Making Sense of Institutional Change in China: The Cultural Dimension of Economic Growth and Modernization

Building on a new model of institutions proposed by Aoki and the systemic approach to economic civilizations outlined by Kuran, this paper attempts an analysis of the cultural foundations of recent Chinese economic development. I argue that the cultural impact needs to be conceived as a creative process that involves linguistic entities and other public social items in order to provide integrative meaning to economic interactions and identities to different agents involved. I focus on three phenomena that stand at the center of economic culture in China, networks, localism and modernism. I eschew the standard dualism of individualism vs. collectivism in favour of a more detailed view on the self in social relationships. The Chinese pattern of social relations, guanxi, is also a constituent of localism, i.e. a peculiar arrangement and resulting dynamics of central-local interactions in governing the economy. Localism is balanced by culturalist controls of the center, which in contemporary China builds on the worldview of modernism. Thus, economic modernization is a cultural phenomenon on its own sake. I summarize these interactions in a process analysis based on Aoki's framework

Grasping reform: economic logic, political logic, and the state-society spiral

© School of Oriental and African Studies, University of London. © 1995 The China Quarterly. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the Publishers, or a licence permitting restricted copying issued in the UK by the Copyright Licensing Agency Ltd., 90 Tottenham Court Road, London, W1P 9HE, or in the USA by the Copyright Clearance Center, 27 Congress Street, Salem, MA 01970

Grasping reform: economic logic, political logic, and the state-society spiral

© School of Oriental and African Studies, University of London. © 1995 The China Quarterly. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the Publishers, or a licence permitting restricted copying issued in the UK by the Copyright Licensing Agency Ltd., 90 Tottenham Court Road, London, W1P 9HE, or in the USA by the Copyright Clearance Center, 27 Congress Street, Salem, MA 01970