Does China offer a new variant of a “capitalist system”? Will the Chinese economy integrate into one business system, or will China end up with an economic system characterised by diversity in local business systems, connected via integrating markets or political institutions such as a federalist system? Analytically separating “constitutional” choice, I.e. the kind of economic regime the reforms are trying to achieve from “post-constitutional” interaction between the major economic actors, the paper offers a concept that allows singling out the major factors that are at the base of China’s transformation process: the search for corporate governance of new firms, networking, and local autonomy. The paper draws attention to the factors which can explain China’s success when compared to other transition economies, and to the shortcomings in the ongoing reform process.
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