Is China Becoming Neoliberal?: Donald M. Nonini

Article
Is China Becoming Neoliberal?

Donald M. Nonini
University of North Carolina
Abstract Contemporary China has recently been seen as in the throes
of neoliberal restructuring. This claim is contested on theoretical and
methodological grounds. During the period of economic liberalization since the
death of Mao, China has shown a hybrid governance that has combined earlier
Maoist socialist, nationalist and developmentalist practices and discourses of
the Communist Party with the more recent market logic of market socialism.
A new cadre-capitalist class has emerged during liberalization, while large
numbers of farmers, urban workers and a floating population of urban
migrants have been dispossessed of land, employment and political rights.
Reactions by many higher-level Party cadres against dispossession show a residual
commitment to socialist values. Guanxi personalist ties within the new cadre-
capitalist class simultaneously blur the state/market boundary, lead to dis-
possession and create conditions for accelerated capitalist growth. The
conclusion is that contemporary China is not becoming neoliberal in either a
strong or weak sense, nor undergoing a process of neoliberalization, but instead
shows the emergence of an oligarchic corporate state and Party whose legitimacy
is being challenged by disenfranchised classes, but is still in control through its
efforts at modernization.
Keywords China after Mao clientelism Communist Party of China
economic liberalization market socialism neoliberalisms personalism
In June 1998, 35 members of the elite Standing Committee of the National

Peoples Congress presented an emergency resolution to the top leaders of
the Communist Party of China (CPC), accusing the government and Party
of violating workers rights of existence and trampling upon the worker
peasant alliance, and alluding to wide-scale protest and opposition to
Chinas program of economic liberalization (cited in Liew, 2001: 4950).
This resolution may surprise readers more accustomed to hearing of the
Chinese elites enthusiastic approbation of the slogan to get rich is
glorious. In this article, I not only seek to reflect on the meaning of this
surprise by challenging the claims to the universality, inevitability and
naturalness of neoliberalism(s) in the case of China made not only by
business pundits and World Bank economists, but also by some anthro-
pologists of China (Anagnost, 2004; Greenhalgh and Winkler, 2005; Rofel,
2007; Yan, 2003). I also examine the approaches of other anthropologists
who, while sometimes skeptical of such claims, also make arguments about
the geographic scope of neoliberalism which are more encompassing than
they can justify. The difficulty lies in imagining and theorizing alternatives
Vol 28(2) 145176 [DOI:10.1177/0308275X08091364]
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Critique of Anthropology 28(2)
outside neoliberalism not only those which are progressive, but also
those that are not.
In this article, beyond challenging arguments that a universal global
neoliberal order exists, I argue that although it may make sense to speak
of the prevalence of neoliberal ideology among certain privileged urban
residents of China, and specific leaders and factions of reformers within the
CPC, recent claims being made by some anthropologists of China about
neoliberal processes of restructuring, neoliberal capitalism and the domi-
nance of neoliberalism in China (Anagnost, 2004; Rofel, 2007; Yan, 2003)
cannot be justified, and in fact are overstatements unsupported by
evidence. Although these thoughtful scholars usually concede that neo-
liberalism in China is not a coherent formation, they fail to take into
account alternatives to neoliberalism within Chinese discursive traditions,
the divisions within the Chinese population over the market reforms they
call neoliberal, the implications of massive social protests against abuses
associated with market reforms that demonstrate that any market logic
(including neoliberalism) is far from hegemonic in China, and the impact
these protests have, not only on the rhetorics of CPC leaders, but also on
state and Party policies to protect those most harmed by market reforms
as in the example of the emergency resolution of the Standing Committee
referred to above.
