Politicizing Business
How Firms Are Made to Serve the Party-State in China
(Cambridge University Press, 2025)
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This book discusses the political costs of doing business in China and the limits of China's political economy model through in-depth research on state-business relations.
I argue that despite the widely recognized efforts in building market supporting institutions, the Chinese state has never granted businesses full autonomy. Instead, the state sees business as political actors and uses firms for political goals when the state needs them or where the state sees fit. Such politicization of firms—using business for political goals by imposing political services upon firms—often hurts business interests and results in the retreat of private firms, which will likely hurt China’s long-term growth.
This book uncovers two previously unnoticed forms of politicization of firms by the state. The first is the elicitation of contributions from firms to what I call authoritarian leaders’ visibility projects—large scale public projects with the real purpose of boosting an official’s political visibility and career. The second form is to have firms help the state exercise societal control, including appeasement and coercion, thereby shielding the state from blame.
Politicization of business often induces conflicts between the state and firms, particularly private firms, who often are forced out of business, thereby contributing to a state-dominated market in many sectors. I show the above patterns with quantitative and qualitative evidence from two sectors, urban transportation, and waste treatment, across Chinese cities.
Politicization, much like these seemingly unremarkable sectors, can be quiet yet transformative. When firms are treated as part of the political system itself, they are asked to alter their operations in subtle but far-reaching ways to serve the state and its officials.
This project is built on large-N analysis, hundreds of interviews in 15 Chinese cities from 2015 to 2019, and in-depth case studies.
A mid-size waste landfill in a southwest Chinese city with a population of 600,000. September, 2015.
Bus Rapid Transit (BRT) system in Guangzhou city. Photo source: itdp.org.cn
Inside a waste incineration plant's trash storage bunker. Eastern China. October, 2015.
Endorsements
Endorsements
‘The Chinese Communist Party has always been ambivalent about how to treat the private sector of the economy. Professor Leng’s superb study provides us with a nuanced view of this complicated relationship. Using detailed case studies (the urban bus sector and waste management) she demonstrates convincingly how the authoritarian political economy leads to the politicization of business. Businesses are seen as providing career support to individual officials through visibility projects and providing systemic support aiding social control. Far from outcomes being solely attributable to Xi Jinping’s or any central leader’s approach, she demonstrates how government–business relations are driven by the incentive system under which local officials operate. The book is a must-read, not only for those interested in government–business relations but also for those who seek a deeper, more nuanced understanding of China’s political economy.’
Tony Saich - Daewoo Professor of International Affairs, Harvard Kennedy School
‘For all the undeniable successes of China’s economic model, Ning Leng’s excellent new book reminds us of the fragility of business-state relations by exploring variation in state encroachment in two vital sectors in convincing detail. Deeply researched and clearly argued, Politicizing Business is a major contribution.’
Tim Frye - Marshall D. Shulman Professor of Post-Soviet Politics, Columbia University
‘Professor Ning Leng has written a timely book. The central phenomenon she tackled - the phenomenon of visibility projects - is a salient feature of the Chinese economy and yet there is almost no detailed scholarly treatment of the topic. Her book delves into and unpacks this issue, and it will enhance our understanding of China in important ways.’
Yasheng Huang - Epoch Foundation Professor of Global Economics and Management, MIT Sloan School of Management
‘This is a powerful account of the politicization of business in contemporary China and its institutional roots. In China’s political economy, where no firm is protected from encroachments of the state, Leng illuminates how and why private firms lose to state firms in the competition to meet demands for political goods and services. Leng makes her arguments with vivid case studies and material from hundreds of interviews conducted in years of fieldwork in fifteen cities. This is an important contribution to our understanding of the business–government relationship under authoritarianism.’
Melanie Manion - Vor Broker Family Distinguished Professor of Political Science, Duke University
Media
Media
Author interview with The Wire China: The Political Costs of Doing Business in China
Harvard Kenney School, The Rajawali Foundation Institute for Asia. New Insights and author Q&A.
CSIS, Pekingology podcast
Google Sites
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