Hostname: page-component-586b7cd67f-t8hqh Total loading time: 0 Render date: 2024-11-25T00:28:18.892Z Has data issue: false hasContentIssue false
  • English
  • Français

Disembedding Socialist Firms as a Statist Project: Restructuring the Chinese Oil Industry, 1997–2002

Published online by Cambridge University Press:  18 February 2015

Kun-Chin Lin
Get access Rights & Permissions [Opens in a new window]

Abstract

Crucial to the success of China’s transition to the market economy is the central government’s capacity for institutional innovation. Since 1997, Chinese politicians have sought to transform the governance of state-owned industries from decentralized administrator control to centralized corporate shareholder control. This essay examines the ideological, political, and institutional components of the central state’s strategy of “disembeddedness” that aimed to disrupt preexisting social norms and exchange relations of the planned economy. However, this authoritarian approach to organizational change has generated sociopolitical contentions and unintended economic outcomes that point to alternative conceptions of authority and exchange relations at industrial and firm levels. Focusing on the recent restructuring of the oil and petrochemical sectors into national oil corporations, I provide evidence of how certain types of informal social dynamics have shaped and constrained the implementation of asset control strategies and industrial policies favored by the state, with direct implications for the proper functioning of new market institutions.

Type
Articles
Information
Enterprise & Society , Volume 7 , Issue 1 , March 2006 , pp. 59 - 97
Copyright
Copyright © The Author(s) 2006. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Bibliography of Works Cited