In terms of an historically informed ethnography of liberalization in
China, there needs to be a franker acknowledgment of the limits to
ethnographic generalizations about the putative national dominance of
neoliberalism and the distribution of market-oriented (neoliberal?) subjec-
tivities in China. This is especially needed given the preference among
those making claims for neoliberal restructuring in China to focus on indi-
viduals instead of social groups; on urban settings instead of rural ones; on
elite and highly educated informants instead of displaced workers, farmers
or members of the floating population of migrants to urban areas; and on
processes of lifestyle and consumption choice instead of those of work,
administration, and social movement activism and protest. Instead, in
considering whether and to what extent the Chinese population buys
into market logics of thinking and acting, one must take into account the
sheer diversity of class (and class-associated traits such as educational, and
urban vs. rural) backgrounds in China, the discursive formations that exist
in China today (Maoist, Confucianist, Daoist, Buddhist, etc.) as alternatives
to ruling market logics, and the presence of large-scale protests exhibiting
widely held moral economies (Scott, 1976; Thompson, 1971) that draw on
socialist values to make claims on the reformist state. There is also the need
to focus ethnographic attention not only on individuals but also on social
relations oriented around collectivities and dyadic personalistic relations
called guanxi or relationship, if one is to understand how boundaries
between state and society, public and private, state and market, are defined
and mediated in everyday life in China. This article also sketches out an
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Nonini: Is China Becoming Neoliberal?
argument for the connections to be made between cultural-historical

specificities and differently situated political possibilities: that it is import-
ant to focus on the histories of neoliberalisms in the plural, because they
have first arisen in the US, the UK and Europe where, in variant forms, they
have now become dominant and hegemonic, and require the imperative
of a Gramscian war of maneuver where progressive people engage in
social experiments and activist political projects, at times utopian, which
envision future alternatives (e.g. as in another way is possible), as distinct
from China where the advent of capitalism and of global neoliberalism is
recent but neither dominant nor hegemonic, but where a popular politics
of mass protest, a war of position based on a moral economy of the social-
ist values of the past, may be more feasible. Challenging arguments for the
universalization of neoliberalism, including in China, this article argues for
a different and more complex anthropological understanding of how state
formation, politics, cultural practices and economic transformations are
related to one another, not only in China but elsewhere.
As a point of departure, Kipniss (2007b) recent critique of claims
about quality, suzhi, as a trait of putatively widespread Chinese neo-
liberalism made in the studies by several anthropologists of China
(Anagnost, 2004; Pun, 2003; Yan, 2003) is a salutary start, because Kipnis
points to issues of definitional inconsistency and confusion in how these
scholars come to apply neoliberal to various aspects of their field data.
However, as important as it is to insist on fidelity to ones ethnographic
data in ones theorizing, I would argue that the larger issues of claims
about the universalization of neoliberalism in the face of social diversity,
ethnographic representability and social unrest in China noted above are
of even greater urgency.
In what follows, I set out a two-part argument against the claim made
by some anthropologists of China that the Chinese population has widely
incorporated neoliberal subjectivities and practices, and by other anthro-
pologists that neoliberalism, and the process of neoliberalization, are
universal because of the global expansion of the capitalist mode of pro-
duction. First, I set out the claims of a globally dominant Anglo-American
neoliberalism as an ideology that seeks to characterize modern societies
and to offer normative solutions to their problems, and I identify strong
and weak versions of neoliberal discourse. These make claims about
markets, the relationship to the state to them, about globalization, and
about individuals. I ask to what extent the Communist Party of China and
the Chinese state have embodied a global neoliberalism as ideology in this
form. It is a globally dominant, but not universal ideology because of its
strong associations with the globalization projects of the US state and US-
based transnational corporations organized through global financial
leverage by US-influenced international financial institutions the World
Bank, International Monetary Fund (IMF) and World Trade Organization
(WTO) and by the projection of US military power.
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I present this ideological analysis in part to suggest not only that, as

ideology, a form of neoliberalism has not been dominant during the reform
period in China, but also in part to propose that the functioning of Chinas
logic of rule of what CPC leaders call market socialism which will be seen
to be oxymoronic can no more than that of Anglo-American neoliberal-
ism be understood without reference to everyday practices of personalism.
Personalism in contemporary capitalist societies makes it possible for a
privileged minority of the population to take advantage of the political
changes that market ideologies like market socialism or neoliberalism
initiate to gain access to national wealth and power, while it simultaneously
disadvantages a majority of the population by enacting divisions in everyday
life which these political changes make possible, thus preventing the
majority from gaining access to wealth or power. Under Chinas market
socialism, such a personalism is called having guanxi, relationship (Kipnis,
1997; Yan, 1996; Yang, 1994), while, say, under the hybrid US neoliberal/
neoconservative formation it would be called having connections or
networking, etc. (Holland et al., 2007).
