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New Roads to Capitalism: China and Global Value Chains

  • Author(s): Dallas, Mark Peter
  • Advisor(s): Chaudhry, Kiren
  • et al.
Abstract

The creation of markets in China has been most commonly analyzed through the lens and vocabulary of the new institutional economics in which broad, national-level institutional reforms are seen to be effective because they altered the incentive structures of farmers, local government officials, or factory managers. Drawing from literature on comparative capitalism which focuses on the processes of production, this dissertation examines markets through deconstructing production to the level of specific commodities. It utilizes a value chain framework by beginning with the cultivation of cotton, wool and silk agricultural commodities, and tracing them through China's textile and garment industries and into domestic and foreign trade. It considers each of these links along the chain as a locus of conflict between China's many ministries, local governments and economic actors, highlighting the political contestation and the complexity of state policy underlying the institutionalization of markets. By tracing how the terms of trade become structured along the chain over time, it details the re-creation of economic order and the distribution of resources among different producer groups.

This approach is employed to construct a comparative historical narrative of China's textile agro-industries, starting from the domestic market reforms in the 1980s through to China's international integration in the 1990s, a period which coincided with major transformations in global manufacturing. In terms of domestic market reforms in the 1980s, it first shows that an institutional economics perspective mistakenly draws too clear a line between China's planned economy and the market reforms over the 1980s. By examining reforms at the level of concrete commodities and along the value chain, the planned economy and market reforms are re-conceptualized as being deeply interpenetrated such that the vitality of China's nascent market economy grew not simply from the liberation of economic interests through institutional re-engineering, but from the structure of China's version of a planned economy.

Second, it examines China's international integration over the 1990s by analyzing the impact of the contemporary transformations in global manufacturing, in which vertically integrated production along the value chain has been sliced up and re-integrated through cross-national networks of production. This fragmentation of production introduced a new form of capitalist development in China in terms of the organization and regulation of industry and the composition of its labor force.

Finally, the dissertation's approach offers new insights into the study of China's rapid rise in regional inequality. Instead of explaining regional inequality through differences in location advantages, it finds that regional inequalities arose more from changes in regulation between direct producers along the production chain. The dissertation employs a variety of data sources, including fieldwork interviews, Chinese newspapers and trade journals, internal government documents and statistics, yearbooks and local gazetteers, industrial and population censuses and digital mapping techniques.

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