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Variegated Capitalism, Chinese Style: RegionalModels, Multi-scalar ConstructionsJun Zhanga & Jamie Peckb

a Department of Geography and Program in Planning, University of Toronto, Sidney SmithHall, 5025B, 100 St. George Street, Toronto, ON M5S 3G3, Canadab Department of Geography, University of British Columbia, 1984 West Mall, Vancouver,BC V6T 1Z2, Canada. Email:Published online: 09 Jan 2014.

To cite this article: Jun Zhang & Jamie Peck (2014): Variegated Capitalism, Chinese Style: Regional Models, Multi-scalarConstructions, Regional Studies, DOI: 10.1080/00343404.2013.856514

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Variegated Capitalism, Chinese Style: RegionalModels, Multi-scalar Constructions

JUN ZHANG* and JAMIE PECK†*Department of Geography and Program in Planning, University of Toronto, Sidney Smith Hall, 5025B, 100 St. George Street,

Toronto, ON M5S 3G3, Canada. Email: [email protected]†Department of Geography, University of British Columbia, 1984 West Mall, Vancouver, BC V6T 1Z2, Canada.

Email: [email protected]

(Received April 2012: in revised form September 2013)

ZHANG J. and PECK J. Variegated capitalism, Chinese style: regional models, multi-scalar constructions, Regional Studies. The paperexplores tensions between the varieties of capitalism framework and the heterogeneous particularities of the Chinese case. Ratherthan forcing the Chinese model into analytical boxes derived, primarily, from analyses of European and North Americancapitalism, this complex formation more appropriately can be understood to exist in a ‘triangular’ relationship with the twoconventional poles of varieties scholarship, the US-style ‘liberal market’ economy and the German-style ‘coordinated market’economy. Furthermore, the substantial degree of internal (regional) heterogeneity evident in the Chinese case calls into questionthose models of capitalism that focus narrowly on institutional coherence at the national scale. Illustrating this point, a range of‘sub-models’ of Chinese capitalism is examined: regional styles of capitalist development that remain distinct from one another,and deeply networked into a range of global production networks, and ‘offshore’ economies, just as they remain, to somedegree, distinctively Chinese.

Varieties of capitalism Variegated capitalism Chinese capitalism Regional development

ZHANG J. and PECK J.中国特色的多变资本主义：区域模式与多重尺度建构，区域研究。本文探讨资本主义多样性的分析框架与中国案例的非均质及特殊性之间的紧张关系。笔者认为，不应该把从对于欧洲和北美资本主义的实证分

析中所得出的理论框架强加给中国模式。更恰当做法，应是把具有复杂成因的中国式资本主义，理解为与传统资本主义多样性研究所公认的两极－－美国式的放任型市场经济与德国式的协作型市场经济－－构成三足鼎立关系。其次，中国案例所清晰显示的显著内部（区域性）非均质性，对于仅狭隘地关注国家尺度的制度协调性的资本主义理论

模式构成了挑战。本文通过考察几个中国资本主义的区域次生模式来阐释这种区域的非均质性：中国区域性的资本主义发展仍然存在着显著的差异，并且呈现深度的网络化，从而构成一系列的国际生产网络与“离岸”经济体，正如它们仍然显示出一定程度的中国特色一样。

资本主义多样性多变的资本主义中国式资本主义区域发展

ZHANG J. et PECK J. Le capitalisme panaché à la chinoise: des modèles régionaux, des approches multiscalaires, Regional Studies. Cetarticle examine les tensions entre les différentes structures du capitalisme et les particularités hétérogènes du modèle chinois. Au lieude cloisonner analytiquement le modèle chinois, principalement à partir des analyses du capitalisme européen et nord-américain,on peut comprendre à juste titre que cette forme complexe fait partie intégrante d’une relation ‘triangulaire’ avec deux pôlestypiques d’études, à savoir l’économie de ‘marché libérale’ à l’américaine et l’économie de ‘marché coordonnée’ à l’allemande.Qui plus est, le haut degré d’hétérogénéité interne (régionale) qui est évident dans le cas chinois met en cause les modèles ducapitalisme qui mettent rigoureusement l’accent surtout sur la cohérence institutionnelle à l’échelle nationale. Pour illustrer cepoint, on examine une série de sous-modèles du capitalisme chinois: des formes régionales de développement capitaliste quidemeurent distinctes, les unes des autres, et profondément reliées dans une série de réseaux de production mondiaux, et deséconomies ‘offshore’, tandis qu’elles demeurent jusqu’à un certain point typiquement chinois.

Formes du capitalisme Capitalisme panaché Capitalisme à la chinoise Aménagement du territoire

ZHANG J. und PECK J. Kapitalismusvielfalt chinesischer Art: regionale Modelle, multiskalare Konstruktionen, Regional Studies. Indiesem Beitrag untersuchen wir die Spannungen zwischen dem Rahmen der Varianten des Kapitalismus und den heterogenenBesonderheiten des Falls von China. Das komplexe Gebilde des chinesischen Modells lässt sich besser verstehen, wenn es nichtin analytische Schubladen gezwängt wird (die sich in erster Linie aus den Analysen des europäischen und nordamerikanischenKapitalismus ableiten), sondern vielmehr im Rahmen einer ‘Dreiecksbeziehung’ mit den beiden konventionellen Polen derVariantenforschung – der ‘liberalen Marktwirtschaft’ nach Art der USA und der ‘koordinierten Marktwirtschaft’ nach deutscherArt – aufgefasst wird. Darüber hinaus weckt das im chinesischen Fall sichtbare erhebliche Ausmaß von interner (regionaler)

Regional Studies, 2014

http://dx.doi.org/10.1080/00343404.2013.856514

© 2014 Regional Studies Associationhttp://www.regionalstudies.org

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mailto:[email protected]

mailto:[email protected]

Heterogenität Zweifel an Kapitalismusmodellen, die sich eng auf institutionelle Kohärenz auf nationaler Ebene konzentrieren.Zur Verdeutlichung dieses Punkts wird eine Reihe von ‘Submodellen’ des chinesischen Kapitalismus untersucht: regionaleStile der kapitalistischen Entwicklung, die sich weiterhin voneinander unterscheiden und eng mit verschiedenen globalenProduktionsnetzwerken und ‘Offshore’-Ökonomien vernetzt sind, während sie zugleich in gewissem Ausmaß charakteristisch chi-nesisch bleiben.

Varianten des Kapitalismus Kapitalismusvielfalt Chinesischer Kapitalismus Regionalentwicklung

ZHANG J. y PECK J. Capitalismo variado, estilo chino: modelos regionales, construcciones multiescalares, Regional Studies. En esteartículo analizamos las tensiones entre el marco de las variedades del capitalismo y las particularidades heterogéneas del caso deChina. Podemos comprender mejor la compleja estructura del modelo chino si, en vez de un análisis analítico forzado por secciones(que proceden principalmente del análisis del capitalismo europeo y norteamericano), la entendemos como una relación ‘triangular’entre los dos polos convencionales de la investigación sobre las variedades: la economía del ‘mercado liberal’ al estilo de los EstadosUnidos y la economía ‘del mercado coordinado’ al estilo de Alemania. Además, el grado substancial de la heterogeneidad interna(regional), evidente en el caso de China, cuestiona estos modelos de capitalismo que se centran exclusivamente en la coherenciainstitucional a escala nacional. Para aclarar este punto, examinamos una serie de ‘sub-modelos’ de capitalismo chino: los estilosregionales del desarrollo capitalista, que siguen siendo diferentes entre sí y enlazados a fondo en una serie de redes de producciónglobal, y las economías ‘extraterritoriales’, que siguen siendo, en cierta medida, típicamente chinas.

Variedades de capitalismo Capitalismo variado Capitalismo chino Desarrollo regional

JEL classifications: O18, P10, P17, P21

INTRODUCTION: INSCRUTABLECAPITALISM(S)

The varieties of capitalism (VoC) approach arguablyrepresents one of the most significant analytical inno-vations in the field of heterodox political economy inthe past two decades. Born out of critiques of one-world, free-market visions of capitalism and neoliberaltriumphalism, the origins of the VoC approach wereshaped by normatively styled defences of the integrityof the European ‘social model’ of capitalism in theface of incipient Americanization. It was these defencesof European capitalism, as a viable alternative to the USmodel, that placed the question of variety on the table.This question would inspire an increasingly sophisti-cated analytical alternative to the presumptive universal-ism of both neoclassical economics and orthodoxglobalization thinking. VoC scholarship has progress-ively elaborated the claim, first, that there are in factmultiple pathways to long-run economic competitive-ness, and second, that institutionally distinctive ‘nationalcapitalisms’ represent an enduring – rather than a transi-tory or residual – feature of the economic landscape,even under conditions of deepening global integration.

The VoC approach has been the locus of program-matic efforts at the borderlands of political science, com-parative political economy, economic sociology,institutionalist economics and, more recently, economicgeography. Its accompanying stylized facts – concerningthe ideal–typical concepts of the liberal marketeconomy (LME), modelled on the United States, andthe coordinated market economy (CME), modelledon Germany – have since earned widespread currency.Somewhat more provisionally, the VoC debate hasalso secured a measure of mainstream support for the(pro)position, at the same time a methodological

principle and an ontological plea, that spatial variationsin the form of capitalist development represent morethan merely contingent ‘noise’ around some global–universal norm, and that neither are they sequentialstages on a Rostovian escalator towards convergentmodernization. Instead, they stand for durable, qualitat-ive, in-kind differences that really matter – not only fortheory but also for politics and policy. The VoCschool has duly advanced the claim that institutionsmatter in the development and differentiation of capital-ism, since it calls attention to the ways in which econ-omic behaviour (principally, of firms) is conditionedon ensembles of institutional norms, incentives and con-straints which are seen to ‘cohere’ at the national scale.In this respect, it also stakes an implicit claim that geogra-phy matters, at least in terms of the conventional spatialityof national institutional architectures, national economicperformance, national histories of development and soforth.

PETER HALL and DAVID SOSKICE’s signature contri-bution,Varieties of Capitalism (2001b) –which refined theprevailing analytical framework, advancing a particularstyle of firm-centric political economy and stabilizingthe LME/CME binary, around which variety wouldbe patterned in a bipolar fashion – can be seen, in retro-spect, as an inflection point in the evolution of the VoCresearch programme.The preceding decade of the 1990s,when the programme first developed, had been one inwhich varieties scholarship were relatively eclectic, plur-alist and open-ended, reflecting a series of institutionalist,regulationist and sociological currents (HOLLINGS-

WORTH and BOYER, 1997; COATES, 2000). The pro-ject’s second decade, however, has not proved to beone of consolidation, but instead one of diffusion andeven dissent. Some have pursued the Hall–Soskice pathtowards rational-choice formalism, while the heuristics

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of LME- and CME-style capitalism have passed into themainstream; on the other hand, the principles and prop-ositions of the VoC approach have been subjected tointensifying rounds of critique – some constructive,others less so. Eclecticism remains a feature of the VoCresearch programme, which has witnessed creativeattempts to initiate discussions around new registers ofvariety at the regional and sectoral levels (CROUCH

et al., 2004, 2009; CROUCH and VOELZKOW, 2009b),around forms of discontinuous institutional change(THELEN, 2012), and around the balance of (enduringand new) commonalities in capitalist restructuring‘across’ varieties (STREECK, 2011). This said, there areunresolved questions around whether the originalvarieties framework should be reformed or replaced.

The purpose in this paper is not to revisit thesedebates (HALL and SOSKICE, 2003; DEEG andJACKSON, 2007; PECK and THEODORE, 2007;STREECK, 2011), but rather to explore the issues ofcapitalist variety, diversity and variegation purposivelybeyond the usual tolerances of the VoC conversation.It seeks to extend the discussion critically in two ways:in spatial and scalar terms. Spatially, the paper confrontsthe often confounding question of Chinese capitalism, aself-evidently significant case that has neverthelessremained largely beyond the reach of most VoCaccounts, at least until recently. As will be shownbelow, the Chinese case stresses received notions ofboth capitalism and variety. In scalar terms, the dramati-cally uneven development of the Chinese economy, theless-than-transparent complexities of central–localrelations, and the geographically variable connectionsthat have evolved between the country’s numerous‘regional capitalisms’ and the globalizing complex of off-shore markets, supply chains and regulatory regimes callsseriously into question received understandings ofvariety that privilege, a priori, the national scale.Accordingly, this paper first explores how the Chinesecase has been handled within VoC scholarship,moving on to problematize the variegated nature ofChinese capitalism. The paper then turns to a moregrounded analysis of Chinese capitalism(s), distinguish-ing for illustrative purposes some of its more notableregional formations and commenting on the shiftingforms of uneven geographical development in whichthese are embedded. The paper concludes with a discus-sion of Chinese capitalism as a relational construct.

