State corporatism and business associations in China

Purpose - – All of the major market economies of East Asia have developed institutional arrangements through which business associations, labor unions, and other major types of associations maintain close relationships with the state. During the stage in which these were emerging economies, the state dominated this relationship in an arrangement known as “state corporatism.” But with democratization, Japan’s, Taiwan’s, and South Korea’s business associations and unions came more under the influence their members, and a new balance in relations with the state emerged in an arrangement known as “societal corporatism.” In China, which is still in transition from the status of an emerging economy, the state continues to dominate associations. The purpose of this paper is to explore the situation in China and to analyze whether the government is likely to maintain its dominance in future decades over powerful economic constituencies and their associations. Design/methodology/approach - – The historical transition from state corporatism to societal corporatist practices in East Asia is discussed on the basis of available English-language literature. This forms the framework for an analysis of China, based largely upon on-site research and Chinese-language writings. The paper includes case studies of China’s two major business associations. Findings - – The paper finds that China’s controls over business associations using state corporatist techniques are likely to persist in coming decades, due to the government’s vigilance in warding off any transition to members’ influence and societal corporatism. Practical implications - – The influence of the state on businesses and unions and on business associations affects the operations of these vival economic institutions as well as the shaping of government policies. Originality/value - – To understand relations between business associations and governments in East Asia, especially China, it is necessary to come to grips with the concept and practices of corporatism. This paper uses a comparative perspective to illuminate trends in the region’s capitalist countries and to cast new light on China.