UCLA

How can developing countries simultaneously participate in global markets and maintain economic sovereignty? I address this question by explaining how Maoist China (1949–1976) implemented “self-reliant” trade with the capitalist West, and especially with West Germany. Like other developing countries in the postwar period, Maoist China pursued a form of import-substitution industrialization (ISI). Unlike most other developing countries, however, China’s ISI experience adhered closely to the Maoist slogan of “self-reliance” and did not result in balance-of-payments problems and debt crises in the 1980s. Thus, China entered the decade with no external obligations, an autonomous policy environment for gradualist market reforms, and an industrial base on which to unleash them. Yet Maoist self-reliance is a puzzle for development theory. Lacking a Weberian economic bureaucracy and facing Cold War geopolitical constraints to accessing global markets, Maoist China’s internal and external conditions appear to have been hostile to successful implementation of ISI. To explain Maoist self-reliance, I reevaluate the internal and external conditions of Maoist development. I argue that the state-formation and state-building processes of the People’s Republic China interacted with the expansionary tendency of capital to enable self-reliant trade. First I trace how intra-elite, intra-state, and state-society relations favored trade bureaucracy capacity over rational domestic economic governance. Second, I show how the capitalist core saw the Chinese market as a spatial-temporal fix for overcapacity—and how the Maoist trade bureaucracy’s semi-withdrawal from global markets leveraged capitalist competition to import technology and other resources on advantageous terms. This dissertation makes three contributions. First, I develop a heuristic framework for analyzing the social foundations of institutional capacity. The framework relaxes the theoretical juxtaposition of developmental states and pockets of efficiency, inviting more comparative-historical work on variation in capacity both within the state and over time. Second, I find that overcapacity and competition can provide opportunities for geopolitically marginalized states and global capital to defy hegemonic trade policies. This finding has implications for the trade conflicts and the resurgence of industrial policy in the present. Third, I show that Maoist China’s socialist development was bound up with the fluctuations of global capitalism.