THE LIMITS OF VARIETY: VARIEGATEDCAPITALISM AND THE CHINESE CASE

If the foundations of the VoC approach were forged inthe context of a certain normative affinity with theEuropean ‘social model’ of capitalism, at the sametime it has always oscillated around the conspicuousalternative on the other side of the Atlantic, and theAmerican way of relatively liberalized capitalism. This

elemental, transatlantic distinction would find its mostparsimonious expression in HALL and SOSKICE’s(2001a) stylized contrast between the LME and CMEmodels, which effectively reduced capitalist variety toa bipolar universe, winnowing down difference to thestraitened and relatively orthodox terms defined bythe LME (as an institutionalized form of a highlyliberal, almost textbook neoclassical market economy)versus a more regulated ‘other’ (derived from a mash-up of the Western European, Scandinavian and Japaneseeconomies). In principle this defined a continuum,though in practice it was argued that intermediate pos-itions were less viable, as a combination of institutionalcomplementarities and competitive synergies wouldtend to drive national capitalisms towards one or otherof the two poles. In this two-solitudes vision of capital-ism, the LME world revolves around market logics,contractualized and competitive relationships, andshort-term price signals, while CMEs are spaces ofsocial coordination, negotiated settlements and strategicpartnerships. Conventionally, the two models are pre-sented ‘in ideal–typical terms and rendered plausiblewith illustrations from the US-American or Germaneconomies respectively’ (JESSOP, 2012, p. 221).

The now-voluminous VoC literature is largely com-prised of national case studies, typically framed in ‘hori-zontal’ comparison with other national models, andfocused both on formal economic institutions (formallyassociated with wage setting, education and training,finance, etc.) and conventional measures of economicperformance (such as gross domestic product (GDP)and employment). Within the mainstream VoC litera-ture the outcome is usually an affirmation of receivedcategories of capitalism, albeit in more institutionallygranulated form, punctuated by occasional interventionsthat seek to transcend methodological dualism, stretch-ing or reworking the grid of difference itself (see,especially, WHITLEY, 1999; SCHMIDT, 2002;AMABLE, 2003; CROUCH, 2005a, 2005b; BECKER,2009; CROUCH et al., 2009). Perhaps surprisingly,China has rarely warranted much of a mention in thisliterature, either as a case or even as an offshore presence,until quite recently. It has been as if China – along witha range of other, more distant relatives of European andAmerican capitalism, such as those of Latin America,South Asia and Africa – were located off the grid ofcapitalist difference itself.

The more recent round of Chinese applications ofthe VoC framework has been creative and often sugges-tive, but it has tended to yield inconsistent, if not diver-gent, conclusions. The internal heterogeneity, culturalcomplexity and sheer size of the Chinese economyhave of course long confounded ‘imported’ theories,lending credence to what has been an equally long tra-dition of sui generis accounts of this ostensibly peerlessmodel. No surprise, then, that Chinese capitalism routi-nely seems to exceed and exhaust the classificatory reachof the VoC framework, which at its most elemental

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travels as a 2 × 5 analytical matrix: the CME and LMEideal types define the primary axis, while the dimensionsof difference are conventionally reduced to five politi-cal–economic realms: corporate structure; financialsystem; education and training regime; industrialrelations; and inter-firm relations. Encountered inthese terms, the Chinese variety of capitalism hasproved to be rather predictably ‘difficult to place’, anintractably ‘odd case’ that frustrates most readily avail-able analogies by virtue of an apparent capacity to‘creat[e] its own model of development’ (WITT, 2010,p. 3; MCNALLY, 2006, p. 16; FLIGSTEIN andZHANG, 2011, p. 59; CONLÉ, 2011). It would seemthat this globally significant Asian case cannot besqueezed into the ‘boxes’ conventionally derived fromVoC analysis, boxes that have been largely defined(and refined) mostly with reference to transatlanticcapitalisms.

Issuing all the appropriate caveats, WITT (2010)endeavours to locate China on the CME–LME axisfor each of the five political–economic domains priori-tized in VoC analysis, positioning the country closer tothe LME pole on four, but finding its highly distinctivefinancial regime to be effectively unclassifiable in theseterms. His conclusion, that China should be regardedas a quasi-LME, is far from a casual one, drawing as itdoes on a deep knowledge of Chinese businesssystems (WITT, 2010; REDDING and WITT, 2009),but it was one that in a parallel analysis, no less attentiveto either VoC criteria or the challenging specificities ofthe case, has been ‘safely reject[ed]’ (FLIGSTEIN andZHANG, 2011, p. 49). FLIGSTEIN and ZHANG’s(2011) contradictory conclusion diverges along the pri-vileged axis in VoC analysis towards the kind of CMEeconomy awkwardly exemplified, in this instance, byFrance. Dismissing the commonplace contention thatChina is on a trajectory of market liberalization,marked by gradually receding governmental roles,they seek instead to place the Chinese model in theCME camp, while recognizing that ‘th[is] idea of orga-nized or illiberal capitalism is more diffuse’ (p. 49).

With the assistance of conventional VoC categoriesand institutionalist analytical manoeuvres, Witt, andFligstein and Zhang are able to rationalize the placementof Chinese capitalism at opposite ends of the establishedLME–CME spectrum. Presumably, either the case isbeing misread in one of these treatments or the axialdimension of capitalist difference favoured in VoC scho-larship is insufficient in this instance. This need not begrounds, however, for pre-emptively dispensing withthe VoC approach. For his part, MCNALLY’s (2006,2007, 2008) varieties-style treatment of the Chinesecase is less conclusive but perhaps more constructive.McNally works more flexibly and creatively withVoC categories in order to explore the constitutivecomponents of the Chinese ‘model’, understandingthat this will likely exceed the constraints of theCME–LME continuum. Nevertheless, he also

demonstrates the utility of an augmented comparative-capitalist framework, for example, by exploring the con-tinuities and discontinuities between the Chinese modeland East Asian developmental states. A companionpaper makes the argument that the problematics ofcomparative capitalism, if not necessarily all the toolsassociated with VoC-style institutionalism, raise provo-cative and significant questions about the Chinese tra-jectory, its ‘system integrity’ at the national scale andits (changing) location within the evolving worldsystem (PECK and ZHANG, 2013).

A provisional conclusion might be that while thecomparative grid associated with orthodox VoCstudies can provoke important questions (for instance,concerning the role of financial governance andlabour regulation, and the synergies between them), itsreceived categories are unnecessarily restrictive if theyare forced into a simple form of binary alignment,leading ultimately to a monochrome diagnosis. Caseslike China, which do not seem to fit the black-and-white distinctions between the LME and CME idealtypes, are likely either to be misconstrued or to be side-lined as sui generis exceptions if the varieties sensibility isdeployed unreflexively. It is possible that not evenshades of grey will suffice; some cases should prompt arevisualization of the spectrum itself.

Some might interpret this as a licence for retreat intoexceptionalist, bottom-up or empiricist interpretation,perhaps under the ample cover provided by the recur-ring alibi that to press even a comparative capitalist analysisin such a situation is once again, to borrow SAICH’s(2002, p. 99) words, like ‘trying to fit Chinese empiricalpegs into Western theoretical holes’. With FLIGSTEIN

and ZHANG (2011), however, it is maintained herethat the idiosyncrasies of the Chinese case should notrender it immune from theorization, but there are reser-vations about whether even a reformed VoC approach isequal to this task (PECK and ZHANG, 2013). Instead, apotentially more profitable line of enquiry can buildon emergent conceptions of variegated capitalism (PECK

and THEODORE, 2007; JESSOP, 2012), which privilegethe relational analysis of unevenly developed multi-scalar and polymorphic capitalism over the search forinstitutionally stabilized ‘system integrity’ at the nationalscale, and which hold elements of connectivity andcommonality across capitalism(s) in creative tensionwith the search for geographical divergence and differ-ence. Complementing an earlier paper that was con-cerned with the reconstitution of Chinese capitalism atthe national–global scales (PECK and ZHANG, 2013),the present paper begins to elaborate a cross-scalarinterpretation of the ‘variegated capitalism’ approach,grounded in the tradition of geographical politicaleconomy (PECK and THEODORE, 2007; MACKINNON

et al., 2009; SHEPPARD, 2011). Distinctive from,although not diametrically opposed to, the VoC tra-dition, some pertinent features of the variegated capital-ism approach are summarized in Table 1.


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The variegated capitalism approach adopted here chal-lenges VoC’s methodological nationalism, with itsreliance on static and ‘horizontal’ comparisonsbetween ostensibly self-contained entities competingon (near) equal terms (PECK and THEODORE, 2007).Conventional VoC approaches pay insufficient atten-tion to what might be called the constitutive ‘outsides’and ‘insides’ of national capitalisms, the national beingthe privileged scale at which ‘coherence’ is sought(and generally found). Substantively, this work hasmade important contributions, but it also displays acertain myopia in failing to take account of otherscales. The fact that some forms of capitalism (such asexport-dependent or highly financialized systems) areeffectively predicated on others means that nationalmodels, far from being autonomous and endogenouslydriven, are actually co-dependent on other capitalisms,indeed on other models. Furthermore, national patternsof capitalist development internalize characteristic formsof uneven geographical development, in regulatory aswell as socioeconomic relations, that are integral totheir very character. Regional capitalisms, in this sense,are not just Russian doll-style mesocosms of a nationalmodel; they display a spectrum of part–whole relation-ships with the aggregate that is the ‘national economy’,not to mention distinctive modes of connection withtransnational economies. Finally, the presumption oftendential (institutional) coherence may be (increas-ingly) out of step with the revealed dynamics of net-worked, globalizing capitalism, if not an artefact of theAtlantic Fordist pattern of development (cf. PECK andMIYAMACHI, 1994).

None of this should be a licence for dismissing thenational as a scale of economic regulation and politicalaction, but it is to insist that national roles, functionsand institutional ensembles must be understood inthose multi-scalar terms through which they are pro-foundly co-constituted. A predominantly nationaloptic, in which the sub-national appears as an hom-ogenous surface while the offshore world is also strictlydemarcated, edits out far too much of the actually exist-ing variegation in that unevenly developed capitalistsystem that is, after all, the object of enquiry. And it sup-presses both global and local dynamics in the face ofmuch that has been leant about the emergent spatialitiesof capitalism (e.g., SCOTT, 2006; STORPER, 1997). It isreiterated here that VoC approaches are not at fault fortaking the national scale seriously in substantive terms,but their limitations are exposed when this scale isgranted an implicit explanatory monopoly and whenthis restrictive methodological gaze throws otherforces and formations, and other political–economicprocesses, out of focus – not least at the regional andglobal scales.

Recent developments in VoC scholarship havebegun to move away from methodological nationalism,recognizing the necessary incompleteness and partialincoherence of national institutions, while adopting a

Table1.

Varietiesofcapitalismversu

svariegatedcapitalism:analyticalcontrasts

Varietiesof

capitalism

Variegatedcapitalism

Concern

Explanatio

nof

natio

nalecono

micperformance

byway

ofinstitu

tionalm

eans

Explanatio

nof

uneven

developm

entof

glob

alizingbu

tpo

lymorph

iccapitalism(s)

Rationale

Search

forendo

geno

uslogics,reflectedin

the‘coh

erence’of

natio

nalm

odels,expressed

institu

tionally

Search

forsourceso

fmeaningfulvariegatio

nandspatial/scalarfixes,po

sitionedin

thecontexto

fshiftingmacro-ecologies

ofaccumulationandregulatio

nMethod

Agent-centric,focused

onfirm

sandrecognized

collectiveactors;rationalcho

ice

institu

tionalism

Relational,concernedwith

unfoldingof

transfo

rmativeprocessesin

space/tim

e;realist

materialism

Cases

Selectionof

advanced

capitalistcoun

tries,conceivedasrelativ

elyautono

mou

smod

els,

skew

edtowards

theUnitedStates

andEurop

eGlobal,em

bedded

with

ininternationaldivision

soflabou

randtransnationalregulatoryrelatio

ns;

broadem

braceof

casesandconjun

ctures

Dynam

icEqu

ilibria;tendencyforinstitu

tionalized

coherencearou

ndbipo

larratio

nalities

Con

tradictory

disequ

ilibria;(co)evolvingform

sof

combinedandun

even

developm

ent

Scalarity

Myopically

natio

nal,albeitin

thecontextof

competin

g(but

singular)natio

nalm

odels,

horizontally

positionedwith

inan

internationalecono

my

Multi-scalar,con

nectingcasesattheregion

al,n

ationaland

glob

alscales

throughnetw

orkand

hierarchicalrelatio

ns;co-constitutionof

econ

omiesatglob

alandotherscales

Interdependencies

Minim

al,m

odelscompete

onalevelp

laying

field;

inprinciple,‘allvarietiesareequal’

Deepinterdependence,includ

ingco-dependent

form

sofd

evelop

ment;varietiesareneverequ

al,

analytically

orin

fields

ofpo

litical–econ

omiccompetition

Diffusion

Tendencyformorerobu

stor

favoured

system

sto

spread;b

estinstitu

tionalp

ractices

associated

with

superior

econ

omicperformance;replicativelim

itsun

theorized

Shaped

bytransnationalrulesof

thegame,in

particularecologicaldo

minance

ofneoliberalism

attheglob

alscale;lim

itedscop

eforreplication

Sources:Develop

edafterPE

CKandTHEODORE(2007),and

JESS

OP(2012).