Second, I argue that the existence of widespread and indeed daily
social protests against state cadres, and the market socialist reforms with
which they are identified in China, strongly suggest the absence of
hegemony in Gramscis (1971) sense of anything recognizable as market
socialism, much less neoliberalism. Chinese market socialism as a ruling
logic is entirely different from Anglo-American neoliberalisms in their
homelands which have, in contrast, become hegemonic. To compare the
two situations: neoliberal reforms in the US and UK from the 1970s
occurred in social formations where capitalism, at a variety of levels, was
entrenched institutionally, with its own legitimacy secured by widespread
prosperity, the welfare state and Cold War militarism; in contrast, market
socialist reforms by the CPC have had to invent capitalist practices and insti-
tutions from the top down in what have been risky economic and social
experiments. Moreover, these social protests are not entirely external to the
Party, but also characterize it internally as well in a dialectic of conflict
between factions about the course of Chinas future society and who should
benefit from, and pay for, its emergence. The anthropologists of China who
assert the hegemonic status of neoliberalism appear unaware of the
broader political significance of these protests for their claims. Finally, I
consider Gledhills (2004) analysis of a process of neoliberalization that
has been observed not only in the US and related heartlands of neo-
liberalism, but also in Latin America and elsewhere but, I argue, not in
China, where processes of neoliberalization are largely absent. Through-
out, I emphasize that the ruling logic of market socialism is that of an
oligarchic Communist Party whose telos of self-reproduction, as well as its
internal conflict between Party factions, drive the Chinese capitalist for-
mation and bind its elements uneasily together.
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Thinking theoretically about neoliberalisms (plural)
The ideas neoliberal and neoliberalism appear all the rage in anthro-
pology, having supplanted or qualified globalization as an apparent
defining feature of the contemporary world. In recent publications and
intellectual production circuits of anthropology (conferences, paper titles,
etc.), the term neoliberal has recently appeared so frequently, and been
applied with such abandon, that it risks being used to refer to almost any
political, economic, social or cultural process associated with contempor-
ary capitalism. If one does not simply declare from the outset as a matter
of theoretical fiat that the entire global economy is now neoliberal, then it
is appropriate to ask: what is neoliberalism, and what are its specificities
limits, and scope? And is there more than one form of neoliberalism?
Neoliberalism is a term that is difficult to theorize with, because it
has so many different meanings, both formally and in context. Thus it has
been referred to variously as an ideology or, relatedly, a hegemony or
hegemonic project (as used by e.g. Stuart Hall, 1988), or doctrine (as
in the Chicago School of Milton Friedman et al.), or a rhetoric, or
discourse and discursive formation, or a logic of governance and a
governmentality (Gordon, 1991). A term with so many meanings
obviously has great utility, because most progressive scholars can agree that
whatever neoliberalism is, they dont like it, and the ambiguity of the term
allows discursive coalitions of the like-minded to form without the trouble-
some bother of having to clarify exactly what it is they oppose or are critical
of. I want to argue that neoliberalism has many meanings because it has
a variety of contexts of use some of which are political-practical, some
theoretical-academic. In this process, however, the term has lost much of
its theoretical value.
But let me start with what should be an obvious historical point. One
can observe that whatever neoliberalism(s) is/are, it/they are associated
with capitalism. Yet a moments reflection also demonstrates that neo-
liberalisms and capitalism are not the same. Neoliberalism speaks or writes
of governance, in particular, about the relationship between capitalist
markets, the individual, and the state, while capitalism has to do with an
assemblage of economic, technical, legal and political arrangements
centered on the wage-labor relation in the process of production and
appropriation of surplus value by owners of the means of production. An
acquaintance with the history of capitalism demonstrates that capitalism
has existed as a mode of production prior to the emergence of the original
Anglo-American neoliberalisms from the 1950s onward, and that even since
then, capitalist societies have existed without neoliberalism becoming
dominant as a discourse of governance (e.g. 1960s1970s European
corporatist social democratic states). This is important: however we define
a neoliberalism, it is about processes of governance/rule which seek to
150
bring about certain relationships between the state, markets, capitalist

enterprise and populations. In this sense, it makes little sense to write of
neoliberal capitalism unless one is trying to make an historical claim of
association between a certain kind of capitalism and a certain kind of rule
called neoliberal.
