China’s Reforms and International Political Economy International forces shape a state’s domestic development, particularly under globalization. Yet most analysts have ignored the influence of China’s position in the global economy on its economic and political development. Given the deep economic ties between China and the world today, and the state’s increasingly limited capacity to control transnational flows, such a position is difficult to sustain. No single model can explain the relative role of internal and external forces in China’s domestic reforms and international economic policy. Instead this book presents a variety of academic opinions from both main- landers and Western-trained scholars on this issue. These China specialists debate a number of key areas including China’s entry to the WTO and whether state policy or international forces dictate China’s position within the global economy; the role of the local state versus the central state in determining China’s production networks within global manufacturing processes; the question of whether global forces and international organi- zations, such as the WTO, are leading China to adopt conciliatory policies towards both the US and ASEAN, or whether China’s elites still determine the final pattern of trade liberalization and domestic reform? A broad range of case studies supports these areas of investigation, including research on the internationalization of the Chinese state, the opening of the pharma- ceutical sector, the Sino-South Korean ‘‘Garlic War’’ and returnees to China who seek greater economic and social remuneration. Providing vital insights into China’s likely development and international influence in the next decade, China’s Reforms and International Political Economy will appeal to students and scholars of international political economy, China studies and international relations. David Zweig is Chair Professor of Social Science at The Hong Kong Uni- versity of Science and Technology and Director of its Center on China’s Transnational Relations. Chen Zhimin is Chair Professor at the Department of International Politics, Fudan University, Shanghai. Routledge Studies on China in Transition Series Editor: David S. G. Goodman 1 The Democratisation of China 9 Regional Development in China Baogang He States, globalization and inequality 2 Beyond Beijing Yehua Dennis Wei Dali Yang 10 Grassroots Charisma 3 China’s Enterprise Reform Four local leaders in China Changing state/society relations Stephan Feuchtwang and after Mao Wang Mingming You Ji 11 The Chinese Legal System 4 Industrial Change in China Globalization and local legal Economic restructuring and culture conflicting interests Pitman B. Potter Kate Hannan 12 Transforming Rural China 5 The Entrepreneurial State in How local institutions shape China property rights in China Real estate and commerce Chi-Jou Jay Chen departments in reform era Tianjin Jane Duckett 13 Negotiating Ethnicity in China Citizenship as a response to the 6 Tourism and Modernity in China state Tim Oakes Chih-yu Shih 7 Cities in Post Mao China 14 Manager Empowerment in China Recipes for economic Political implications of rural development in the reform era industrialisation in the reform era Jae Ho Chung Ray Yep 8 China’s Spatial Economic 15 Cultural Nationalism in Development Contemporary China Regional transformation in the The search for national identity Lower Yangzi Delta under reform Andrew M. Marton Yingjie Guo 16 Elite Dualism and Leadership 23 State and Laid-Off Workers in Selection in China Reform China Xiaowei Zang The silence and collective action of the retrenched 17 Chinese Intellectuals Between Yongshun Cai State and Market Edward Gu and Merle Goldman 24 Translocal China Linkages, identities and the 18 China, Sex and Prostitution reimagining of space Elaine Jeffreys Tim Oakes and Louisa Schein 19 The Development of China’s 25 International Aid and China’s Stockmarket, 1984–2002 Environment Equity politics and market Taming the Yellow Dragon institutions Katherine Morton Stephen Green 26 Sex and Sexuality in China 20 China’s Rational Entrepreneurs Edited by Elaine Jeffreys The development of the new private business sector 27 China’s Reforms and International Barbara Krug Political Economy Edited by David Zweig and 21 China’s Scientific Elite Chen Zhimin Cong Cao 28 Ethnicity and Urban Life in China 22 Locating China A comparative study of Hui Jing Wang Muslims and Han Chinese Xiaowei Zang China’s Reforms and International Political Economy Edited by David Zweig and Chen Zhimin First published 2007 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 270 Madison Ave, New York, NY 10016 Routledge is an imprint of the Taylor & Francis Group, an informa business # 2007 David Zweig and Chen Zhimin for selection and editorial matter, the contributors, their contributions This edition published in the Taylor & Francis e-Library, 2007. “To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data China’s reforms and international political economy / edited by David Zweig and Chen Zhimin. p. cm. – (Routledge studies on China in transition) Includes bibliographical references and index. 