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less deterministic view of institutions (DEEG andJACKSON, 2007; CROUCH and VOELZKOW, 2009b).Eschewing the conceptual rigidity of the dualistapproach, CROUCH (2005a, 2005b) prefers to seeempirical cases as amalgams of ideal types, rather thanstanding (in) for those types. He duly refines the govern-ance approach developed by Rogers Hollingsworth andother neo-institutionalists (e.g., HOLLINGSWORTH andBOYER, 1997; HOLLINGSWORTH et al., 1994), whichhas identified six ideal types of governance mechanismsfor coordinating transactions – markets, (corporate)hierarchies, states, associations, networks and commu-nities – all of which are recognizable in real contextsand in particular (re)combinations. CROUCH et al.(2009) further argue that large and small firms invarious localities and sectors are enveloped by a differentarray of institutional layers (national, local, sectoral,world-regional, global and others), which itself tendsto prompt a series of organization problems andactions. From this perspective, a ‘national system’ is nolonger solely comprised of those institutions establishedat the national scale, but the panoply of institutions atmultiple scales to which ‘domestic’ firms have access.

Relatedly, institutions are seen as frequently theproduct of conscious design and political struggle,rather than spontaneous, functional evolution, asassumed by the complementarity thesis (cf. AMABLE,2003; DEEG and JACKSON, 2007). Firms and otheractors, conceived here not only as rule-takers but alsoas rule-makers, may move to establish a range of novel(and sometimes ‘incoherent’) governance structures,diverging from the national model but neverthelesssuiting their own needs (CROUCH and VOELZKOW,2009a). ‘Incoherent’ institutions, however, are notnecessarily counterproductive but can be even ‘creative’because it is not only by conforming to, but sometimesby diverging from, national institutions that companiesand localities can gain competitive advantage andprosper (CROUCH et al., 2009). When internal diversityproduces a loose coupling of different institutionalspheres, autonomous subsystems and governance struc-tures on the sectoral and/or local level become possible(CROUCH and VOELZKOW, 2009a, p. 6).

Such explorations of regional and sectoral VoC havebegun to open up new horizons for analysing capitalism(s) at sub-national scales. In this respect, they begin tocomplement characteristically multi-scalar approachesto variegated capitalism. This said, a number of differ-ences and indeed tensions remain. VoC approachesremain closely tied to the business literature, echoingits concern with economic competitiveness and techno-logical innovation, and tend also to treat regions andnations as (relatively) separate entities. Variegated capit-alism approaches are generally devoted to explainingspatially uneven development and polymorphic capital-ism(s), rather than uncovering economic competenciesof discrete territories. The analytical focus is thereforeplaced more on the co-dependence, co-constitution

and co-production of multiple capitalist formations,rather than identifying best practices associated withsingular modal cases. Furthermore, a defining featureof variegated capitalism approaches is an emphasis onmultiscalar rather than monoscalar forms of analysis.This is not a receipt simply for replacing the ‘nationalgaze’ of the VoC approach with an emphasis on suppo-sedly universal or convergent global logics, nor fordecomposing these into a multiplicity of regionalmodels. Multiscalar approaches are not merely ‘additive’in the sense of adding to national-scale analyses; theyopen up relational questions concerning how, forexample, regional-capitalist formations are, at the sametime, reciprocally embedded in national regimes andconstitutively connected to offshore economies and net-works. These approaches consequently emphasize themutual interdependencies and cross-case connectionsbetween ‘national’ and ‘local’ economies, rather thanprivileging the separatist analysis of endogenous ration-alities and internally coherent systems (at whateverscale).

While the VoC literature has come to incorporate anincreasingly sophisticated reading of national and inter-national political economy, it retains methodologicalcommitments to system integrity, coherence and equili-brium. Even CROUCH and VOELZKOW’s (2009a)examination of creative incoherencies tends to treatthese as temporary and sporadic deviation fromgeneral equilibria, while considering regional deviation(s) from dominant national institutions as the exceptionrather than the rule. Variegated capitalism approaches,in contrast, place more emphasis on contradiction anddisjuncture than on any presumed tendency towards(nationally scaled) institutional equilibrium. Their inves-tigation of macro logics, rationalities, and institutiona-lized conjunctures, does not privilege coherence perse, but also calls attention to the presence of sources ofenduring conflict and contradiction, and to the political(mis)management of these conditions. It follows that thevariegated capitalism problematic is concerned withcross-cutting and connective processes, such as thoseassociated with corporate integration, financial disci-pline or neoliberalization, not only as incipient logicsof unidirectional convergence, but as unevenly realizedtendencies and programmes of restructuring with vari-able (and contested) outcomes. The conjunctural posi-tioning and extra-local embeddedness of ‘local’economies and localized practices assumes a particularimportance here.

Last but not least, while sharing with neo-institution-alists the overarching objective of theorizing relativelydurable territorial economic patterns and dynamics, var-iegated capitalism approaches move beyond institution-alism. Territorial economic structures are considered asco-evolutionary with, rather than determined by, insti-tutional arrangements (SCHAMP, 2010). The evolution-ary development of firms and industries is seen to unfoldacross an historically inherited geographic surface


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unevenly endowed with tangible and intangibleresources, itself the sedimented outcome of cumulative‘rounds of investment’ and politically mediated insti-tutional building, both of which are tied to the historical‘layering’ of social conflicts and contestations locally andacross space (MASSEY, 1984, pp. 122–123).

To summarize, in contrast to the methodologicalparsimony and formulaic systematicity of the VoC para-digm, variegated capitalism approaches are more likelyto be disruptive and dissenting in orientation, to empha-size contradiction over coherence, and to be generallyresistant to rigorous codification. Differences and diver-gences from VoC conventions can be seen as a source ofcreative tensions; there is arguably much to be gainedfrom economic–geographical engagements with VoCproblematics, even as this is unlikely to lead to uncriticaladoption (PECK and THEODORE, 2007; DIXON, 2011;PECK and ZHANG, 2013). It is in this spirit that thispaper engages here with the manifestly awkward caseof Chinese capitalism, holding evidence of its multi-scalar dynamics in tension with more conventionalVoC formulations. Codifying the somewhat emergentvariegated capitalism rubric, whether in its own termsor in extended conversation with the VoC tradition,amounts to a programmatically ambitious agenda, need-less to say. The present paper represents a hopefullyindicative step in this direction. Its focus, in thecontext of this broader project, is a preliminary explora-tion of what might be considered to be regional ‘sub-models’ of Chinese capitalism. In turn, this opens upquestions of sub-national variability and divergentregional development, which have understandablybeen marginal to the concerns of VoC scholars, butwhich have important roles to play in the articulationof variegated capitalism approaches.

CHINESE CAPITALISM AS A VARIEGATEDFORMATION

The objective in the remainder of this paper is toexplore what might be termed the patterned heterogeneityof the Chinese model of capitalism. This is done not inthe interests of denying all forms of integrity, connec-tivity or coherence in the national ‘model’ of Chinesecapitalism, or with the intention of deconstructing thismodel to the point of disintegration. Rather, as a comp-lement to substantive, national scaled analyses ofChinese capitalism (PECK and ZHANG, 2013), thepaper sets out here to explore what is seen as some ofthe most pertinent sources and dimensions of variationwithin and beyond this national model, focusing specifi-cally on regional ‘sub-formations’ of capitalism andtheir (constitutive) extra-local connections. It is reiter-ated here that these do not represent autonomous orfree-floating phenomena, detached from the nationalmodel, but neither are they merely smaller-scale ver-sions of that model. Rather, what is understood by

‘Chinese capitalism’ has been jointly constituted witha range of regional ‘models’ of capitalism; it has beenconstructed through particular patterns and processesof uneven spatial development, which can themselvesbe understood to be ‘internal’ to the model, indeedimportant characteristics of that model. Exploringregional formations of Chinese capitalism is not, there-fore, simply a matter of ‘picking holes’ in, or highlight-ing exceptions to, the national model, it is part andparcel of understanding the (constitution of the)model itself. For the future of this model is likely tobe shaped by the (inherently unpredictable) politicsand competitive interplay of these regional formations.To take one example, the rise and (possible) fall of theChongqing model qua model is a case in point (THE

ECONOMIST, 2012c), which is discussed furtherbelow. The Chongqing model was promoted notonly as a symbol of Western reindustrialization, but asa renovated form of socialist-developmentalism,married to the globalizing market economy. Whilethis was never simply reducible to the political personal-ity of Bo Xilai, the scandal-drenched collapse of hisadministration can itself be read as a revelation of theintrinsic uncertainty surrounding the trajectories ofChinese capitalism, given the fierce but opaque politicalstruggles that have long characterized the upper eche-lons of its party-state system. As one pole of China’spolycentric development model, some remnant formof the Chongqing paradigm seems likely to persist. Ifone thing is predictable, in this context, it is perhapsthat no singular model will predominate in this vastand unevenly developed economy. Political perceptionsand ideological representations of these models alsoclearly matter, such that the discursive realm is also asite of continuing struggle over the meaning of‘Chinese capitalism’.

With this in mind, the point of departure is the(somewhat fraught) conception of the national modelitself, which for heuristic purposes is provisionally posi-tioned alongside the LME and CME models establishedin VoC scholarship. This discussion is followed by amore grounded exploration of five of the more distinc-tive regional sub-models of Chinese capitalism, each ofwhich for expositional purposes is tagged with a geo-graphical signifier: Guangdong, Sunan, Wenzhou,Zhongguancun and Chongqing (Fig. 1). Of course,the development styles and trajectories that characterizethese sub-models are hardly exclusive to the regions inquestion, but they do nevertheless find distinctiveexpressions there. And for present purposes, they callattention to what is regarded here as some of themore pertinent dimensions of regional differentiationwithin the Chinese model of capitalism. So for presentpurposes is not to anoint one or other of these regionalformations as an ascendant national model in waiting,but instead to open up the question of extra-nationalvariegation, since the ‘local’ character of each of thefive models is in turn related to what are unique relative


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positions both within the domestic political sphere andwith respect to global production chains and trade con-nections. Before sketching the regional models them-selves, this section begins with the still-intractablequestion of Chinese capitalism.

Chinese capitalism: between variety and variegation

Attention has been drawn here to some of the problemsassociated with attempts to position China on the singu-lar LME–CME axis, as if the Chinese case could belocated somewhere ‘between’ Germany and theUnited States. Without making such a presumption,for heuristic purposes some of the distinctive featuresof Chinese capitalism, relative to the stylized modelsof the CME and LME, are highlighted in Table 2. Posi-tioning the Chinese model, in effect, as a category of itsown enables a rudimentary form of ‘triangulation’between the two well-documented models from theVoC literature and this rather disruptive case. It alsoallows some of the dimensions of ‘capitalism withChinese characteristics’ to be highlighted in their ownterms, rather than as derivatives of received, LME- orCME-style formulations, since in some respects theChinese case really does appear to be hors catégorie,

effectively beyond conventional categorization. Onthe other hand, it could be argued that there is intrinsicvalue in placing Chinese capitalism in a comparativeframe, as well as in interrogating, stress-testing and revis-ing the VoC framework across such terrae incognitae.

Rather than reiterate the specific contents of Table 2,it is opted instead to draw four lines of notable distinc-tion. First, with respect to the pattern of industrialrelations, labour unions are neither systemically strong(as in the German/CME model of stakeholder nego-tiation), nor weak (as in the LME/US model ofmarket-disciplined marginalization), but different:unions operate with the consent of the Chinese Com-munist Party (CCP), playing roles in workplace legiti-mation and the channelling (or containment) ofconflict, while generally lacking industrial ‘muscle’ andindependent sources of bargaining power (PRINGLE,2011). At the same time, the Chinese system of indus-trial relations is marked by a volatile combination ofrepression and restiveness.

Second, the education and training system is neitherstrongly institutionalized, along the lines of the voca-tionally oriented German model, with its emphasis onadvanced technical competence, nor is there a well-developed, market-based model, as in the United

Fig. 1. Sub-models of Chinese capitalismSource: Authors


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States; rather, China’s traditionally rather fragile systemhas been developing apace, under varying degrees ofstate control and market exposure, while in manyareas seriously lagging fast-moving patterns of demandat the enterprise level (where on the job training isuneven at best), causing endemic problems of skill short-age and mismatch (LI et al., 2011b).

