaun Breslin 2007 All rights reserved. No reproduction, copying or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2007 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N. Y. 10010 Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin’s Press, LLC and of Palgrave Macmillan Ltd. Macmillan® is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN-13: 978–1–4039–8647–4 hardback ISBN-10: 1–4039–8647–9 hardback This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources.Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Breslin, Shaun. China and the global political economy / Shaun Breslin. p. cm. – (International political economy series) Includes bibliographical references and index. Contents: Studying China in an era of globalisation – The transition from socialism: an embedded socialist compromise? – Re-engagement with the global economy – Beyond bilateralism: what the statistics don’t tell us – Interpreting Chinese “power” in the global political economy – The domestic context: stretching the social fabric? ISBN-13: 978–1–4039–8647–4 (cloth) ISBN-10: 1–4039–8647–9 (cloth) 1. China–Foreign economic relations. 2. China–Economic conditions–2000- 3. China–Politics and government–2002- I. Title. HF1604.B72 2007 337.51–dc22 2006053004 10 9 8 7 6 5 4 3 2 1 16 15 14 13 12 11 10 09 08 07 Printed and bound in Great Britain by Antony Rowe Ltd, Chippenham and Eastbourne 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page v Contents Acknowledgements vi List of Abbreviations vii Note on the Transliteration of Chinese Names ix Introduction: China – Yes, But … 1 Chapter 1 Studying China in an Era of Globalisation 14 Chapter 2 The Transition from Socialism: An Embedded Socialist Compromise? 40 Chapter 3 Re-engagement with the Global Economy 82 Chapter 4 Beyond Bilateralism: What the Statistics Don’t Tell Us 106 Chapter 5 Interpreting Chinese ‘Power’ in the Global Political Economy 131 Chapter 6 The Domestic Context: Stretching the Social Fabric? 157 Conclusions 190 Notes 202 Bibliography 211 Index 239 v 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page vi Acknowledgements I started the first draft of this manuscript when I was Visiting Professor at City University of Hong Kong, and I am very grateful for the support provided by City University, and to Kevin Hewison in particular. This work has also benefited from time spent at the Asia Research Centre at Murdoch University and research undertaken in China, and I would like to thank Garry Rodan, Chen Zhimin, Song Xinning, Dai Bingran and Zha Daojiong for their help and financial support, and the Centre for the Study of Globalisation and Regionalisation at Warwick for funding some of them. Special thanks to Bill Abnett and the National Bureau for Asian Research for organising the China-WTO forum which has not only provided an invaluable insight into ideas and opinions of others, but also links to documents and news stories that have been used in preparing this manuscript. Thanks also to Wang Yizhou and Yu Yongding for providing access to the Institute of World Economics and Politics and to Sarah, Patrick and Hannah for putting up with my fre- quent absences from home over the years. vi 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page vii List of Abbreviations ACFTA ASEAN-China Free Trade Area ADB Asian Development Bank AFLCIO American Federation of Labor and Congress of Industrial Organizations AMC Asset Management Company APT ASEAN Plus Three ASEAN Association of Southeast Asian Nations CASS Chinese Academy of Social Sciences CC Central Committee (of the Chinese Communist Party) CCP Chinese Communist Party CD China Daily CECC Congressional-Executive Commission on China CFB Chinese Family Business CIF Cost Insurance and Freight CME Contract Manufacturing Enterprise CPPCC Chinese People’s Political Consultative Conference EPZ Export Processing Zone EU European Union FAC UK Parliamentary Foreign Affairs Committee FDI Foreign Direct Investment FIE Foreign Invested Enterprise FOB Free On Board GATT General Agreement on Tariffs and Trade GDP Gross Domestic Product GNP Gross National Product GSP Generalised System of Preferences IPE International Political Economy IPR Intellectual Property Rights IR International Relations ITIC International Trust and Investment Corporation JV Joint Venture MFN Most Favoured Nation MOFTEC Ministry of Foreign Trade and Economic Cooperation NAFTA North American Free Trade Agreement NGO Non Governmental Organisation NPC National People’s Congress vii 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page viii viii List of Abbreviations NPL Non performing loan NSB National Statistics Bureau OEM Original Equipment Manufacturing OECD Organization for Economic Co-operation and Development OPEC Organization for the Petroleum Exporting Countries PBC People’s Bank of China PLA People’s Liberation Army PNTR Permanent Normal Trade Relations PPP Purchasing Power Parity PRC People’s Republic of China R&D Research and Design RMB Renminbi SASAC State Asset Supervision and Administration Commission SETC State Economic and Trade Commission SEZ Special Economic Zone SOE State Owned Enterprise TNC Transnational Corporation TVEs Township and Village Enterprises UN United Nations UNCTAD United Nations Conference on Trade and Development US United States USCBC United States China Business Council USGAO United States General Accounting Office USTRO United States Trade Representative Office WFOE Wholly Foreign Owned Enterprise WSCB Wholly State Owned Commercial Bank WTO World Trade Organisation 1403986479_01_Prex.pdf 4/5/07 1:38 PM Page ix Note on the Transliteration of Chinese Names As with most contemporary works, this book uses the hanyu pinyin system of transliterating Chinese into roman script. The only excep- tions are where people have chosen to transliterate their own names in different ways – in these cases, their original transliterations are simply repeated here. As there are many references to Chinese authors with the same surname, the Chinese name will be given in full when referenced in the text to help the reader find the correct source in the bibliography where the duplication of surnames might cause confusion. ix