Books

Aggarwal, Vinod K. Debt Games: Strategic Interaction in International Debt Rescheduling. New York, 1996.Google Scholar
Aggarwal, Vinod K. Institutional Designs for a Complex World. Ithaca, N.Y., 1998.Google Scholar
Aslund, Anders. How Russia Became a Market Economy. Washington, D.C., 1995.Google Scholar
Bachman, David M. Bureaucracy, Economy, and Leadership in China: The Institutional Origins of the Great Leap Forward. Cambridge, U.K., 1991.Google Scholar
Boyko, Maxim, Andrei Shleifer, and Robert Vishny. Privatizing Russia. Cambridge, Mass., 1995.Google Scholar
Chandler, Alfred D., Jr., and Herman Daems. Managerial Hierarchies. Cambridge, Mass., 1980.Google Scholar
Dickson, Bruce J. Red Capitalists in China: The Party, Private Entrepreneurs, and Prospects for Political Change. Cambridge, U.K., 2003.Google Scholar
DiMaggio, Paul, and Walter Powell, eds. The New Institutionalism in Organizational Analysis. Chicago, 1991.Google Scholar
Duckett, Jane. The Entrepreneurial State in China. London, 1998.Google Scholar
Frazier, Mark W. The Making of the Chinese Industrial Workplace: State, Revolution, and Labor Management. New York, 2002.Google Scholar
Gershenkron, Alexander. Economic Backwardness in Historical Perspective. New York, 1962.Google Scholar
Gerth, H. H., and C. W. Mills, eds. From Max Weber: Essays in Sociology. Oxford, U.K., 1958.Google Scholar
Gore, Lance L. P. The Institutional Foundation of China’s Post-Mao Hyper-Growth. Hong Kong, 1998.Google Scholar
Hannan, Kate. Industrial Change in China: Economic Restructuring and Conflicting Interests. London, 1998.Google Scholar
Huang, Yasheng. Inflation and Investment Controls in China. Cambridge, U.K., 1996.Google Scholar
Huang, Yasheng. Selling China: Foreign Direct Investment during the Reform Era. Cambridge, U.K., 2003.Google Scholar
Janos, Andrew. Politics and Paradigms: Changing Theories of Change in Social Science. Stanford, Calif., 1986.Google Scholar
Jefferson, Gary H., and Inderjit Singh, eds. Enterprise Reform in China: Ownership, Transition, and Performance. New York, 1999.Google Scholar
Jingji, Ribao. Dajubian: ’98 zhongguo shiyoushihua dachongzu zishi [The Great Transformation: A Documentary of the ’98 Restructuring of the Chinese Oil and Petrochemical Industries]. Beijing, 1998.Google Scholar
Kornai, Janos. The Socialist System: The Political Economy of Communism. Oxford, U.K., 1992.Google Scholar
Lardy, Nicholas R. China’s Unfinished Economic Revolution. Washington, D.C., 1998.Google Scholar
Lee, Hong Yung. From Revolutionary Cadres to Party Technocrats in Socialist China. Berkeley, Calif., 1991.Google Scholar
Lee, Tai Hwan. Politics of Energy Policy in Post-Mao China. Seoul, 1995.Google Scholar
Leitzel, Jim. Russian Economic Reform. London, 1995.Google Scholar
Lieberthal, Kenneth G., and David M. Lampton, eds. Bureaucracy, Politics, and Decision Making in Post-Mao China. Berkeley, Calif., 1992.Google Scholar
Lin, Yi-min. Between Politics and Market: Firms, Competition, and Institutional Change in Post-Mao China. Cambridge, U.K., 2001.Google Scholar
Lu, Yuan. Management Decision-Making in Chinese Enterprises. New York, 1996.Google Scholar
MacLeod, Dag. Downsizing the State: Privatization and the Limits of Neoliberal Reform in Mexico. University Park, Pa., 2004.Google Scholar
Manion, Melanie. Retirement of Revolutionaries in China: Public Policies, Social Norms, Private Interests. Princeton, N.J., 1993.Google Scholar
Naughton, Barry. Growing Out of the Plan: Chinese Economic Reform, 1978–1993. Cambridge, U.K., 1995.Google Scholar
Nelson, Lynn D., and Irina Y. Kuzes. Radical Reform in Yeltsin’s Russia. Armonk, N.Y., 1995.Google Scholar
Noble, Gregory W., and John Ravenhill. The Asian Financial Crisis and the Architecture of Global Finance. New York, 2000.Google Scholar
Nolan, Peter. China’s Rise, Russia’s Fall. New York, 1995.Google Scholar
North, Douglass C. Institutions, Institutional Change and Economic Performance. Cambridge, U.K., 1990.Google Scholar
Polanyi, Karl. The Great Transformation. Boston, 1944.Google Scholar
Qiu, Baolin. Zhongguo shiyou tiaozhan WTO [China’s Oil Industry Takes on the WTO]. Beijing, 2000.Google Scholar
Scott, James. The Moral Economy of the Peasant. New Haven, Conn., 1976.Google Scholar
Scott, James. Seeing Like a State. New Haven, Conn., 1998.Google Scholar
Scott, James. Weapons of the Weak: Everyday Forms of Peasant Resistance. New Haven, Conn., 1985.Google Scholar
Shirk, Susan L. The Political Logic of Economic Reform in China. Berkeley, Calif., 1993.Google Scholar
Shue, Vivienne. The Reach of the State: Sketches of the Chinese Body Politic. Stanford, Calif., 1988.Google Scholar
Steinfeld, Edward S. Forging Reform in China: The Fate of State-Owned Industry. Cambridge, U.K., 1998.Google Scholar
Thompson, E. P. Customs in Common. New York, 1991.Google Scholar
Thompson, E. P. The Making of the English Working Class. New York, 1964.Google Scholar
Williamson, Oliver E. Markets and Hierarchies: Analysis and Antitrust Implications. New York, 1975.Google Scholar
Williamson, Oliver E. Organization Theory: From Chester Barnard to the Present and Beyond. New York, 1990.Google Scholar
World, Bank Country Study. China’s Management of Enterprise Assets: The State as Shareholder. Washington, D.C., 1997.Google Scholar
Yergin, Daniel, and Joseph Stanislaw. The Commanding Heights: The Battle between Government and the Marketplace That Is Remaking the Modern World. New York, 1998.Google Scholar
Zhongyang, caijing lingdao xiaozu bangongshi. Zhonggong zhongyang guanyu guoyouqiye gaige he fazhan ruoyu zhongda wenti de jueding, xuexi fudao jiangzuo [Study Guide for the Major Decisions on Problems of SOE Reform and Development, Made by the Central Committee of the CCP]. Beijing, 1999.Google Scholar