Third, with respect to inter-firm relations, there is apattern of heterogeneity that arguably exceeds the ‘tol-erances’ of both the LME and the CME models, since itspans conditions of extreme competitive exposure (insome export sectors) to effective state control (in‘pillar’ industries of strategic importance), while thereis also extensive recourse to interpersonal, guanxi net-works in both commercial and governmental trans-actions, in a form (and on a scale) largely absent fromthe LME and CME models (REDDING and WITT,2007). One-sided characterizations of the Chinesemodel as ‘state capitalism’ or ‘guanxi capitalism’, oreven as suppressed/insurgent laissez-faire, consequentlymisrepresent what is a constitutively heterogeneoussystem.

Fourth, the Chinese form of corporate governanceand financing is also a diversified one, with state-owned banks playing major roles, alongside a heavypresence of foreign investors and rapid growth in over-seas stock market listing, a bundle of characteristics thatagain is quite distinctive from the stakeholder/patientcapital tradition in many CMEs, as well as from theshareholder-value model more typical of Anglo-American capitalisms (KANG et al., 2008).

Such is the idiosyncrasy and heterogeneity of theChinese model – not to mention its multidimensionalpatterns of transformation, which are hardly ‘American-izing’ or ‘Europeanizing’ in any sustained or generalizedsense – that its sprawling hybrid form repeatedly exceedsand confounds the bounded coherence assumed inorthodox readings of the LME and CME models,while hardly sitting comfortably, either, in any inter-mediate position in between. Of course there areechoes of ‘foreign’ forms of capitalism in China, just asthere is evidence of neoliberalizing models of develop-ment, but these more ‘familiar’ features are oftenfound in unusual combinations, sometimes coexistingwith (notionally) antithetical forms, like heavy-handedbureaucracy and political corruption. Ironically, whilethe Chinese model sits awkwardly with the supposedlyfunctional ideal types of the LME and CME, accordingto many measures it has recently been out-performingboth. It may ‘work’, however, largely despite itself –despite the tensions and contradictions emanatingfrom an unlikely marriage between export-orientedcapitalism and the authoritarian rule of the party-state,between resilient forms of state control across keysectors of the economy and the pattern of liberalizedforeign investments and transnational engagementsenabled by the open-door policy, and between blister-ing rates of urbanization and the enduring legacies of

what remains largely an agrarian society (PECK andZHANG, 2013). If this is a ‘model’, it is one capable ofcontaining a wide array of ostensibly contradictory fea-tures, and one that has repeatedly frustrated attempts ofsimple categorization let alone functional essentializa-tion. ‘Coherence’ does not seem to be a notable feature.

Accounting for the Chinese model, in all its actuallyexisting complexity,means confronting thesemany idio-syncrasies and paradoxes, along with what are enduringsources of internal heterogeneity, rather than importingwhat may, after all, be somewhat ethnocentric interpret-ations of institutional ‘coherence’ at the national scale. Inthe Chinese case, of course, literal scale is also an issue: inpopulation and, increasingly, in GDP terms, China nowdwarfs most of its ‘competitors’. The combination of thevast, continental scale of its economy – in some respectscloser to ‘sub-global’ than conventionally national –and correspondingly high degrees of internal heterogen-eity clearly contributes to China’s well-knowninscrutability in the face of (Western) attempts at classifi-cation. The cliché that there are ‘many Chinas’ mayconsequently hold the greater truth. While some partsof the country boast development indicators comparablewith those of Sweden and Singapore, there are others forwhich the analogy of Sudan or Honduras is more appro-priate (cf. HEILEG, 2006). ‘Global’ rates of inequality anddifferentiation are therefore ‘internal’ features of Chinesecapitalism, as Fig. 2 illustrates. How might these differ-ences be approached more systematically?

Recent neo-institutionalist work is beginning toexplore the coexistence of variable state and businessforms within China. CONLÉ (2011), for example, por-trays China as a complex system internalizing a corecomponent, based on a dominant developmental state,along with two peripheral sub-systems each governedby business-corporatist states, one marked by a relativelypassive involvement in economic development and theother more collaborative in form. In order to develop ataxonomy of China’s regional models, he further ident-ifies three institutional layers according to geographicproximity and functionality: a macro-regulatory frame-work consisting of competition policy, intellectualproperty rights and industrial policy; a meso-layer gov-erning the markets for firms’ knowledge, labour andcapital inputs; and a complex of private networks, atthe micro-level, providing firm-specific input factors.Accordingly, Conlé classifies China’s sub-nationalmodels on the basis of region-specific state functionsand network configurations.

In a parallel vein, the starting point for understandingthe spatial heterogeneity of Chinese capitalism is thescale and diversity of the country’s industrial economy.This can be characterized as a three-tier structurerather than a monolithic whole (ERNST and NAUGH-

TON, 2008). The first tier comprises large, monopolisticstate-owned enterprises (SOEs). Accounting for aroundone-third of GDP, SOEs dominate ‘basic’ and strategicindustries like power and energy supply, resource


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Table 2. Comparison of coordinated and liberal capitalisms with the Chinese ‘model’

Coordinated market economies Liberal market economies A Chinese variety of capitalism?

Industrial relations Coordinated of wage determination across key industries (involvingemployer associations and unions)

Employee-elected bodies and representative bodies play key roles incompany decision-making

Company-based, uncoordinated wage bargainingInstitutionally weak unions with limitedworkplace presence

Company-based, uncoordinated wage bargainingParty-controlled unionsSharp urban–rural divide

Education and training Strong systems of vocational education and training, with stakeholderinvolvement

Limited post-compulsory/higher education

Market-oriented; weak systems of vocationaltraining; limited company involvement

Strong post-compulsory/higher education

Emphasis on general skills, weak vocational training; skillsmismatches

Low enrolment rates in further and higher educationBrain drain/circulation

Interfirm relations Consensus-based standard settingBusiness associations regulate relational contractingClose relations between business associations and research/educationinstitutions

Mitigated of competition in domestic markets; open competition inexport markets

Market-based standard settingStrong anti-collusion policiesUnderdeveloped institutional framework fortechnology diffusion

Weakly regulated relational contracting

‘Managed competition’ in strategic technological sectorsfavouring ‘national champions’

Foreign dominance and open competition in export-oriented sectors

Dominance of family and guanxi networks, plus patron–client ties, in private economic coordination

Weak legal enforcement and limited protection ofintellectual property rights

Corporate financingand governance

Stable stakeholder arrangements, with banks playing a monitoring roleReluctance to finance higher risk ventures and technologiesIndustry-based monitoringHostile takeovers difficult

Unstable shareholder arrangementsOrientation to higher risk capital marketsHostile takeovers permitted

Corporate financing dominated by state-owned banksFinancially starved private firms coexist with ‘spoiled’state-owned enterprises

Soaring overseas stock market listing of domestic firmsLarge-scale foreign direct investment in technologicallyadvanced sectors

Examples Germany (paradigmatic case); Japan, Austria, Switzerland, Italy,Belgium, the Netherlands, Denmark, Sweden and South Korea

United States (paradigmatic case); UK,Canada, Australia and New Zealand

China (extra-paradigmatic case)

Source: Adapted from PECK and ZHANG (2013).

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extraction, media and telecommunications, transpor-tation, construction, and banking. The SOEs, whichexemplify the traditional ‘big-is-better’ model of indus-trial organization, have the benefit of ready access to

state-owned bank financing, in addition to dense websof political connectivity. The second tier consists ofmostly medium-sized firms operating in competitivemarkets, albeit exhibiting diverse forms and origins:

Fig. 2a. Internal ‘worlds’ of Chinese capitalismSource: Authors’ rendering of data from THE ECONOMIST (2013)

Fig. 2b


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this group includes foreign-owned companies, smallerplayers in the state sector, domestic Chinese start-upsand their many hybrids. The high-technology com-ponent of this sector, which often with close ties tolocal politicians and collaborative links to foreign

firms, represents one of the most dynamic parts of theChinese economy today. Finally, the small-scale sectorforms a third tier, with a plethora of mostly privatizedtownship and village enterprises (TVEs) and smallfamily-run private firms, most of which occupy

Fig. 2c

Fig. 2d


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relatively low technology, labour-intensive sectors.These various tiers are characterized by different owner-ship forms, sources of finance and patterns of labourutilization.

Since the late 1970s, the Chinese economy hasexperienced an unprecedented wave of privatizationand liberalization, yet its industrial system remains in aprocess of dynamic evolution. It could be argued,however, that the Chinese economy has exceeded aseries of critical thresholds such that it can now bereliably referred as a form of capitalism, even if notone of the standard ones (PECK and ZHANG, 2013).The tripartite system has become more or less stabilizedunder the existing political regime, itself reflecting aunique marriage of a single-party Leninist state and anescalating programme of market reforms. The rulingparty has maintained a precarious balance of economicopenness and political control, so far, by way of asprawling web of financial relays and patronage relations(NAUGHTON, 2008). China’s almost peerless marriageof political continuity and transformative economicchange positions the country as an idiosyncratic case inthe global family of capitalisms, but it also means thatthis is something of an outlier in the cluster of post-socialist ‘transition economies’ (LANE, 2007), sinceChina has not been subject to shock treatment or struc-tural adjustment, while its ruling elites have fashionedtheir own version of ‘transitology’ quite different fromthose developed in the Soviet Bloc.

This distinctive economic system has evolved inconcert with, while also contributing to, the deep geo-graphical divides found in China, between urban andrural areas, and inter-regionally. The historically sedi-mented and regionally uneven pattern of industrialdevelopment has been further reinforced by durableregional disparities in the distribution of key resources(in terms of universities, research institutions, andhuman capital), as well as a pattern of highly variable lin-kages to the outside world. The Chinese inter-regionalsystem is thus characterized by immense, enduring dis-parities – many of which are still widening – innatural endowments, industrial structures, living stan-dards, educational attainment, technological capacities,market orientations, capital intensity, investment pat-terns and exogenous connectivity (ZHOU et al., 2011).These geographical divides have been the drivers ofmassive migration flows for several decades now, on ascale unprecedented in human history (FAN, 2008),out of regions of rural poverty and into the high-growth zones, especially the major cities and the indus-trialized belt along the south-eastern seaboard, althoughthe global crisis initiated return flows on a large scale(ZHANG, 2014). When China embarked on its capitalisttransformation, in the late 1970s, nearly 80% of itspopulation resided in rural areas, being primarilyengaged in agriculture. A rolling programme ofreforms of the rural economy not only raised agriculturalproductivity, but also displaced a vast reserve of

‘floating’ labour, which would be put to work mostlyin the coastal factories of the Pearl River Delta (PRD)and Yangtze River Delta (YRD), ‘flexibly’ and at a frac-tion of the cost of urban workers (LEE, 2007; HUDSON

et al., 2010). In this respect, the Chinese ‘model’ waspredicated, from the start, on uneven spatialdevelopment.

Even today, China remains an archipelago ofcapitalist urban formations within a sea of rural underde-velopment. Official estimates of the floating population– mostly peasants living outside their registered homeregions – reached 261 million by 2010, an 81% increaseover 2000, which exceeds the total volume of inter-national migration worldwide (NATIONAL BUREAU

OF STATISTICS (NBS), 2011; INTERNATIONAL

ORGANIZATION FOR MIGRATION (IOM), 2010).While the growing coastal regions, especially Guang-dong province, have been the principal destination formigrant workers, the main ‘sending’ areas have beenthe poor and densely populated interior provinces,such as Henan, Sichuan and Chongqing. In thiscontext, China’s hukou regime (the householdregistration system), which links various entitlements –including pensions and access to education andhealthcare – to the home region has effectively fostereda situation of dualized economic citizenship (CHAN,2009; FAN, 2008), sharply segmenting the labourmarket and depriving migrant workers of both socialrights and meaningful access to services. By maintainingthis form of second-class citizenship – by permittingpeasants to work in cities only as ‘temporary’ migrants,through the denial of urban hukou – the Chinese statehas fashioned a migrant labour regime uniquely tailoredto low-cost, labour-intensive industrialization and urbandevelopment, largely at the expense of the migrantworkforce itself. In its separation of the productionand reproduction of labour, moreover, the hukousystem renders urban workplace organization and evencommunity stability much more difficult to achieve(CHAN, 2010).

The high rates of economic development that Chinahas registered in recent years, and the vast inter-regionalmovements of labour and capital that these haveentailed, have all taken place in the context ofentrenched forms of uneven geographical developmentliterally thousands of years in the making. After 1949,China’s historically uneven regional economic patternwas reinforced by the Mao’s insistence on regionalself-reliance, which stunted the process of interregionalfunctional integration, fostering what has been called a‘cellular economy’ (DONNITHORNE, 1972). Through-out the history of the People’s Republic of China, econ-omic policies have been framed, correspondingly,around various forms of regional specialization, fromMao’s programme of heavy industry-led developmentand the Third Front Project,1 through Deng’s strategyof experimental liberalization, focused on the coastalareas, to the most recent rounds of Western


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industrialization (WEI, 2010a; ZHANG, 2014). Theoverall effects of these macrospatial programmes have,in a profound sense, been cumulative; successivereform efforts have been ‘layered’ on their predecessors.