1. China–Economic policy–1976–2000. 2. China–Politics and government–1976-2002. 3. Globalization–Economic aspects–China. 4. Globalization–Political aspects–China. I. Zweig, David. II. Chen, Zhimin, 1966– HC427.92.C46548 2007 337.51–dc 222006024035 ISBN 0–203–96466–7 Master e-book ISBN ISBN 0–4 15–39613–1 (Print Edition) Contents List of illustrations ix List of contributors x Preface by Joseph Caron xv Acknowledgements xix Abbreviations xxi Introduction: international political economy and explanations of China’s globalization 1 DAVID ZWEIG AND CHEN ZHIMIN PART I External structures: power, norms, multilateralism and production 19 1 Beyond the disciplinary heartlands: studying China’s international political economy 21 SHAUN A. BRESLIN 2 Soft balancing and reciprocal engagement: international structures and China’s foreign policy choices 42 CHEN ZHIMIN 3 China in the world and the world in China: the domestic impact of international institutions on China’s politics, 1978–2000 62 SU CHANGHE 4 China, Southeast Asia and East Asian economic regionalism 77 RICHARD STUBBS viii Contents PART II China and the World Trade Organization 95 5 How reform drove China’s integration into the international community 97 FAN YONGMING 6 Trade policy and regulatory politics: China’s WTO implementation in comparative perspective 112 MARGARET M. PEARSON 7 Hinges and latches on the open door: the normative parameters of China’s WTO accession 131 JEREMY T. PALTIEL Part III Outside in or inside out? Case studies 153 8 Between ‘‘outside-in’’ and ‘‘inside-out’’: the internationalization of the Chinese state 155 GREGORY T. CHIN 9 Dancing with wolves: opening the pharmaceutical sector in China 171 KAREN MINDEN AND JEFFREY L. DONG 10 How China responds to trade sanctions: decoding the Sino-South Korean ‘‘Garlic War’’ 186 JAE HO CHUNG 11 Globalization and transnational human capital: overseas and returnee scholars to China 204 DAVID ZWEIG, CHEN CHANGGUI AND STANLEY ROSEN Index 223 List of Illustrations Tables 1.1 Explanations of China’s global economic integration 13 2.1 Key indicators of the major states and the European Union 50 2.2 Military power of the major states: 1985 and 2000 52 9.1 Pre-WTO ‘‘SWOT’’ analysis of key market players 180 9.2 Post-WTO ‘‘SWOT’’ analysis of key market players 182 10.1 South Korea’s garlic imports from China, 1996–1999 189 10.2 Garlic price changes in South Korea, 1996–1999 189 10.3 Domestic garlic production in South Korea, 1996–1999 190 10.4 Value of trade in 1999 196 11.1 Comparing returnees and domestically trained researchers in Development Zones 214 11.2 Level of technology imports, returnees versus domestically trained researchers 215 11.3 Target market by quality of technology import 216 11.4 Target market for returnees and domestically trained researchers in Development Zones, 2001 217 11.5 Rewards to technology importers and non-importers in Development Zones 218 Figures 2.1 Trade as a percentage of China’s GDP: 1952–2003 53 9.1 The business system of the pre-WTO Chinese pharmaceutical market 174 9.2 Drug price components and distribution margins 175 9.3 The business system of the post-WTO Chinese pharmaceutical market 176 Contributors Shaun A. Breslin is Professor of Politics and International Studies at the University of Warwick in the UK, a research fellow of the Asia Research Centre at Murdoch University in Australia, and co-editor of The Pacific Review. He has published books on centre-local relations in China, on comparative politics (joint authored), a political biography of Mao, joint edited two collections on regionalism, and numerous articles and book chapters on the political economy of contemporary China. Chen Changgui is Professor and Vice Director of the Institute of Educa- tional Studies at Zhongshan University, Guangzhou, where he directs research on the economics and management of education. He is also a Professor at the Institute of Educational Studies, Beijing University, and the Research Center on the Development of Higher Education at Xiamen University. In 1991–1993, he was a Visiting Scholar in America and Canada. He has worked on programs funded by the Ford Founda- tion, the Canadian International Development Agency, the Natural Sci- ence Foundation, the Hong Kong Research Grants Council, the Tenth Five-Year Plan of National Development, including the development of Guangdong’s education development.