Articles and Essays

Baum, Richard, and Alexei Shevchenko. “The ‘State of the State.’” In The Paradox of China’s Post-Mao Reforms, ed. Merle Goldman and Roderick MacFarquhar. Cambridge, Mass., 1999, pp. 333–60.Google Scholar
Bhagwati, Jagdish N. “Directly Unproductive, Profit-Seeking (DUP) Activities.” Journal of Political Economy 90, no. 5 (1982): 988–1002.Google Scholar
Boisot, Max, and John Child. “From Fiefs to Clans and Network Capitalism: Explaining China’s Emerging Economic Order.” Administrative Science Quarterly 41, no. 4 (1996): 600–28.Google Scholar
Bolton, Patrick, and Joseph Farrell. “Decentralization, Duplication, and Delay.” Journal of Political Economy 98, no. 4 (1990): 803–26.Google Scholar
Booth, William James. “On the Idea of Moral Economy.” American Political Science Review 88, no. 3 (1994): 653–67.Google Scholar
Brandt, Loren, and Ziaodong Zhu. “Redistribution in a Decentralized Economy: Growth and Inflation in China under Reform.” Journal of Political Economy 108, no. 2 (2000): 422–39.Google Scholar
Buroway, Michael. “The State and Economic Involution: Russia through a China Lens.” In State-Society Synergy: Government and Social Capital in Development, ed. Peter Evans. Berkeley, Calif., 1997, pp. 150–77.Google Scholar
Chaudhry, Kiren Aziz. “The Myth of the Market and the Common History of Late Developers.” Politics and Society 21, no. 3 (1992): 245–74.Google Scholar
Cheng, Tiejun, and Mark Selden. “The Origins and Social Consequences of China’s Hukou System.” China Quarterly 139 (Sept. 1994): 644–68.Google Scholar
Chung, Jae Ho. “The Political Economy of Industrial Restructuring in China: The Case of Civil Aviation.” China Journal 50 (July 2003): 61–82.Google Scholar
Cui, Zhiyuan. “Whither China? The Discourse on Property Rights in the Chinese Reform Context.” Social Text 55 (Summer 1998): 67–81.Google Scholar
Ding, X. L. “The Illicit Asset Stripping of Chinese State Firms.” China Journal 34 (April 2000): 1–28.Google Scholar
Dittmer, Lowell. “Chinese Factional Politics under Jiang Zemin.” Journal for East Asian Studies 3 (Aug. 2003): 97–128.Google Scholar
Donnithorne, Audrey. “China’s Cellular Economy: Some Economic Trends Since the Cultural Revolution.” China Quarterly 52 (Oct.–Dec. 1972): 605–19.Google Scholar
Fewsmith, Joseph. “Elite Politics.” In The Paradox of China’s Post-Mao Reforms, ed. Merle Goldman and Roderick MacFarquhar. Cambridge, Mass., 1999, pp. 47–75.Google Scholar
Fligstein, Neil. “Market as Politics: A Political-Cultural Approach to Market Institutions.” American Sociological Review 61 (Aug. 1996): 656–73.Google Scholar
Freeland, Robert F. “The Myth of the M-Form? Governance, Consent, and Organizational Change.” American Journal of Sociology 102 (Sept. 1996): 483–526.Google Scholar
Gallagher, Mary, and Junlu Jiang. “China’s National Labor Law: Introduction and Analysis.” Chinese Law and Government 35 (Nov.–Dec. 2002).Google Scholar
Goldscheid, Rudolf. “A Sociological Approach to Problems of Public Finance.” In Classics in the Theory of Public Finance, ed. Richard Musgrave and Alan T. Peacock. London, 1964, pp. 202–13.Google Scholar
Granovetter, Mark. “Economic Action and Social Structure: The Problem of Embeddedness.” American Journal of Sociology 91 (Nov. 1985): 481–510.Google Scholar
Greenwood, Royston, and C. R. Hinings. “Understanding Radical Organizational Change: Bringing Together the Old and the New Institutionalism.” Academy of Management Review 21, no. 4 (1996): 1022–54.Google Scholar
Haggard, Stephan. “Institutions and Growth in East Asia.” In Studies in Comparative International Development 38 (Winter 2004): 53–81.Google Scholar
Hannan, Michael J., and John Freeman. “Structural Inertia and Organizational Change.” American Sociological Review 49 (June 1984): 149–64.Google Scholar
Holz, Carsten. “Economic Reforms and State Sector Bankruptcy in China.” China Quarterly 166 (June 2001): 342–67.Google Scholar
Hurst, William J. “Understanding Contentious Collective Action by Chinese Laid-Off Workers: The Importance of Regional Economy.” Studies in Comparative International Development 39 (Summer 2004): 94–120.Google Scholar
Kahler, Miles. “Orthodoxy and Its Alternatives: Explaining Approaches to Stabilization and Adjustment.” In Economic Crisis and Policy Choice: The Politics of Adjustment in the Third World, ed. Joan Nelson. Princeton, N.J., 1990, pp. 33–62.Google Scholar
Keister, Lisa. “Engineering Growth: Business Group Structure and Firm Performance in China’s Transitional Economy.” American Journal of Sociology 104 (Sept. 1998): 404–40.Google Scholar
Lau, Lawrence, Gérard Roland, and Yingyi Qian. “Reform without Losers: An Interpretation of China’s Dual-Track Approach to Transition.” Journal of Political Economy 108 (Feb. 2000): 120–43.Google Scholar
Lin, Kun-Chin. “Class Formation or Fragmentation? Allegiances and Divisions among Managers and Workers in State-Owned Enterprises.” The Kellogg Institute Working Paper Series “Social Movements and Organized Civil Society” #318, March 2005. Available online at http://www.nd.edu/~kellogg/themes/social.html.Google Scholar
Lin, Kun-Chin. and Lowell Dittmer. “Multiple Institutional Templates for Corporate China: The Evolution of Industrial Networks during Marketization.” In Asian Network Capitalism, ed. Hong-Yung Lee and Chung-In Moon. Forthcoming.Google Scholar
Lin, Yi-min, and Tian Zhu. “Ownership Restructuring in Chinese State Industry.” China Quarterly 166 (March 2001): 305–41.Google Scholar
Ma, Shu Y. “The Chinese Route to Privatization: The Evolution of the Shareholding System Option.” Asian Survey 38 (April 1998): 381–97.Google Scholar
Meyer, John W., and Brian Rowan. “Institutionalized Organizations: Formal Structure as Myth and Ceremony.” American Journal of Sociology 83 (Sept. 1977): 340–63.Google Scholar
Oi, Jean. “The Role of Local State in China’s Transitional Economy.” China Quarterly 144 (Dec. 1995): 132–49.Google Scholar
Qian, Yingyi. “Enterprise Reform in China: Agency Problems and Political Control.” Economics of Transition 4, no. 2 (1996): 427–47.Google Scholar
Qian, Yingyi. and Chenggang Xu. “Why China’s Economic Reforms Differ: The M-Form Hierarchy and Entry/Expansion of the Non-State Sector.” Economics of Transition 1, no. 2 (1993): 135–70.Google Scholar
Rawski, Thomas. “Progress without Privatization: The Reform of China’s State Industries.” In Changing Political Economies: Privatization in Post-Communist and Reforming Communist States, ed. Milor, Vedat. Boulder, Colo., 1996, pp. 27–52.Google Scholar
Scott, W. R. “Institutions and Organizations: Toward a Theoretical Synthesis.” In Institutional Environments and Organizations, ed. W. R. Scott and J. W. Meyer. Thousand Oaks, Calif., 1994, pp. 55–80.Google Scholar
Solnick, Steven L. “The Breakdown of Hierarchies in the Soviet Union and China: A Neoinstitutional Perspective.” World Politics 48 (Jan. 1996): 209–38.Google Scholar
Stark, David. “Recombinant Property in East European Capitalism.” American Journal of Sociology 101 (Jan. 1996): 993–1027.Google Scholar
Stinchcombe, Arthur L. “Social Structure and Organizations.” In Handbook of Organizational Behavior Management, ed. J. G. March. Chicago, 1965, pp. 142–93.Google Scholar
Uzzi, Brian. “Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness.” Administrative Science Quarterly 42, no. 1 (1997): 35–67.Google Scholar
Walder, Andrew. “Local Governments as Industrial Firms: An Organizational Analysis of China’s Transitional Economy.” American Journal of Sociology 101 (Sept. 1995): 263–301.Google Scholar
Williamson, Oliver E. “A Comparison of Alternative Approaches to Economic Organization.” Journal of Institutional and Theoretical Economics 146 (March 1990): 61–71.Google Scholar
Woodruff, David M. “Rules for Followers: Institutional Theory and the New Politics of Economic Backwardness in Russia.” Politics and Society 28 (Dec. 2000): 437–82.Google Scholar
Yang, Dali L. “State Capacity on the Rebound.” Journal of Democracy 14 (Jan. 2003): 43–50.Google Scholar

