The role of spontaneity and state initiative in China’s shareholding system reform

This article examines the relative importance of spontaneity and state initiative in economic transformation, using China’s shareholding system reform as case study. Two contrasting images of the Chinese state are identified: the strong state perspective sees the state as providing the basic impetus for change, whereas the weak state perspective emphasizes the role of spontaneous attempt. Based on fieldwork conducted in Foshan, where China’s first industrial shareholding enterprise emerged, we argue that although the Chinese state has been dysfunctional in some aspects, particularly at the local level, it has been strong enough to play a developmental role. The basic momentum of change has come mainly from the central government. Local authorities have helped implement the central policy, though with some distortions. Early spontaneous attempts have not played any significant role in defining the final reform program. It is the strong state perspective that holds.