Theorising State-Business Relations

This chapter advances a framework for analysing state-business exchange in China. Drawing on power-dependence and resource-dependence theories, it conceptualises inter-organisational relations as exchanges shaped by asymmetric control over valued resources and uncertainty in accessing them. These dynamics are situated within Chinese social norms – guanxi (reciprocal ties), renqing (obligation) and mianzi (reputation) – that strongly influence state-business exchanges. In contemporary China, the Party-state steers the private sector through co-optation mechanisms such as Party and legislative body membership, Party offices in firms, business associations and direct investment in private enterprises. Firms, in turn, employ coping strategies including lobbying, corruption and other non-market actions that constitute their Corporate Political Strategy. As the book's central analytical focus, Corporate Political Strategy links firm behaviour to the conditions of China's political economy and guides the empirical analysis of this book.