Magazines and Newspapers

Caijing [Finance and Economics Magazine]. Nov. 2000.Google Scholar
Gaige Neican [Internal Reference for Reform]. 1997.Google Scholar
Oil and Gas Journal, 10 Aug. 1998.Google Scholar
South China Morning Post, 20 Nov. 2001.Google Scholar

Unpublished Sources

China Natural Gas and Petroleum Corporation (CNPC). Guojia shiyou gongsi jiben kuangjia de yanjiu [A Study of the Basic Framework of the National Oil Company]. Internal publication, Beijing 1994.Google Scholar
China Natural Gas and Petroleum Corporation (CNPC). Zhongguo shiyou gongye guanli tizhi gaige yanjiu [A Study of the Reform of the Governance Structure of the Chinese Oil Industry]. Internally circulated research report, Beijing, 1998.Google Scholar
Lin, Kun-Chin. “Corporatizing China: Reinventing State Control for the Market.” Ph. D. diss., University of California, Berkeley, 2003.Google Scholar
Solinger, Dorothy. “Path Dependency in the Transition to Unemployment and the Formation of Safety Nets in China.” Paper presented to the American Political Science Association Annual Meeting, Philadelphia, Aug. 2003.Google Scholar

Oral Histories

Author’s interviews at Daqing, Heilongjiang, July 2001.Google Scholar
Author’s interviews at Dongying, Shandong, April 2001.Google Scholar
Author’s interviews in Karamay, Xinjiang, May–June 2001.Google Scholar
Author’s interviews at Luoyang, Henan, June 2002.Google Scholar
Bloomberg L.P., interview with author, Nov. 2001.Google Scholar