Local state corporatism and private business

This article examines the role of the local state in promoting the development of private business in China, and the political institutions behind local state-led development. It argues that political incentives are more important than fiscal incentives to understand why local leaders have assisted the growth of rural industry. It also shows that local cadres not only promote collective enterprises, but also the private sector whose profits they are able to control to a much lesser extent, which reinforces the finding that political incentives guide cadre behaviour. The study applies the notion of local state corporatism but also asks what relevance the model, so dominant in the 1990s, holds for rural China studies in the coming years.