The Territorial Foundation of Marketization: Re-Examining Metropolitan Reform and Market Development in China

Keywords: Metropolian Reform, Market, China, Local Government
Session Type: Virtual Paper Abstract
Day: Sunday
Session Start / End Time: 2/27/2022 09:40 AM (Eastern Time (US & Canada)) - 2/27/2022 11:00 AM (Eastern Time (US & Canada))
Room: Virtual 18

Abstract

Territorial organization of the state is a critical device in the formation and expansion of the market. This paper investigates China’s building of consolidated metropolitan governments in the 1980s, which lays the foundation for the country’s transition to a market economy. Back then, China faced a classical dilemma of market transition: a previously planned economy needed to grow into the market, but the destabilizing power of the latter had to be kept under control. My paper argues that the reform of metropolitan government was critical for China to break free from the dilemma. Building on extensive archival works and the analysis of published and unpublished government materials, I traced the debates among central leaders from different camps and local experiments in provinces that pioneered the reform. I find that consolidated metropolitan governments accommodated market-like exchanges between urban and rural China and, at the same time, reduced the scope and intensity of market competition through regional coordination. More importantly, it allowed moderate reformers to resist the conservatives who sought to roll back market reform and the radicals who pursued rapid economic deregulation. The restructuring of China’s territorial system enables the formation of a national common market in a relatively smooth fashion.