Such a chronological association appears to be superficially the case
for the period since the 1970s, since there are ample reasons to argue that,
in many areas of the world, a certain kind of neoliberalism has clearly
become dominant in the sense that a certain ideology/discourse/
rhetoric/doctrine has come to dictate how relations between states, econ-
omies and populations of those who are ruled are to be organized. It is
dominant in that it has obtained coercive force over specific nation-states
and makes other ways of organizing these relations impossible, and it goes
under the name of globalization. Over the same period, as Harvey (1989)
has masterfully shown, there has been the rise of a new post-Fordist or
flexible form of capitalism, associated with shifts in the processes of
production (e.g. just-in-time, subcontracting, outsourcing), exchange (e.g.
rise of electronically mediated global financial markets and capital flows)
and consumption (e.g. emphases on lifestyles, niche markets, consumption
of experiences). Although, chronologically, the spread of global neoliber-
alism (as doctrine, rhetoric, ideology, discourse, etc.) has been associated
with flexible capitalism, and made it possible for transnational corporations
in such governed nation-states to penetrate and reorganize everyday life, is
there a necessary connection?
One of the virtues of flexible capitalism as outlined by Harvey and
others is that it can and does function within and across multiple nation-
state systems of political rule, and under different logics of rule includ-
ing Anglo-American neoliberalisms and Chinese market socialism
precisely by changing its organization in protean ways within a new inter-
national division of labor (Frbel et al., 1980), with intricate supply or
value chains of transnational scale. Still, only a kind of techno-determinism
and economism (which Harvey e.g. 2005 unfortunately adheres to)
would hold that flexible capitalism dictates its own conditions of existence
to the political systems of the nation-states it is organized within. Havent
we yet gotten beyond Marxist functionalist arguments about the needs of
capital? Therefore, the presence of flexible capitalist practices, such as
subcontracting and vertically disaggregated network organizations of
supply-chain production (Dicken, 1998: 234), in some areas and regions of
China does not imply the existence of neoliberal restructuring, but rather
raises the question of how the power relationships between Chinese actors
and foreign enterprises are articulated a question that can be answered
in more than one way: total domination by foreign enterprises over Chinese
local politics, full-stop (Gill, 1995), a graduated sovereignty creating zones
in China where practices of foreign enterprises can prevail (Ong, 1999), or
some other way.
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Although neoliberal globalization purports to be a system of global

economic governance, it should instead be read as a culturally specific
hegemonic and rhetorical project that seeks to universalize reforms of
states through privatization, elimination of import tariffs and price sub-
sidies, etc. in ways that favor capital accumulation by Western transnational
corporations, as set out by allied states (e.g. US Treasury and Federal
Reserve), and international financial institutions (IFIs) the World Bank,
IMF and WTO. The project of neoliberal globalization has arisen in the
heartlands of Anglo-American neoliberalism (the US, Great Britain, et al.),
and is closely associated with its specificities. The project of neoliberal
globalization is above all identified with attempts to impose economic,
especially financial and monetary, sovereignty over the postcolonial nation-
states of Latin America, sub-Saharan Africa, Eastern Europe and Central
Asia, and elsewhere (but not everywhere) in the form of Structural Adjust-
ment Programs, Conditionality and free-trade agreements such as NAFTA,
CAFTA (Central American Free Trade Agreement) and the World Trade
Organization. These programs have traumatized the peoples of these
nation-states and caused massive suffering when national governing elites
have been coerced or coopted into imposing new conditions of governance
which arguably can be called neoliberal in the Anglo-American sense, e.g.
forced privatization of state assets. In fact, these processes of imposing
neoliberal conditions of economic rule have not been global (i.e. world-
wide) but regionally specific. It is this process of geographically uneven
domination that some progressive anthropologists have taken to be
universal. But, as a project, the ambitions of globalization considerably
exceed its grasp.
