Varieties of Bureaucrats, Varieties of Capitalism: The Origins of Developmental Paths in Local China

Although situated within the same national policy context, local governments in China have adopted diverse approaches in the recent campaign of industrial upgrading. In the Yangtze River Delta, governments adopted a top-down approach by creating a narrow coalition with large-scale, leading multinationals as the driving force for local development. In the Pearl River Delta, local governments adopted a bottom-up approach by nurturing a broad coalition with numerous small-sized foreign invested firms that provided immediate local production opportunities. I argue that the formation of different developmental coalitions cannot be fully explained by pre-existing economic conditions, but are rooted in the bureaucrats’ entrenched perception of their own interests, which show historically-persistent local patterns. When bureaucrats were primarily motivated by the ambition of climbing up the political ladder, they tended to seek alliance from big and powerful business, whereas when they were driven by practical economic gains, they tended to network with small-sized firms through flexible measures. The paper uses comparative historical analysis to trace the evolution of bureaucratic interests and the emergence of big and petty capitalism in the two regions throughout various historical periods between the late 19th century and the current era, when the cadre evaluation system and the fiscal arrangement reinforced the historically-developed tendencies. Finally, the paper shows that China’s integration into the global political economy profoundly complicated the two developmental coalitions, rendering the narrowly selective approach much less sustainable than was the case in other East Asian countries