In marked contrast to the post-communist transitionsof Soviet sphere that took the much more radical formof ‘shock treatment’, substantially destroying and thenselectively rebuilding institutional capacities, theChinese path of institutional transformation has beenan incrementalist and a spatially targeted one. Theresulting ability to sequence reform, and to managecarefully forms of political or socioeconomic falloutthat might threaten the regime, has meant that the pro-digious capacities of the Maoist–Leninist state have beenretained largely intact as China has moved towards anincreasingly market-developmental posture. Today,political power remains firmly concentrated in thehands of the CCP, the far-reaching powers of whichspeak to a form of national territorial integrity, at leastas a durable political fact. At the same time thesepowers are constituted through a complex of central–local relations which again often confounds receivedunderstandings of centralized planning or bottom-updevelopment. The Chinese model of central–localrelations is both but neither of these: it combines centra-lized party discipline and entrepreneurial localism,hydraulic redistribution with institutionalized‘GDPism’ (a system of interregional resource allocationpegged to local economic growth rates), dirigiste devel-opment and deregulated marketization. What has beencharacterized as a regionally decentralized authoritarian(RDA) system combines authoritarian political controlat the centre with considerable economic autonomy atthe local scale (LANDRY, 2008; XU, 2011). Thissystem, the logic or ‘coherence’ of which residesneither at the national or local scale in a singular way,but is established between them (i.e., relationally), rep-resents the basic institutional architecture within whichChina’s network of regional capitalisms are embedded.This is much more than (regional) variation around a(national) norm, since experimental heterogeneity andinterregional competition are integral to the system’srationale. In organizational terms, then, there is varietywithin variety (cf. DEEG and JACKSON, 2007).

Deng Xiaoping initiated a new round of centrallycoordinated regional specialization and institutionaliza-tion. His incremental reforms rested heavily on the prin-ciples of devolution and experimentation, opening upselected regional enclaves for profit-driven production,often in conjunction with ‘overseas’ Chinese capital,and deploying ‘zoning technologies’ like Special Econ-omic Zones (SEZs) as means for trialling new businessarrangements and governance models (ONG, 2004;ZHANG, 2012). Zoning became emblematic of nation-alist reform thinking, defining the spatial template forreformist economic planning and industrial develop-ment, establishing laboratories for new forms ofmarket-oriented development, and incubating new

styles of decentralized reform leadership. In addition tothe seven officially entitled SEZs, the Chinese state hascreated literally thousands of zoning initiatives, includ-ing free-trade zones (FTZs), export-processing zones(EPZs), high-technology industrial development zones(HIDZs), industrial parks, free ports, and enterprisezones – each with a distinctive focus and rationale,and each endowed with its own pattern of preferentialpolicies and institutional autonomies (ZENG, 2010).Crucially, this means that the coastal-industrial enclaves,which for many ‘define’ Chinese capitalism, and whichare now being imitated by the fast-developing inlandregions, were never rolled out in accordance to a singu-lar, overarching model, but emerged through the exper-imental (co)evolution of a number of models, in effect asa loosely coordinated, sub-national network of ‘regionalcapitalisms’.

No less significant than the internal geographical,social and regulatory differentiation of the Chineseeconomy, however, are the particularities of theunique global conjuncture within which the country’sdevelopment has been constitutively embedded. Thestarting point for the contemporary evolution ofChinese capitalism was outside capitalism itself. Politi-cally, China’s development was facilitated by its lateCold War embrace by the United States, as a counter-weight to the Soviet Union, following the Nixon–Mao rapprochement of 1972, which ended decades ofcultural and economic isolation. Economically,China’s policy of selectively ‘opening up’ to offshoretrade and investment, from the late 1970s, coincidedfortuitously with the extension of global supply chainsbeyond the Asian tigers, in search of lower-costlocations, while at the same time drawing on the organ-izational capacities and capital reserves of a complemen-tary form of diasporic capitalism – the overseas Chinese.And in macro-regulatory terms, this was also the begin-ning of a long-term (neo)liberalization of internationalfinancial, trade, and investment flows, signalling theemergence of a capital-centric mode of global growththat was not only broadly compatible with but highlyopportune for China’s development strategy, even asthe CCP’s posture would remain a ‘loose hug ratherthan an intimate embrace’ of the neoliberal model as atemplate for internal reform (LIEW, 2005, p. 349).

The historical singularity of the Chinese developmentpath has been such that it seems unlikely ever to furnishan analytically convenient, unitary model. Its transitionto polycentric capitalism (initially, but as many wouldargue residually) within a socialist integument, occurredin the context of an abnormally high degree of pathdependency, reflected in a measure of institutional andpolitical robustness rare in the post-communist world.Deng’s incrementalist and experimental policy – of‘crossing the river by feeling for stones’ – shrewdly side-stepped the risks of gambling on a single developmentmodel. The array of globally connected and regionalizedneo-capitalisms that subsequently bloomed, variably


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facilitated inter alia by offshore connections to Chinese-diaspora capitalists, by the liberalization of globaltrading regimes, and by the competitive vulnerabilitiesof mass production economies in Western Europe andNorth America, must therefore be understood as com-ponents of a heterogeneous whole, not as offshoots of asingular model. It is in this context that the specificitiesof some of China’s regional sub-capitalisms, to whichthis paper now turns, should be appreciated. Pursuantto the argument here – that the frame of nationallyscaled institutional coherence is unproductively restric-tive in the Chinese case – this paper begins in deliberatelyprovocative terms, in cross-border territory, with theoffshore precursors-cum-enablers of Chinese capitalism:Hong Kong and Taiwan. In the early stages of the coun-try’s market transition, these formations of ‘Chinesecapitalism outside China’ were vital stepping stones inwhat was a still-uncharted journey across the river. Fol-lowing this, this paper provides capsule descriptions offive of the most prominent regional sub-models ofChinese capitalism – Guangdong, Sunan, Wenzhou,Zhongguancun andChongqing (Fig. 1) –with particularreference to the analytical dimensions emphasized inVoC studies, namely labour relations, education andtraining systems, interfirm relations, and corporate finan-cing and governance.

Hong Kong and Taiwan: extra-territorial Chinese capitalisms

While actively facilitated by reform politics, Chinesecapitalism was hardly home grown; in fact, it began asa substantially ‘imported’ model, assembled onshore –in other words a cross-border construction. China’seconomic takeoff during the reform era was duly con-centrated around the coastal export-oriented regions,themselves positioned at the nexus of the reform pro-gramme and the ‘relocation’ of manufacturing capacity,investment capital and business expertise from the so-called ‘China Circle’, especially Hong Kong andTaiwan (NAUGHTON, 1997). The ‘open door’ policylargely worked by virtue of what was on the otherside of the door. In this sense, ‘Chinese capitalism’, inits offshore form, pre-existed and then facilitated the‘onshore’ model, the latter being a transnational andregionalized construction from the start.

Under British colonial rule, Hong Kong had beentransformed from a ‘barren rock’ to the ‘Pearl of theOrient’, an entrepôt handling Anglo-Chinese trade aswell as a significant financial centre (SO, 2004).Heavily represented among the island’s business classwere those industrialists who had fled from Shanghaiafter 1949, later to be joined by a massive influx of refu-gees from China in subsequent years. Hong Kong’srapid rise since 1950s as an export-driven manufacturingcentre was predicated on this fortuitous match betweena savvy entrepreneurial class, international political–economic connections, and an abundant supply ofcheap and diligent refugee workers. The cluster of

overwhelmingly small, guanxi-based, and Chinese-owned private firms pioneered and perfected a contractproduction system during the 1960s and 1970s, stronglyoriented to the global market (TAO and WONG, 2002).As the Chinese economy was selectively opened after1978, many of Hong Kong’s land- and labour-intensiveproduction activities were rapidly relocated to neigh-bouring Shenzhen and Dongguan, along with othercities in the PRD, securing significant cost savingswith minimal disruption of management and controlfunctions (SO, 2004; SIT and YANG, 1997). HongKong has thus transformed from a manufacturingcentre to a servicing and coordination hub dominatedby manufacturing-related producer services, a head-quarters location for Asia-Pacific multinationals, par-ticularly from the Chinese mainland, as well as anoffshore venture capital centre for Chinese enterprises.

Once described by Milton Friedman as the world’sgreatest experiment in laissez-faire capitalism (THE

ECONOMIST, 2010a), Hong Kong has long exhibitedproto-neoliberal state forms, with little by way of indus-trial policy and trade control. The labour regime has alsoremained heavilymarket oriented, eschewing centralizedwage-setting, compulsory collective bargaining, andeven minimalist industrial relations institutions, at leastuntil very recently.2 Although Hong Kong boastsseveral top universities in Asia and a strong record ingeneral education, this has never been coordinatedwith concerted efforts to drive productivity and qualityimprovements across the enterprise sector, or toupgrade technological capabilities (TIPTON, 2007).Hong Kong has remained a trading and services-dominated society, falling short in research and develop-ment (R&D) capacity and technological innovation. Theisland was instrumental in shaping a distinctive, cross-border pattern of economic transformation, enablingthe rapid growth of an imported form of industrial capit-alism on the mainland by way of a blend of plant reloca-tion, external control and offshore capitalization, albeitmostly in the absence of skills or technological upgrading(CHIU and WONG, 2004; YANG, 2007).

Taiwan’s experience has been vastly different,though in its own way ultimately complementary. Itsfounding government comprised the retreating Repub-lic of China (ROC) administration, which fled Nanjingin 1949, together with some 2 million soldiers and a sig-nificant political, intellectual and business elite. A rollingprogramme of industrialization policies began in the1950s, which saw Taiwan emerge as one of the paradig-matic developmental states, with a state-owned bankingsystem and a small and medium-sized enterprise (SME)-dominated industrial structure (WADE, 1990). TheROC government has remained a staunch ally of theUnited States since the Second World War, capitalizingon close ties with the American political and economicestablishment. Among the country’s landmark initiativesin state coordination are the Industrial TechnologyResearch Institute (ITRI), established in 1973 and


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modelled after Stanford Research Institute, and theHsinchu Science-based Industry Park, formed in 1980as a variant of the Stanford Industrial Park, wheredynamic clusters of foreign and domestic high-technol-ogy firms operate in close proximity to leading-edgeresearch laboratories (ERNST, 2010). A domesticventure capital industry was subsequently developed,also following the Silicon Valley model, after the mid-1980s (SAXENIAN, 2006).

Since the early 1960s, global production networks(GPNs) have been extending rapidly across East Asia(HENDERSON et al., 2002). The US semiconductorcompany Fairchild established a factory in Hong Kongin 1961; and Philips of the Netherlands opened a plantin Taiwan the same year (WADE, 1990). Since thattime, both Hong Kong and Taiwan have gained entryto global technology markets through original equip-ment manufacturing relationships with electronics retai-lers. With the support of its developmental state, Taiwandeveloped an elaborated regime of hierarchical subcon-tracting, the ‘satellite assembly system’ (HAMILTON,1997, p. 284), comprising several tiers of production sub-contracting across layers of small andmedium-sizedman-ufacturers. The integrity and the competitiveness of thissystem were predicated on guanxi-networks and trustrelationships, facilitating fluid communications, togetherwith the sharing of orders, production facilities, andpersonnel (FIELDS, 1995).

Taiwan’s economic liberalization process has beenrelatively cautious. The economy’s ‘managed opening’reflects a prevailing political–economic ideology thatcan still be characterized as ‘developmental paternalism’(DEYO, 1989; HAN and CHIU, 2000). The country hasdeveloped a remarkably strong tertiary educationsystem, in the process training a large cadre of engineersequipped not only to capitalize on imported technol-ogies but to advance and develop these in the serviceof domestic firms (WADE, 1990). Since the 1960s, theacquisition of higher degrees from leading US insti-tutions has become a rite of passage for students fromthe Taiwanese elite, especially in the fields of scienceand engineering (SAXENIAN and HSU, 2001).3

Between 1986 and 1996, more than 40000 overseasChinese returned to Taiwan from the United States(SAXENIAN, 2006, p. 148). These returnee engineersand entrepreneurs were instrumental in the develop-ment of Taiwan’s world-leading semiconductor andventure capital industries during the 1980s and 1990s.The now well-established Silicon Valley–Hsinchurelationship consists of countless formal and informalcollaborations between investors, entrepreneurs,SMEs, along with the divisions of large companieslocated on both sides of the Pacific (SAXENIAN, 2006,p. 135). SAXENIAN (2006) has coined the term ‘braincirculation’ to call attention to the mutually beneficialeffects of this reciprocal relationship.