Let us downsize our expectations of neoliberalism/s, by giving
it/them historical-geographical and cultural specificity.1 To do so thus
avoids the economistic reductionism of assuming that flexible capitalism
brings about the very political conditions within nation-states of de-
regulation or privatization, etc. which it needs for maximal capital accumu-
lation, and avoids the even worse assumption (on theoretical and political
grounds) that flexible capital has a universal global capacity to do so, and
that to do so is somehow neoliberal governance, restructuring, domi-
nation, etc. wherever it occurs in the world. Let me simply suggest here that
capital has no such capacity by itself, but that where it prevails it does so
through coercion exercised by the US state and the coalitions of states it
can muster, coercion which includes not only financial leveraging but also
military force (see e.g. Klein, 2007). Where such coercion cannot be exer-
cised, as in the case of China, there is no reason to assume that global
neoliberalism rises to domination, and brings in flexible capitalism in its
train.
I would like to take that step toward specificity and clarity by stipulating
that sociocultural anthropologists have been most productive in studying
neoliberalisms in their North American and European homes as cultural
152
systems as incomplete, contradictory, ridden with internal tensions and,

in the Gramscian sense, as hegemonic projects to govern society (Clarke,
2004; Holland et al., 2007; Kingfisher, 2002; Maskovsky and Kingfisher,
2001; Nonini, 1997). Ethnographic work has examined the tensions,
aporias and contradictions of neoliberalism in the US as a cultural system
in a variety of settings in urban neighborhoods undergoing gentrification
(Goode and Maskovsky, 2001; Maskovsky and Kingfisher, 2001); in urban
and rural settings where poor women have become the object of welfare
reform (Kingfisher, 1996); and in local politics in the American South
(Holland et al., 2007). Particularly important in confirming the open-
endedness, contingency and presence of tensions within neoliberal forma-
tions have been comparative studies by Morgen and Maskovsky (2003) and
by Kingfisher and her co-authors (Kingfisher, 2002) on welfare reform and
its effects on poor women in a variety of national settings. These studies
have provided the opportunity to theorize about neoliberalisms within and
(to some extent) beyond their North American and European homes on
the basis of rich ethnographic data.
Kingfisher (2002) observes that neoliberal globalization processes are
always hybrid they combine disparate elements from the transnational,
national and local, and are interwoven with non-neoliberal discourses (e.g.
self-determination in the case of New Zealands Maori) in specific
national instantiations (2002: 5260). This is what requires that we always
write of neoliberalisms in the plural, never neoliberalism as such. Extend-
ing Kingfishers insights, I argue that any form of market logic like market
socialism or neoliberalisms, which promotes capitalist markets as insti-
tutions that should autonomously govern the allocation of resources and
wealth, tends to combine with other discursive formations into more
politically compelling compounds of rule. In the case of China, market
socialism has recombined with pre-existing Maoist developmentalist,
nationalist and socialist discourses and practices in an uneasy synthesis
held together by the authoritarian rule of the CPC (Lin, 2006: 60131). It
was to this discursive and moral regime of the Party that the Emergency
Resolution from the Standing Committee cited above appealed.
It is in light of the imperatives for specificity that I challenge below the
claim by David Harvey (2005) that China has become neoliberal, and
discuss the claims made by progressive anthropologists (Ferguson and
Gupta, 2002; Gledhill, 2004; Sharma and Gupta, 2006) that implicitly imply
the universalization of neoliberal governance to all nation-states, including
China. I argue that their claims are both more incomplete at the national
level and more regionally limited in scope than they appear to be aware.
