Dual Transitions in Reformed China: Property Rights and the Case of Zhongguancun





Published date: 

June, 2013


Chih-shian Liou


The resilience of the communist regime in China has been a puzzle in the study of dual transitions. By examining the property rights regime in China’s high-tech sector, this article argues that the reason for China’s extraordinary economic growth without political liberalization lies in the process of the reassignment of property rights. With a view to helping state agencies avoid financial difficulty, high-tech spin-off enterprises and their associated hybrid property rights regimes created space for the old authority structure to remain in place. In particular, these spin-off enterprises never cut their ties with the state. While such a strategy has proved effective in discouraging the state’s predatory behavior in the course of market transition, it is the cause of the enduring influence of the Chinese state on these enterprises. Given the nature of state-market interactions in technology-related industries, the study of high-tech spin-offs in Zhongguancun serves as a critical case to understand the change in power structure associated with the reassignment of property rights. Most importantly, the findings of this article carry implications for understanding the politics of dual transitions in China.