Under hostile geopolitical environment of cross-straittensions with China, Taiwanese investment on the

mainland was forbidden by the ROC governmentuntil 1988. However, under relentless pressure byglobal brand marketers to reduce costs and time tomarket, most Taiwanese information technology manu-facturers began to relocate manufacturing activities toChina once the investment ban was lifted (ERNST,2010). This has allowed Taiwan to secure the status of asecond-tier player in the global information technologyindustry, and a key node in the technology-basedGPNs, propelling the country to second place (behindonly Hong Kong) in the league table of foreign investorsin China, with a pattern of investment heavily focused, asdiscussed below, on the Suzhou region (CHEN, 2002). Incontrast to Hong Kong’s locked-in position with lowvalue-added, buyer-driven supply chains, Taiwanesefirms have been upgrading proactively, although theystill must operate on razor-thin profit margins barely suf-ficient to support investment inR&D, intellectual-prop-erty creation and branding (ERNST, 2010). The countryhas therefore played a distinctive role, alongside HongKong, as a shaper of initially extra-territorial and latercross-bordermodels of regionalized ‘Chinese’ capitalism,initiating an ongoing process of restless, mutual trans-formation. There could be few clearer illustrations ofthe need for varieties-style scholarship to reach beyondthe boundaries of the nation-state, in order to appreciatehow (new) capitalist forms are being forged translocallyand transnationally.

Guangdong: dormitory regime in transition

By the same token, the Guangdong model – and indeedthe wider PRD region – exhibits geographically distinc-tive pattern of development which is predicated onexternal networks and hierarchical relations. This‘regional’ formation is functionally inseparable bothfrom Hong Kong (with which it shares linguistic andcultural similarities, as well as tight economic linkagesand spatial propinquity) and from Beijing (in light ofthe 1979 policy decision to establish three of the firstfour SEZs in Guangdong, which set the terms, and inmany ways the ‘rules’, for its subsequent development).Deng’s open-door policy actively facilitated, indeedencouraged, the colonization of Shenzhen, Dongguan,Guangzhou and many other cities in the PRD byHong Kong capital, finance and production networks(ZHANG, 2012). With remarkable speed, an export-oriented, ‘front shop-back factory’ model of develop-ment was forged, in which the PRD functioned as theproduction base while Hong Kong controlled market-ing and finance (SIT and YANG, 1997).4 Hong Konginvestors characteristically operated as ‘merchant entre-preneurs’, mainly concerned with securing short-termfinancial returns (YANG, 2007), displaying no interestdeveloping those more enduring relationships with sup-pliers and customers usually deemed necessary to pro-ductive upgrading and sustained innovation.


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The PRD’s export-oriented production regime wasdeveloped on the basis of low-skill, labour-intensiveactivities. Dependency on price-sensitive exportmarkets and foreign capital has been associated withsub-par levels of R&D investment and labour-pro-ductivity growth (ZHOU et al., 2011). However, byvirtue of Shenzhen’s special status, as Deng’s signaturezone for experimental reregulation, the city hasenjoyed first-mover advantages in terms of political con-nectivity, regulatory accommodation and strategicpublic investments. Selected as the site for one ofChina’s two stock exchanges, Shenzhen has also beenable to capitalize on an unusually high degree of localpolicy-making autonomy, including the right to initiatelocal legislation. This has enabled the city to be muchmore successful than the PRD region as a whole in tran-sitioning from the original export-processing model to apattern of technological upgrading, based on enhancedR&D capacities. Shenzhen now boasts some of themost prominent information and communication tech-nology (ICT) enterprises in the country, includingHuawei, ZTE and TCL (WANG and LIN, 2008).Since the mid-1990s, foreign investment flows havebecome increasingly diversified: although Hong Kongremains the single most important source, investorsfrom Taiwan, Japan, Singapore, the United States andSouth Korea now all play much more important roles(ZHAO and ZHANG, 2007). Nevertheless, low-technol-ogy, labour-intensive, export-orientation remain defin-ing features of the Guangdong model.

Guangdong has also remained the most attractivedestination of interprovincial migration (FAN, 2008).Its ‘dormitory labor regime’, in which migrantworkers are accommodated in or near the factory com-pound, facilitates a near-complete form of labourcontrol. Managers are therefore able to impose ‘flexi-bility’ on a unilateral basis, to suppress wages and toextend the length of the working day (PUN andSMITH, 2007). Temporary migrants, in this context,possess very little bargaining power (LEE, 2007).‘Voice and exit’ is more common than ‘voice andstay’, as workers find it easy to move to other employersin the region. High labour turnover rates mean thatworkplace organization and community stability areboth difficult to achieve. This has begun to change,however, with the intensification of labour unrestamong migrant workers, protests having becomeincreasingly tactical, coordinated and indeed radicalover time – even as workplace union organizationremains impeded by the absence both of the right tofree association and effective means of institutionalsupport (CHAN, 2010; PRINGLE, 2011).

The widely publicized string of suicides in 2010 atthe Shenzhen operations of Foxconn, the Taiwan elec-tronics manufacturer, coincided with a surge in workerradicalism and international condemnation of workingconditions (BARBOZA, 2010). Double-digit wage risesacross the region have in turn triggered a wave of

closures among low-margin factories, with the tacitapproval by Beijing, in light of the strategic goal ofupgrading the export-led economy (GAPPER, 2011).Central government policies now favour regionalwage growth in an effort to boost domestic consump-tion, while a major effort is also underway to transferlabour-intensive industrial operations from the coastalzones to inland zones in the West, such as Chongqing.This has unleashed a process of creative destructionacross Guangdong’s sprawling industrial cities: somecompanies are investing, in situ, in value-adding strat-egies; some are closing down; and many are relocatingto lower-cost sites either inland or offshore, to countrieslike Bangladesh and Vietnam (YANG, 2012; ZHANG,2014).

Sunan: transnational technology complex

Sunan was China’s original industrial region, being wellestablished as a manufacturing centre by the late 19thcentury (WEI et al., 2009; WEI, 2010b). Sunan com-prises that part of Jiangsu Province to the south of theYRD which includes the cities of Suzhou, Wuxi andChangzhou. Densely populated and agriculturallyadvanced, Sunan stagnated during the Mao era,though it developed robust socialist institutions whileretaining a tradition of small-scale handicraft productionin the countryside, which would evolve into a networkof communal enterprises during the late 1950s (ZHANG,2008, pp. 33–34). After 1978, with the aid of powerfuland proactive local governments, this sector maturedinto a prototypical model for China’s TVEs (VEECK

and PANNELL, 1989). These collectively managedTVEs received guaranteed loans from local govern-ments and other types of preferential treatment, estab-lishing the basis for a Sunan model conceptualized byJean Oi (OI, 1999) as ‘local state corporatism’. Whilethe TVE sector expanded, however, the private sectorremained relatively underdeveloped; financing andregulatory arrangements both favoured collective enter-prises (TSAI, 2007). The rapid expansion of TVEs trans-formed a large number of local farmers into factoryworkers, pioneering a model of industrializationwithout urbanization, or what became known as‘leaving the soil without leaving hometown’ (FEI,1989).

In the 1990s, Beijing began to shift the focus of econ-omic reform efforts away from the PRD region andtowards the YRD, establishing Pudong as a NewOpen Economic Development Zone, with a view topositioning Shanghai as the ‘dragon head’ of the YRDand an economic locus for China as a whole. In thiscontext, the Sunan TVEs have been progressively priva-tized (or transformed under multiple ownershiparrangements), becoming increasingly integrated intoGPNs led by Singaporean and Taiwanese investors insectors like information technology and advancedmachinery (SHEN and MA, 2005). The Sunan model


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has therefore transitioned from rural industrialization to‘rural internationalization’ (ZWEIG, 2002). FollowingDeng’s 1992 ‘southern tour’ and the opening of thePudong New District, local governments in Sunanbegan appropriating farmland for industrial parks forjoint venture initiatives, offering foreign investors avariety of concessionary inducements. Prototypical ofthe Sunan model, the municipality of Suzhou hasbeen transformed into a globalizing city, spearheadedby the China–Singapore Suzhou Industrial Park (SIP)(WEI et al., 2009). By 2009, Sunan had established tennational-level economic development zones and 38provincial ones (ZHOU, 2009). Given its proximity toShanghai and its tradition of more business friendlyand administratively competent local states than thePRD, Suzhou has become a major destination forforeign investment, especially in the Taiwanese infor-mation technology sector (ZHAO and ZHANG, 2007;WANG and LEE, 2007).

By the early 2000s almost all the leading firms in themajor sectors of Taiwan’s information technology indus-tries had located manufacturing facilities in the GreaterSuzhou Area (YANG and HSIA, 2007). ‘The henbrought little chickens together’ is how HSU (2006,p. 240) describes the strategy of Taiwanese investors: thisinvolved the wholesale relocation of the ‘satellite assemblysystem’, including all its suppliers, from Taiwan toSuzhou. This was predicated, first, on high levels oflocal-state capacity and organizational expertise, legaciesof the socialist–corporatist past unavailable in regionslike the PRD (YANG, 2007), and second, by the extensiveuse of Taiwanese investors’ associations (TIAs), present inmany of Suzhou’s major cities, which proactively shapedevelopment agenda setting while bargaining collectivelywith government agencies, in contrast to the Guangdongpattern, which is based on the interpersonal networks ofHong Kong investors (HSU, 2006; YANG, 2007).

Following this massive inflow of foreign investors,the demand for migrant workers has been rising inSuzhou, but their share in the total workforce remainssignificantly lower than that in the PRD. In contrastto Hong Kong’s ‘merchant entrepreneurs’, the Taiwa-nese are regarded as ‘industrial entrepreneurs’, compet-ing more on quality than on price (YANG, 2007). Thishas been associated with more benevolent and progress-ive capital–labour relationships than the archetypicaldormitory regimes of Guangdong. The Taiwanese man-ufacturing sector has evolved from a system of strictshop-floor control to one based on technologicalupgrading and the promotion of local managers (HSU,2006). Similarly, Singaporean investors have also leftan imprint on the industrial relations culture at Sunan.SIP has developed a unique social-welfare system imi-tating Singapore’s provident fund model. Migrants toSIP are permitted admission to local hukou; they experi-ence lower levels of institutional discrimination andhigher rates of participation in social insurance than else-where (LI et al., 2011a).

There is a growing sense, however, that the absenceof highly ranked domestic universities and research insti-tutions in Sunan has begun to hinder the developmentof local technological capacities (WEI et al., 2009).R&D activities remain dependent on transnational cor-porations (TNCs) or external institutions, with limitedspillovers into the regional economy. As a result,supply linkages between foreign-owned and localfirms are generally weak, though this is beginning tochange (WEI et al., 2009). Suzhou is making concertedefforts to attract and cultivate human resources, and todevelop indigenous R&D capacities. For example, ahigher education district was created to host localbranches for universities and research institutions,including a new jointly founded international universityby Xi’an Jiaotong University of China and the UK’sUniversity of Liverpool. As a result, although theSunan model has been under pressure from risinglabour and land costs, this has been less severe than inGuangdong.

Wenzhou: Marshallian development in crisis

A hilly and geographically isolated coastal city in Zhe-jiang province, Wenzhou struggled economicallyduring the Maoist era while retaining a long traditionof handicraft and mercantile skills, latent capacitywhich was later converted into a sustained, post-1978growth pattern, based on private, family-run TVEs,organized in specialized industrial clusters (WEI et al.,2007). Located at the periphery of the socialist stateand often overlooked by Beijing, Wenzhou’s local gov-ernment had neither the resources nor the capacity todevelop collectively owned enterprises. Wenzhou’sprivate entrepreneurs, however, were quick to takeadvantage of a laissez-faire local state and to seize thevast domestic market opportunities in consumer pro-ducts that opened up during the reform era. Today,for example, Wenzhou produces more cigarette lightersand spectacles than anywhere on earth (ANDERLINI,2011). Combining petty commodity production andlarge markets, these clusters resemble Marshallian indus-trial districts in some respects, albeit with the distinctionof integrating specialized production systems with localmarketplaces (WEI et al., 2007).

Many of these markets have since internationalized,partly enabled by extra-local conditions: the active out-migration of Wenzhou people during the reform periodcontributed to the formation of commercial networksacross the country and overseas.5 Network ties of theWenzhounese are strong partly due to the uniquelocal dialect, which is incomprehensible even topeople from neighbouring prefectures. Strong kinshipand community ties further facilitated private petty-commodity production in Wenzhou, enabling anetwork of ‘underground’ financial institutions, suchas large-scale rotating credit associations, unregulatedmoneylenders and private banks disguised as other


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entities, although investment in fixed assets in China’srural enterprises came mainly from bank loans andinternal accumulation (TSAI, 2002). In Wenzhou,network ties are further assisted by voluntary and auton-omous grassroots business associations, which areplaying active roles in both the economic and politicalarenas, in contrast to Sunan, where the heavy presenceof government and public enterprises reduced thescope (and need) for such bottom-up mobilization(ZHANG, 2008, pp. 173, 195).

