2019, Beijing: Social Science Academic Press
This book is based on my Ph.D. dissertation but could not get published for almost 10 years due to many reasons. The positive side, however, is that it gives me a relatively enough time to observe the long impact of the case I studied. The original title of the book is Transformation of Government-Business Relationships in the Chinese “Middle East”,but I changed it to the transformation of intimate relationship, which looks like a book on family relationship.
The “Middle East” in China, jokingly refers to the provincial region of Northern Shaanxi: a desert region where oil is produced. My book took as a case study on the process of “re-nationalizing private oil assets” in this region to examine the fluctuating relationship between private oil firms, giant state petroleum companies, local government, central government, and other major actors, through various stages of implementation.
My puzzle started from a simple question: When and how does a “local growth coalition” break down? This is a less frequently asked question, because for decades it has been widely believed that a political-economic coalition between local state and private business elites for growth constitutes one of the most important bases for economic prosperity and political stability in China. My case study of the “re-nationalizing private oil assets” in Shaanxi Province, however, showed that private entrepreneurs do, and can, rebel. The question was, under what conditions and through what strategies. My book investigated the effects and boundaries of these strategies. Applying an institutionalist critique, I studied the structural reasons that the once flourishing growth coalition in the Shaanxi oil-producing region collapsed. It became clear the conflict between provincial government and giant central state owned enterprises (SOEs) were the vital factor: the provincial government in Shaanxi had taken a pre-emptive move to “reprocess” oil assets controlled by private investors and “restructured” those assets into a provincial state-controlled oil company in order to avoid them being merged by PetroChina, a monopolistic behemoth SOE. Private entrepreneurs subsequently became the victims of centralization and provincialization. What followed was their strategic retaliation.
The retaliation from Private Entrepreneurs (oil bosses) saw them employing mechanisms that generated interest in the unfolding events from a local provincial, to national and even international arena. What eventuated was a new coalition between private entrepreneurs (especially former local cadres, local “gentries”, and educated investors) and liberal intellectuals in Beijing. This coalition played a formidable role in collective actions against the local provincial government by mobilizing their political, economic, and cultural capitals informally and formally at different stages. These rebellious strategies forced the provincial government to make painstaking efforts to rebuild a new clientelist-corporatist relationship with local business elites. And it became clear that private elites don’t always need local government support to succeed – especially not when they are able to mobilize support from the centre.
To solve the rebelling problem, one of the keys is whether stake holders can achieve an agreement on certain asset, i.e., consideration of values. I coin a concept as “dilemma of consideration” for describing the phenomenon that both sides of a merging business have the willingness for a deal but the certain mechanisms fail. There are three sorts of failing: the failing of clientelism when the local government loses the capacity and wills to protect private investors; the failing of technique when a calculative basis lacks; the failing of discourses when the moral appeals surpass of private oil investors to the appeals for economic compensation. What really happened was that the state chose to solve this market dispute through political weapons, which distorted the power relationship in the market, triggered resistance, and caused a hard-landing of the so-called bargained authoritarianism.
The failing for consideration essentially roots in the asymmetric relationship between the state and the business, and ironically, the consensus for the growth coalition turn out to be the obstacle for achieving a new deal for consideration when the coalition has collapsed. A new type of state-business relation based on a more equal configuration among central government, central state enterprises, local government, local state enterprises, and private investors is demanded for a sustainable growth of private and public sectors.
Given the high political sensitivity, I employed multiple approaches to access the data, including small survey, in-depth ethnographic interviews, and context analysis of secondary materials. For a variety of reasons, only a limited number of materials were utilized in my book.
For part of the book, please check at
Lu, Peng. 2018. “How a local growth coalition collapsed: A case study of an anti-confiscation movement of private oil investors in a northwestern Chinese county”, In: Guo, Yingjie (eds). Local Elites in Post-Mao China, London: Routledge, pp.149-169. (download the full text here)
