Remaking the Chinese Leviathan (review)

In Remaking the Chinese Leviathan, Professor Yang Dali presents a strong case that the Chinese state has made "substantial progress in improving the institutional framework for economic governance" (p. 21). This book is a timely contribution to that aspect of contemporary China studies where recent scholarship on state-market relations has moved beyond broad sketches of the political system and civil society to examine specific capacities of the central and local states.¹ Yang's book is the first monograph to consider several important recent updates in state capacities in proper relation to the broader transitional context, in an attempt to assess whether the Chinese central state has gone into decline or is witnessing rejuvenation due to the impact of the market economy. As such, the book may have incurred some liability of newness in staking out an admirably clear-cut position. Undoubtedly, it will raise empirical and interpretative controversies over whether the reforms highlighted by Yang amount to a fundamental reinvention of the central state, signaling the strengthened will and capacity of the Chinese Communist Party to govern and intervene positively to bolster the market economy. This review will identify some potential areas of debate and an agenda for future research.

Yang argues that under Deng Xiaoping's prompting General Secretary Jiang Zemin engineered a dramatic paradigm shift in the vision and strategies of economic transition, as captured by the broad policy platform of a "socialist market economy" advanced in 1992. The shift is described as "China's move away from Hayekian experimentalism to Polanyian programmatic reform" (p. 7). Yang sees the Hayekian experiment in the terms of the well-known adage "groping for stones to cross the river," while the Polanyian program incorporates major aspects of a regulatory state working to promote functional markets through applications of indirect macroeconomic levers and investment in infrastructure and public goods. In breaking away from the first fifteen years of reform, Jiang was greatly assisted by the institutional and political legacy of the Tiananmen Square Incident of 1989, which Yang interprets—more positively than other scholars²—as producing a better-disciplined party-state and refurbished internal coercive apparatus, and an elite ideological consensus on a neo-authoritarian approach to economic development.

In the main body of the book Yang documents new policies and institutions in detail and offers illustrative cases of credible demonstrations of enhanced state capacity in the following issue areas: administrative streamlining, fiscal extraction, the creation of new regulatory agencies, crackdowns on smuggling, anti-corruption campaigns, institutionalized incentives for the vertical control of bureaucrats, and horizontal accountability through legislative oversight and a central auditing agency. The political-economic backdrop of these reforms is the emergence of a leaner and more penetrating central government that has divested a great deal of its complex ownership ties with businesses and can be counted on to promote a level playing field for all actors in the market.

Yang identifies a common bias in the existing characterizations of the Chinese state—developmental, rent-seeking, hybrid institutional, fragmented authoritarian, et cetera—in that they emphasize the arbitrary nature of the political regime and the opportunism of local agents. While recognizing these thorny realities, Yang sees the evolution of an increasingly legal-rational and pro-market central state as the overarching meta-narrative since 1992. On this basis, Yang explains the political stability and adroit leadership during China's market transition as being in marked contrast to the prevalent crises of governability in Russian and Eastern European dual transitions.

Yang's primary objective is to present the Chinese experience in relation to a few important ideas in comparative and area-studies literatures, rather than to break new ground in developing an original analytical framework or build a general theory based on the Chinese experience. In doing so, he relies on certain controversial premises that will no doubt stimulate further debates in the China field.

First, Yang largely de-links economic and administrative reforms from political reform in terms of citizenship and representative democracy...