The Wenzhou model is classically characterized by arelatively flat class structure, due to the predominance ofsmall businesses and self-employed people. Roughlyone-fifth of the local population comprises businessfamilies with access to productive assets (ZHANG,2008, p. 117). The majority of factory and serviceworkers in Wenzhou, however, are migrants. Wenz-hou’s local governments have been notorious for theirpoor infrastructure and service provision, althoughwith rapid economic growth, they have assumed moreactive roles. Wenzhou’s characteristic form of pettycapitalism has conventionally been a laggard in trainingand technological development, and R&D is usuallyexternally derived, reflecting the absence of upscale uni-versities and research institutes (SMART and SMART,2005). The exclusivity of the region’s inter-firm net-works, coupled with increasingly tight state–firmrelations, has also reduced the attractiveness ofWenzhou as a foreign direct investment target (WEI

et al., 2007). Rigidifying webs of interpersonal relations,centred on kinship and place, have in turn locked outexternal collaborators, leading to the calcification ofstate–business networks, rent seeking and localprotectionism. Once something of a trend-setter, theWenzhou model has recently faltered into low-roaddevelopment path based on the exploitation of familylabour and low-technology manufacturing; large-scalerelocation and branch-plant growth across inlandregions have become commonplace (ANDERLINI,2011; WEI et al., 2007). These relocation trends haveexacerbated capital outflows, making it more difficultfor Wenzhou to attract skilled workers or to improvelocal R&D capacities. Worse still, shrinking profitmargins in local manufacturing and the proliferation of‘underground banking’ have together driven investmentinto real-estate speculation. Slowing global demand forcheap Chinese exports, rising production costs, the tigh-tening of monetary policy and more recently a stagnat-ing real-estate market have combined to crush some ofthe country’s most celebrated entrepreneurs. In onetragic case, the owner of a Wenzhou shoe factory, indebt to the tune of over US$63 million, committedsuicide, while more than 90 other bosses have fled,according to state media (ANDERLINI, 2011). This hastriggered widespread anxiety about the future of theWenzhou model in particular, and more generally thelow-road development model which the region hascome to symbolize.

Zhongguancun: Silicon Valley East?

As the Wenzhou model has faded, it has been rudelyeclipsed by Zhongguancun (ZGC) – China’s ‘SiliconValley’, located in the northern suburbs of Beijing(ZHOU, 2008). As the nation’s capital and its primaryhigher-education hub, Beijing has unparalleled advan-tages in human resources and guanxi networks. Theseknowledge-economy capabilities were instrumental inigniting China’s first wave of indigenous high-technol-ogy companies in the country’s inaugural technologyzone – ZGC Science Park, established in the early1980s. ZGC would soon become China’s leading incu-bator of nongovernmental high-technology companies.In a manner reminiscent of the Taiwanese model ofdevelopment, the ZGC economy has matured into amajor node in ‘brain circulation’ circuits, especiallysince the mid-2000s, in part because the ZGC-basedTsinghua and Peking universities have become the toptwo feeders of doctoral programmes in the UnitedStates (ZHOU, 2008; ZHOU and HSU, 2011). Returneeentrepreneurs have built robust and highly profitabletechnological and venture capital links betweenBeijing and other innovative regions such as SiliconValley, Taipei and Singapore (SAXENIAN, 2006).While the seed money for first-generation ZGC entre-preneurs largely came from their mother institutions andlocal communities, in the last decade Beijing hasemerged as China’s venture-capital capital, with anabundant presence of both domestic and foreign funds(ZHANG, 2011).

As a result, Beijing has consistently been the mosttechnologically advanced region in China, with substan-tially higher rates of labour productivity, R&D invest-ment and new product development than otherregions (ZHOU et al., 2011). The still-expanding ZGCScience Park is now the undisputed heartland ofChina’s ICT industry; it is home to some 20000high-technology companies, with particular depthin software, computer and internet services (THE

ECONOMIST, 2012a). Many of the leading firms inthese sectors are now publicly listed at NASDAQ oron the stock exchanges in Hong Kong. Rather likeSilicon Valley itself, the focus here is on high-end,value-adding services, like design, R&D, marketingand coordination. ZGC is not a manufacturing centre,being constrained by water and land shortages, and thecountry’s strictest internal migration controls (ZHOU

et al., 2011). The labour supply in ZGC in particular(and Beijing in general) is dominated by graduatesfrom local universities and elite overseas returnees, incontrast to the reliance on rural migrant workerstypical of many other high-growth regions. For thisreason, ZGC enjoys the most benign capital–labourrelations of all Chinese regions.

ZGC’s ICT industry is domestically oriented, reflect-ing its service orientation, even though Beijing hosts thelargest number of headquarters of foreign enterprises


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(ZHOU, 2008). ZGC companies, however, are deeplynetworked into both local and international circuits oftechnological expertise. Cooperation with foreign com-panies enables ZGC companies to access new ideas andto enter markets with new products, whereascooperation with universities is used mainly to designnew products (LIEFNER et al., 2006; ZHOU andTONG, 2003). Although strategic alliances, subcontract-ing relationships and other forms of cooperation do existin ZGC, interfirm cooperation is generally weak.However, foreign-owned firms are more often predis-posed towards collaborative arrangements like partner-ships and information sharing. Home-grown Chinesefirms tend to be sceptical of collaboration, favouringin-house development of technology or multinationallicensing arrangements, reflecting low levels of trustand weak institutional accountability (ZHOU, 2008;ZHOU et al., 2011). Relatedly, although Beijing’swhite-collar workers enjoy the best training opportu-nities in the country, publicly funded training systemsare generally weak, while on-the-job training in theprivate sector is hampered by rapid ‘job hopping’ andshort employment tenures (LI et al., 2011a). Highlevels of employee turnover and excessive poachingalso deter in-house training, so China’s Silicon Valleyhas some way to go before it can emulate the virtuouscircuits of knowledge circulation pioneered by theoriginal.

Chongqing: capital of Maonomics, interrupted

Other than ZGC, if there is another regional model thatin recent years has staked a credible claim to the mantleof the ‘next China’, that is Chongqing (THE ECONOM-

IST, 2010b). Remote and isolated, Chongqing had formany years languished on the margins of the nationaleconomy. With a population of 32 million – roughlyequivalent to the size of Canada – Chongqing remainsa predominantly rural region, with 70% of its residentsliving in poverty-stricken conditions in villages andsmall towns. In common with many other inlandregions and industrial centres, the region experienceda ‘state-dominated model’ of development during theMao era (TSAI, 2007, p. 161). As the country’swartime capital, between 1938 and 1945, Chongqing’smanufacturing capacity was built around the defenceindustry, augmented by Third Front programmesduring the 1960s (NAUGHTON, 1988). Yet this didlittle to improve living standards, and this remotecapital of China’s military–industrial complex was tofall even more out of step with the development priori-ties of the post-1978 reform era, which favoured exportsectors along the coast. Its limited political and financialresources were absorbed by the burdens of maintaining,and later reforming, an inherited cluster of giant old-economy SOEs, Chongqing had little scope topromote the development of the non-state, market-oriented sector (HONG, 2004). As its economy

stagnated, the region duly became a major source ofmigrant labour-power, destined for coastal regions likeGuangdong, from the early 1980s.

This long-run pattern of structural decline, however,was disrupted in 1997 when Chongqing’s municipaladministration (formerly part of Sichuan province) wasdesignated as the fourth of the PRC’s new generationof directly controlled municipalities. This positionedthe region at the apex of central government efforts todevelop the west (HONG, 2004). Beijing’s decision toassume direct control of the municipality of Chongqingitself reflected a sea change in national development pri-orities, as the region was repositioned as a role model forthe programme of redirecting industrialization effortsfrom the coast to targeted inland areas, challengingwhat have become deeply entrenched geographicalinequalities in income levels and development pro-spects. In this respect, the Chongqing model representeda political imperative for the CCP, just as much as itstood for a particular strategy of regional economicdevelopment. Confirmation of the political significanceof the Chongqing experiment came in 2007, when BoXilai, a Politburo member and son of a legendary revo-lutionary leader, was appointed as the region’s Commu-nist Party Secretary.

These circumstances meant that the Chongqing‘model’ had for some time been calling out for – andarguably deserving – attention. But attention of aquite different kind was generated in March 2012,when Bo’s spectacular fall, amid charges of corruptionand alleged complicity in the cover-up of a murdercase involving his wife, caused an international sen-sation. These events not only stigmatized the ‘Chongq-ing model’, but also triggered an international discussionabout its possible demise (THE ECONOMIST, 2012b).Bo Xilai had certainly attempted to personify, while atthe same time taken credit for, the region’s developmentmodel, which he would link to flamboyant acts of pol-itical stagecraft. Amongst his most (in)famous campaignswere the so-called ‘chang hong da hei’ (singing red songsand busting mafia gangs). In the service, ostensibly, of‘restoring red morals’, the red-song campaign arguablyhad more to do with fortifying Bo’s own political stand-ing while diverting attention from untended social andpolitical problems (CUI, 2011; THE ECONOMIST,2012c). Although the loudly publicized crackdown onmafia gangs and organized crime resonated with largeparts of the Chinese public, there are credible allegationsthat this entailed the use of brutal methods of suppres-sion, extending to accusations of torture and the arbi-trary seizure of assets (JI, 2012). Some argued that Bo’sstated goal of ‘helping the poor and guiding the rich’was translated, in practice, into ‘helping the poor byextorting the rich’ (cf. HU, 2011).

The Chongqing model, however, cannot be reducedto ‘chang hong da hei’ or indeed to Bo’s audacious politicalprogramme. The seeds of the model were sown by Bo’spredecessor, Wang Yang, who went on to become


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Guangdong’s party chief. Arguably, the true initiator ofthe Chongqing model was the municipality’s mayor,Huang Qifan, a long-time strategist who served underboth Wang Yang and Bo Xilai, who to this dayretains a significant policy-making role. With extensiveprior experience with development initiatives in Shang-hai Pudong, Huang was appointed as Chongqing’s vice-mayor in 2001. The Pudong model pioneered a ‘land–infrastructure–leverage paradigm’, which was rapidlyemulated by an enormous number of local governmentsacross the country, effectively as a party-state version ofthe urban growth machine (TSUI, 2011). This approach,predicated on immense state power over land, exploitswindfall land revenues, supplemented by loans fromstate-controlled banks, to finance massive infrastructureinvestment and industrial expansion. It was Huang whofirst brought the Pudong model of ‘land financing’ toChongqing, with an especially heavy reliance onSOEs and property developers in the initiation ofpublic infrastructure projects (HUANG, 2011).

Similarly, the Chongqing government can be seen tohave behaved in much the same way as other local gov-ernments around the country in promoting and com-peting for inward investment, though its efforts herewere measurably bolstered by Bo’s deep political con-nections and resources (HUANG, 2011). Vast areas ofundeveloped land, abundant supplies of locally availablecheap labour, together with a generous package offinancial, infrastructural and institutional inducements,made Chongqing an almost irresistible location forfirms seeking to cut costs by distancing themselvesfrom coastal hotspots. Brand-name enterprises likeHewlett-Packard and Cisco, along with the outsourcingservice giant Foxconn, have relocated major operationsto Chongqing. Riding this tide, Chongqing wasselected to host no fewer than four national-level devel-opment zones, along with some 36 municipal-levelindustrial parks, in the process securing its position as aleading-edge manufacturing economy, focused on theinformation technology sector and on a massive logisticsand civil-aviation complex (HUANG, 2011). For a time,this was reciprocally sustained by favoured positions innational policy regimes. For example, in early 2011,the State Council chose Chongqing as the site for oneof three National Industrial Relocation Zones(ZHANG, 2014). In these and other ways, the regionhas witnessed vigorous development across both thepublic and the private sectors. What was distinctive,however, about Chongqing’s version of the ‘land–infrastructure–leverage paradigm’ was its explicit linkto Bo’s bombastic ‘revival of socialism’ (CUI, 2011;HUANG, 2011). This placed the region, for a whileanyway, at the centre of experiments for more inclusiveapproaches to development. The Chongqing govern-ment was the first to take significant steps to alleviatethe chronic conditions confronting migrating peasantworkers. The city also piloted bold reforms of theland-tenure system, opening up channels for rural

migrants to access to urban education, healthcare andpensions. Three million farmers were promisedChongqing urban-hukou by 2012, rising to 10 millionby 2020 (for those willing to give up their rural resi-dency rights). Chongqing has also set an ambitiousgoal of housing 30–40% of the population in publicapartments, initiating a massive construction programmein 2009 with the intention of accommodating morethan 2 million low-income residents. This promptedBeijing to make the case for similar projects nationwide(THE ECONOMIST, 2012c). The designation, therefore,of Chongqing as China’s ‘red capital’, or the capital ofMaonomics (NAPOLEONI, 2011), is not without sub-stance. And for a while its precocious model of ‘liberalsocialism’ was being interpreted as an alternative –and, for some, a putative successor – to the coastalregime of ‘neoliberal capitalism’, epitomized by Guang-dong, and its alleged betrayal of socialism (CUI, 2011).