Gledhill (2004), based on his observations of the Anglo-American heart-
lands and Latin America, proposes the existence of extensive processes of
neoliberalization (see Peck and Tickell, 2002). He sees neoliberalism as
not simply a response to a crisis of accumulation and a readjustment of the
153
relations between capital and labor. . . . It is the ideology of the period in

which capitalism deepened to embrace the production of social life itself
(Gledhill, 2004: 340). Gledhill appears to include China within the diver-
sity of neoliberal regimes. Ferguson and Gupta (2002) make a similar
argument by extension in their discussion of a new transnational
neoliberal governmentality. They state that there is an emerging system
of transnational governmentality with modes of government . . . being set
up on a global scale (2002: 990), and the central effect of the new forms
of transnational governmentality . . . [is] to reconfigure states abilities to
spatialize their authority and to stake their claims to superior generality and
universality (2002: 996). Sharma and Gupta (2006: 247) make similar
expansive claims about neoliberal governmentalization in the post-
colonial world, and go so far as to invoke the post-structuralist analyses of
Nikolas Rose, Mitchell Dean and others on governmentality in advanced
liberal democracies as models to emulate in investigating transnational
neoliberal regimes as part of the globalization process. Here, also, the
extension of neoliberal governmentality to all world spaces, including
China, apparently has no limits.
Anthropologists of China have also recently made claims that neo-
liberalism prevails in China. There are claims about the neoliberal restruc-
turing of China (Yan, 2003: 511), about a dominant rhetoric of neoliberal
developmentalism (Anagnost, 2004: 197), about neoliberalism in China as
a national project about global reordering . . . a national imaginary about
a post-Cold War world (Rofel, 2007), and about a prevailing neoliberal
biopolitics in China (Greenhalgh and Winkler, 2005: 9).
Neoliberalism as ideology and neoliberalization as process
If we attend to the specificity of the history of US neoliberalism as the

animating ideology of neoliberal globalization, then most scholars would
agree that US neoliberalism as a dominant ideology in its North American
home implies at least the following set of claims by its proponents
(DeMartino, 2000; Holland et al., 2007; Kingfisher, 2002):
(A) markets are excellent: unregulated markets maximize social happiness and
individual satisfactions;
(B) state control over markets is horrible: state regulation of or interference in
markets distorts the otherwise optimal functioning of markets and
should be minimized to the point of leaving the state to perform only
those social order functions which markets cannot;
(C) globalization is best: free trade in capital and goods across national
borders, and exports defined by comparative advantage without state
impediments to mobility, allow markets to function best;
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(D) rational, self-interested individuals are best: the behavior of rational, self-
interested, entrepreneurial individuals in markets as consumers,
investors, bondholders, taxpayers, etc. is socially valuable as such
because it is efficient in optimizing the use of capital and goods, unlike
the behavior of inadequate market performers (e.g. poor minorities,
poor women raising children). Therefore, entrepreneurial market
actors should be supported by social wealth, while these other kinds of
people should never be supported.
I want to emphasize that US neoliberal ideology, hegemonic as it is in

the United States, is precisely an ideology a system (or at least collage) of
dominant ideas about the proper relationship between markets, enter-
prises, the state and the population widely held by major fractions of the
US citizenry. Because it is an ideology, structurally speaking, neoliberals
have to be hypocrites, for two reasons. First, political and economic elites
who promote it as a rhetoric may in fact are at times compelled to violate
its dictums by demanding (and getting) direct state intervention in markets
in the policies and informal governance practices they advocate. The
propensity of extreme neoliberal policies of deregulation and privatization
of markets in the US following neoliberal doctrine have led to periodic
crises (market excesses) that can only be solved by overt state inter-
ventions and extensive outlay of public funds, as in the case of the savings
and loan bail out of the early 1990s. Second, the elites associated with
selected sectors of the economy especially in weapons industries,
computer and surveillance technologies seek the contracts of the state
in the name of protecting national security showing a neoliberal/
neoconservative hybridity in practice. In both cases, elites get what they
want because of the hegemonic status of neoliberal ideology in US society.
It is for this reason that, over the long term, there is always a discrepancy
between neoliberal ideology and the practices of neoliberals. The
presence of state intervention is thus entailed by a dominant neoliberal
ideology (as in the US), but state interventions in the economy, as in China,
do not entail the presence of neoliberalism.
A useful theoretical innovation has been Gledhills analysis of the
process of neoliberalization in preference to a static view of neoliberalism
as a coherent cultural formation. Gledhill notes that since the mid-1990s,
reforms within the World Bank, and to a lesser extent the IMF, have led to
new more robust measures of subjectification, as for example applied to
Latin American indigenous groups and international NGOs. These
include the demand for empowerment through individual self-help, and
constraints on NGO activists to set funding priorities within a market
framework in defining community projects (Gledhill, 2004: 3346).
