Varieties of the Regulatory State and Global Companies: the Case of China
Understanding what kind of regulatory state/capitalism China represents can be an arduous task, and the issue is still under debate. This article uses a dynamic regulatory perspective to examine how the Chinese government has changed its roles of governance and relationships with global companies. Obviously, the changes would depend on the type, scope, power and other case-by-case intricacies of global companies. Using statistics across the 100 largest global companies chosen from Fortune's Global 500, this article explores the central tendency and relationship between regulators and global companies in China. As the evidence tends to suggest, in no respect can China's regulatory choices be looked upon as those of the regulatory state represented in the literature. The regulatory tactics of the Chinese government have merely allowed it to utilize the professional/technical expertise of the more well-established and/or credible foreign actors and regulators. The Chinese government has never its compromised long-term national goals or interests.
- China is emerging as a market economy institutionally, as well as economically and politically. The entrance of global companies from established capitalist countries is part of the reason for China’s institutional evolution, but the state’s overriding desire to remain in control to protect and act in the national interest means that a commandand- control developmental orientation should be seen as largely overriding, or at the very least supplementing, what may appear to be an acceptance of a market-friendly regulatory orientation.
- As China goes through a process of institutional evolution, the state is employing approaches from different regulatory capitalist traditions. It defies clear categorization at this stage of its development. Instead, it should be best understood in terms of the aim of the regulations rather than the exercising of them. In this sense, China is best conceived as a form of developmental state. The state has a developmental, rather than regulatory, orientation despite increasingly employing regulations to meet its goals.
- Just as China should not be seen as converging on a western form of the regulatory state and regulatory capitalism, nor may it easily be conceived as a developmental state in the mould of the East Asian states that emerged earlier. Its increasing integration with the world economy, its acceptance of foreign direct investment and its accession to the World Trade Organization mean that a preference for state guidance is being reconciled with regulatory capitalism.