The Institutional Dynamics of China's Great Transformation edited by Xiaoming Huang , Oxon and New York: Routledge, 2011, xvi + 256 pp.


During the past 30 years, China has enjoyed tremendous economic success and social development without huge political change in its Communist Party system. As an alternative to the “Washington Consensus,” the “Beijing Consensus” is attractive to politicians and scholars from developing economies. Thus, China's experience raises a basic question as to what kinds of institutions are better for economic development.

The goal of this book is to assess the role of institutions in China's economic, social, and political transformation using experimental and theoretical studies. Many leading scholars participated in this project, and each chapter features highly original and new findings. The targeted readers of this volume are China specialists, but several chapters with theoretical approaches are recommended for scholars in the field of comparative political studies.

In the Introduction (Chapter 1), Xiaoming Huang describes the so-called China puzzle as “sustained economic growth and social development under problematic institutions” (p. 5). Previous studies of the China puzzle tended to explore China's particular context; however, Huang emphasizes that the China puzzle requires more than mere recognition of China's uniqueness. The puzzle needs to be analyzed at both the conceptual and theoretical levels.

In Chapter 2, Harry Harding analyzes the relationship between China's foreign policy and international institutions. He divides the history of China's foreign policy into three stages: isolation, integration, and activism. In summary, he argues that China has developed strong affiliations with international institutions, both structurally and normatively. Furthermore, China is not satisfied with the existing international order and is demanding greater influence in various institutions. Unlike other authors who mainly focus on domestic issues, he uses an institutional approach to analyze international politics and has produced highly original and interesting research.

Chapters 3 and 4 discuss the institutional dynamic of economic growth and development. In Chapter 3, using a case study on the Zhongguancun Science and Technology Zone (ZSTZ) in Beijing, Hong Sheng explores how institutions can be set up in a short period of time. He argues that institutional change in Zhongguancun is “not a result of planned institutional development, but rather a process of spontaneous evolution” (p. 41). With strong support from central to local governments, institutions in ZSTZ could be set up quickly using Silicon Valley as a model. The interesting fact is that Zhongguancun government agencies have no power over land management, taxation, and so forth; their mission is to provide support for enterprises without government intervention. While Chapter 3 focuses on exploration of how to set up better institutions for economic development, Chapter 4 discusses development capabilities under certain institutions. Keun Lee and Rui Wang provide an assessment of China's science and technology institutions and their capacities by focusing on the mechanism and patterns of international, intra-national, and interfirm knowledge diffusion and related R&D capabilities in the semiconductor industry. The authors argue that, due to its inherently weak R&D capabilities, China is not yet ready to become the next leader in semiconductor-related innovation.

In Chapter 5, Yujun Feng explores the economic and legal dynamics of chaiqian (housing demolition and relocation) by analyzing the three parties involved, which are the government, developers, and evicted residents. In conclusion, he argues that under the current laws and regulations, the government and developers take advantage during the process of chaiqian. He indicates that the government's and developers' illegal actions could be constrained by improving existing laws and regulations. However, in reality, the key point is the dualism of local governments. On the one hand, the local government is a judge, and on the other, an active player in the market economy. Improving laws and regulations to constrain the local government's actions may be efficient at a certain level, but it will not cause complete withdrawal of local governments from the market.

In Chapter 6, Weisen Li analyzes China's legal system through a theoretical approach. Li mentions that lack of social trust and other problems in contemporary China are mainly caused by the dysfunctional legal system. He argues that China's traditional culture, which regards law as a useful instrument of governance, constrains China's constitutional development from a rule-by-law state to a rule-of-law state. In contrast to other chapters which only examine a certain dimension of institutional or economic performance, this chapter emphasizes the fundamental problem, that is, constitutional democracy. However, this is not a new subject for scholars, and today's readers would prefer a better answer to how China can move forward from its current situation to rechtsstaat (rule of law).

Chapters 7 and 8 both examine hukou (household registration). In Chapter 7, Fei-Ling Wang explains that, although the Chinese government declared reform of the hukou system many times, the reform always became mired due to resistance from related ministries and local governments. This is because the hukou system is not only a system of migrant control but also a bundle of systems for resource management in urban and rural areas. In a change of pace from Chapter 7, which mainly explores the macro history of hukou and its transition, Chapter 8 analyzes changes in the hukou system at the micro level. Using data and case studies in Beijing and Shenzhen, Jason Young explains the changing process of hukou by separating institutional objectives, institutional arrangements, and the informal practices of the hukou institution. In the past 30 years, hundreds of millions of people have streamed into the megacities, but the hukou system lags far behind. To change the hukou system, the central government needs to reshuffle vested interests in related ministries and local governments.

Chapters 9 and 10 analyze political reforms after 1978. In Chapter 9, Qiang Li explores China's political reform using a theoretical approach. He argues that China's political reform is inclined toward building a state that adjusts economic development but does not subject state power to the democratic process. In Chapter 10, Dingping Guo argues that China has sought economic development and political democracy that he calls “developmental democracy.” He further points out that China is a successful case that shows that political development can be achieved by managing democratic elements within the existing political system. Guo's understanding of democracy emphasizes practice but not values. Therefore, he optimistically indicates that democracy can be achieved by accumulation of institutional changes.

Taking a different approach from the other chapters, which discuss institutions or systems, Chapter 11 explores an organization, China Central Television (CCTV). By exploring the transformation of CCTV under the pressure of the market economy and political forces, Yong He's study shows that CCTV's reform has barely progressed due to the political structure and institutions. Power abuse has reduced the Chinese Communist Parties' legitimacy drastically in recent years, and the news media has been the most effective tool for checking its power. However, the government has not allowed freedom of speech, which could lead to direct criticism of the ruling party and political regime. This case study of the transformation of CCTV provides a good opportunity to understand how China became trapped in its transition from totalitarianism to democracy.

In Chapter 12, C.S. Bryan Ho explores the dynamic of village elections using a historical institutionalist approach. Unlike many previous works that emphasize economic factors and institutional (political) factors to account for variation in participation rates, Ho's study tends to treat villagers as strategic actors. Focusing on mediators of procedural legitimacy, he points out that villagers act strategically to pursue their interests under state-designed institutions. After the Protest of Wukan, the villagers' strategic action attracted massive attention from scholars. Did the villagers' strategic action solve problems? To what extent did the villagers' strategic action affect government policy? Many questions remain unclear and more studies are needed.

The final chapter summarizes all the findings in an attempt to describe “how institutions have mattered” during the past 30 years of transformation. The editor points out that the China puzzle “has become a puzzle because of the theoretical assumptions and conceptual properties of the institutional theories rather than because of empirical and logical disjuncture” (p. 224).

There are limitations in this volume. First, while each of the chapters shows strong originality, the authors do not share a common definition of “institution.” For example, in Chapter 2, Harding describes international regimes and international organizations as international institutions, but in Chapter 5, Feng's understanding of an institution more closely resembles regulation. Furthermore, in Chapter 4, the authors do not discuss institutions. Second, it is difficult to find an interrelation between the chapters (except Chapters 7 and 8). The pluralist approach, as the editor mentions in the beginning, has produced many dynamic findings, but in return, it has complicated the message of the book.