Bo Xilai’s popularity, in this sense, was not accom-plished by acts of political sleight of hand alone. Thecombination of progressive social policies and rapideconomic growth lay at the heart of the Chongqingmodel. In the five years of the Bo regime, regionalGDP growth surged to an average 15.8% per year, wellin excess of the national average of 10.5% per year(ORLINK, 2012). Of course, there was always a questionof whether this was sustainable. In fact, Chongqing’spublic debt, much of which is backed by inflated landvalues, reached 1 trillion yuan, or 100% of its GDP, atthe end of 2011 (ORLINK and WEI, 2012). It shouldbe noted, however, that massive debt and lavish spendingare by no means confined to Chongqing. Indeed, Bo’seconomic strategy was largely endorsed by the centralleadership, and his ambitious attempts to narrow theyawning inequality gap in many ways anticipated whathave become priorities for the new leadership inBeijing (THE ECONOMIST, 2012b). Ultimately, it wasBo’s unseemly and rather open challenge to the estab-lished order, and his correspondingly transparentattempts to harness popular support for the benefit ofhis own political advancement, that secured hisundoing. In the fallout, the advance of the Chongqingmodel has certainly been interrupted, and the collateraldamage is considerable. But the model itself seems des-tined to survive, albeit in a less explicitly politicized form.

Chongqing may well prove to be consequential inother, yet more fundamental ways. Bo Xilai’s ousterlaid bare the fierce power struggles that have beenraging through upper echelons of the party, exposingthe most damaging split in the CCP leadership sincethe Tiananmen Square events of 1989. Moreover, thedownsides of the Chongqing model include theabsence of checks and balances against the enormouspower of local party leaders and a continuing lack ofmeaningful judiciary independence (JI, 2012). Conse-quently, the new leadership in Beijing is confrontedby daunting challenges, not least concerning the main-tenance of political legitimacy in the context of


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slowing rates of economic growth. In this respect,Chongqing also highlights the implicit contradictionsin the current mode of development – especiallybetween the goals of continued growth and spirallingrates of inequality, and the unstable tradeoffs that havebeen struck between prosperity and democracy –thereby feeding into deep-seated anxieties concerningChina’s political and economic future.

CONCLUSION: THE COMPLEX UNIVERSEOF CHINESE CAPITALISM

‘China’, as NAPOLEONI (2011, p. 323) has observed, isitself ‘a complex universe’. By way of an excursionthrough some of the regional subspecies of Chinesecapitalism, summarized at Table 3, this paper has endea-voured to illustrate here some aspects of the multi-polarand multi-scalar complexity of this still-perplexing for-mation. The preceding regional economic vignettes donot, of course, come close to cataloguing the complexityof the Chinese mode of capitalism, though it could bemaintained that they do call attention to some of itsmore pertinent dimensions of ‘internal’ differentiationand complexity. While nominally ‘internal’ or ‘sub-national’, what is notable about all these regionalmodels is that neither their developmental essence northeir institutional integrity is a straightforwardlyendogenous achievement. In as far as they exhibit anymeasure of cross-institutional regional ‘coherence’, thisis achieved at the nexus of central–local regulatoryrelations, on the one hand, and transnational economicconnections, on the other. Distinctive conjunctural‘locations’ have clearly played catalytic roles in the devel-opment of many of these models, be this in the shape ofthe first-mover (de)regulatory advantages enjoyed byGuangdong, as the site where Hong Kong capitalengaged with the floating workforce of interregionalmigrants, or in the radically different pattern exhibitedin Chongqing, where more recent rounds of foreigninvestment, oriented to emerging domestic markets,were married with large-scale intraregional urbanizationunder the banner of a unique form of retro-socialist lib-eralism.The fact that readings of the supposed ‘essence’ofChinese capitalism, not tomention contending visions ofits future, are often articulated through one or other ofthese regional models (e.g., ‘neoliberal’ Guangdongversus ‘socialist’ Chongqing) speaks to both thedistinctiveness of these formations and their politicalsalience.

Substantively, this paper has focused on ‘sub-national’ variation within the Chinese model of capital-ism. Exploring causally significant differentiation at theregional or sub-national scale is, of course, but one ofthe methodological manoeuvres necessary for a trulymulti-scalar analysis of capitalist variety. It need hardlybe emphasized that ‘finding’ such regional differencesis merely a prelude to seeking explanations for their (re)

production in the context of ongoing scalar transform-ations of capitalism, though this is a task that mustremain for future work. Suffice it to say that regionalvariability is a feature of all ‘national’ capitalisms, andthat a case can be made that these geographies are con-stitutive of all such models (in as far as every nationalmodel internalizes particular configurations of unevengeographical development), while also highlighting het-erogeneous forms of regional articulation with globaliz-ing networks, flows and circuits. The sense, then, is thatthere is little to be accomplished by merely ‘downscal-ing’ the VoC apparatus for deployment at the regionallevel, even though this does have a role as a heuristicor sensitizing device, bringing into focus some of thedistinctive features of these sub-national models.Rarely, if ever, is the logic of these models endogenous,of course, so their relational positioning within businessnetworks, political circuits, migration flows and soforth assumes considerable explanatory significance.

By implication, the case for taking regional formationsof capitalism seriously should not be dismissed as a decon-structionist’s charter. Rather, the challenge must be totheorize across scales, not to privilege, a priori, one scaleof analysis over another. In order to achieve traction inexplanatory terms, such a multi-scalar approach must inits own way be causally selective – it cannot be a‘theory of everything’ or an unprincipled collection of‘models from everywhere’. Regional ‘models’, towarrant the label, must be shown to display a measureof distinctive institutional-cum-developmental integrity,and they must be more than chips from the nationalblock. It must remain a fact of life that multi-scalar the-ories of variegated capitalist transformation will neverbe as parsimonious and vivid as those stylized formu-lations and ideal types derived from mainstream VoCscholarship. However, they are arguably more suited tothe demanding task of accounting for the kinds ofcomplex transformations that for some time now havebeen evident in the world(s) of unevenly globalizingcapitalism.Here, internationalization and regionalizationare proceeding not in zero-sum opposition but intandem, while at the same time nationally scaled func-tions have undergone far-reaching, qualitative forms ofreorganization and reconfiguration.

While perhaps it can be taken as given that the one-world convergence models of orthodox globalizationtheory can, by now, be safely eschewed, it would beunfortunate if legitimate concerns around the ideal–typical parsimony of the mainstream VoC frameworkshould give licence to an indiscriminate hunt for a(nother) capitalism under every bush. On the contrary,sources of spatial variegation in contemporary capitalismmust be rigorously theorized, in dialogue with anexpanding array of concrete cases, in ways that are atten-tive to the structural, connective, systemic and recurringfeatures of capitalism itself (STREECK, 2011; JESSOP,2012; PECK, 2013). The VoC approach has beenremarkably effective in stimulating, first, a research


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Table 3. Regional subspecies of ‘Chinese’ capitalism?

Guangdong: dormitory regime intransition

Sunan: transnational technologycomplex

Wenzhou: Marshalliandevelopment in crisis ZGC: Silicon Valley East?

Chongqing: capital of Maonomics,interrupted

Industrial relations Dominance of Hong Kong-based FIEs

Dormitory labour regime, relianton rural migration

Strong outward orientation

From collective TVEs to FIEsRelatively lower reliance on rural

migrant workersFrom inward orientation to

hybrid, regional-transnationalmodel

From private TVEs to largerprivate enterprises

Substantial but relatively limitedrural migrant workers

Limited FDIInward orientation

Dominance of local-growninformation technology firms

Locally educated, white-collarworkforce

Relatively benign labour–capitalrelations

Inward orientation

Historical dominance of SOEs;emerging FIEs

Booming rural migration to FIEsTraditionally inward orientation rapidly

externalizing

Education andtraining

Intra-regional disparity in accessto universities and researchinstitutions

Paucity of training for low-skilledmigrant workers

Developing local universities andresearch institutions

Relatively substantial training ofskilled workers

Absence of local universities andresearch institutions

Minimal in-house training

Top-ranked universities andresearch institutions

Relatively substantial training ofskilled workers

Brain circulation

Little presence of local universities andresearch institutions

Limited labour training

Interfirm relations Deeply embedded in GPNs,especially via Hong Kong

Growing pressure to upgrade oflocal firms; limited so far

Deeply embedded in GPNs,especially via Taiwan andSingapore

Limited knowledge andtechnology spillovers to localfirms

Strong family- and guanxi-basednetworks among local firms

Limited inter-firm collaborationsDeep linkages between local firms

and transnational corporations(TNCs)

Relatively isolated SOEsEmerging embeddedness in GPNs

Corporatefinancing andgovernance

Dominance of Hong Konginvestors

Highly active financial sector andgrowing stock market inShenzhen

From local state-coordinatedfinancing to foreign corporatesourcing

Endogenous sources mutualfinancial assistance and active‘underground’

Informal financing; impededaccess to credit sources

Emerging centre of Chinese theventure capital industry

Large number of domestic andoverseas initial public offerings(IPOs)

Dual structure of bank-based financingfor SOEs and exogenous financing ofFIEs

Note: FDI, foreign direct investment; FIEs, foreign-invested enterprises; GPNs, global production networks; SOEs, state-owned enterprises; TVEs, township and village enterprises.Source: Authors; informed by TSAI (2007).

Variegated

Capitalism

,Chinese

Style:RegionalM

odels,Multi-scalar

Constructions

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programme and, more recently, a productive debatearound the problematic of institutionally legible vari-ation across a selective group of national economies,yet both its sampling strategy and its ontological visionhave been restrictive in spatial, scalar, and substantiveterms. The VoC tradition remains vulnerable to the cri-tique that it has been methodologically nationalist, resi-dually Eurocentric and institutionally functionalist. Thefact that it is no longer possible to dismiss Chinese capit-alism as an offshore curiosity represents a serious chal-lenge to VoC orthodoxy, which for some time hasbeen experiencing its own kind of ‘reformist’ pressures.Even if the house of comparative ‘national capitalisms’has many rooms, the metaphorical elephant that is theChinese economy does not easily fit into any of them.And while recent attempts to place Chinese capitalismin dialogue with VoC rubrics have been provocativeand sometimes productive (MCNALLY, 2008; WITT,2010; FLIGSTEIN and ZHANG, 2011; cf. PECK andZHANG, 2013), this effort must not be reduced to oneof ‘accommodating’ the Chinese case within an unmo-dified framework. After all, this is a case that plainlyoverflows the VoC framework in both substantive andscalar terms: it can be seen as a nationally orchestratedmodel, constructed through an ongoing and selectiveprocess of sub-national regulatory experimentation bya ‘reforming’ socialist–developmental state in a mannerdesigned to exploit the imperatives and opportunitiesof neoliberalizing and globalizing capitalism. As such,it redefines received notions of ‘institutional coherence’at the national scale, to say the least. No doubt there are‘Chinese ways’ of capitalism, but these must be under-stood to be plural rather than singular – and theyoften find expression, as it has been argued here, in dis-tinct regional formations, each of which is embeddedwithin different configurations of extra-local relations.The fate of ‘Chinese’ capitalism may even be decidedby an Oriental war of capitalism against capitalism (cf.

ALBERT, 1993), perhaps between Guangdong- andChongqing-style patterns of development, even as itwill surely remain impossible for any regional modelto secure a monopoly position.

Acknowledgements – The authors thank AlexanderEbner and the anonymous reviewers for comments and sug-gestions on an earlier version of this paper. They also thankLili Cai for her cartographic support. Jamie Peck gratefullyacknowledges the support of the Lim Chong Yah Professor-ship at the National University of Singapore.

Funding – Jamie Peck gratefully acknowledges the researchgrant programme of the Social Sciences and HumanitiesResearch Council of Canada.

NOTES

1. The ‘Third Front’ refers to a large-scale programme,launched in 1964, to develop a series of large-scale indus-trial sites in China’s remote yet strategically secure hinter-land, largely in response to Cold War insecurities (cf.NAUGHTON, 1988).

2. Since 1997 the role played by the state has steadilyincreased, including the introduction of a compulsorypension scheme and a statutory minimum wage (THE

ECONOMIST, 2010a).3. Taiwan sent more doctoral candidates in engineering to

the United States during the 1980s than any othercountry (SAXENIAN, 2006, p. 134).

4. A 2002 survey revealed that for every employee engagedin Hong Kong, 24 were employed in mainland China(ENRIGHT et al., 2003).

5. It is estimated that about 1.8 million Wenzhou people,equivalent to one-fifth of its total population, havemigrated across the country, establishing some 30000enterprises in other parts of the country, along with count-less ‘Wenzhou villages’, ‘Wenzhou streets’ and ‘Wenzhoutowns’ (ZHANG, 2008, p. 42).

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capitalism

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university of toronto

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chinese model

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regional models

zhang jamie peck

university of british