Within Latin America as well as North America and Britain, according to
Gledhill, deep neoliberalization has been promoted by new kinds of
consumerist individualism, by the contracting out of state functions as a
155
means of ensuring competition, and by the imposition of an audit

culture, in which government employees are evaluated by external firms
requiring continuous assessment and demands for evidence that goals are
being realized (2004: 3401). There is indeed evidence of such a process
of deep neoliberalization occurring in areas where neoliberal governance
prevails (see e.g. Holland et al., 2007: ch. 8). What is at issue is the degree
of penetration of deep neoliberalization nationally and the geographic
scope of the regions of the world in which it has taken root. I contend that
there is little evidence that it exists in China.
The first part of my argument goes as follows. A strong form of neo-
liberalism as a dominant ideology can be distinguished from a weak form.
A strong form of neoliberalism promotes all four claims mentioned above
markets are excellent, state controls over them are horrible, globalization
and free trade are best, and rational selfish market actors are best within
a cultural configuration of discursive logics, rhetorics and practices that is
hegemonic in a society, that is, a society in which these claims are natural-
ized, widely accepted and instituted as the way things are or should be. One
can point to wide-ranging consistencies in institutional logics such that it
makes sense, for example, to speak of the US as manifesting a strong
version of Reaganite neoliberalism, or the UK as displaying a Thatcherite
version, and thus refer to both as being neoliberal (see e.g. Peck and
Tickell, 2002). In contrast, a weak form of neoliberalism promotes some
but not all of the four claims, for example rejecting state interference in
markets but not accepting the superiority of globalization or rational selfish
market actors or it accepts all of these claims to a degree, but fails to estab-
lish them as hegemonic ideas that become institutionalized The differences
between a strong and a weak neoliberalism are ones of degree, but the
range is one along which a significant and important distinction can be
made. Evidence for a process of neoliberalization or for its absence will
prove decisive. If neither the strong nor weak forms of neoliberalism nor the process
of neoliberalization are present in China, what this article is about is not so much
neoliberalism as such, but its limits and what lies beyond it.
A recombinant (hybrid) form of oligarchic governance
A form of governance of the economy associated with the state now prevails
in China which is distinctive from a Western neoliberal formation. On the
one hand, the Communist Party has promoted liberalization since 1978
and thoroughly installed a socialist market economy in China. On the
other, beginning in the late 1970s when liberalization was being contem-
plated, the Party adopted a paternalist development strategy which has
been summarized by Liew (2005: 335) as to make no Chinese worse off
because of economic reform. Liew (2005: 335) notes that there was a
genuine desire of the Party, at least until 1992, to prevent the emergence
156
of significant income differentials and to avoid social conflict, but the idea
to make no Chinese worse off has been the subject of internal contention
within the Party since then. Observers agree that social inequality within
China has increased greatly since the early 1990s (Guan, 2001: 2469).
Chinas state and its governing logics since 1978 have represented a
recombinant or hybrid assortment of oligarchic institutions, practices and
disciplines of power that have juxtaposed older elements of Maoist govern-
ance (e.g. central planning and an ideology of socialist paternalism toward
peasants and workers) with elements of market liberalization in a kind
of slow-tempo improvisation aimed simultaneously at developing Chinas
forces of production, preserving the position and legitimacy of the Chinese
Communist Party, and, since the 1980s especially, consolidating the base of
economic accumulation of Chinas cadre-capitalist class (So, 2005). Over
the last two decades the boundary between the Chinese state and private
civil society has grown increasingly unclear, as many state cadres, particu-
larly in urban areas, have come to assume new entrepreneurial roles while
enlarging the vertical control of the state over local social and economic
organizations, and incorporating them into governance (Pieke, 2004).
Such ambiguity is in fact central to the new governing logic of the state,
and is mediated by the culturally specific arts of personalistic relationship,
or guanxi, discussed below.
The telos of Communist Party self-reproduction has involved its self-
reinvention (Liew, 2005) and has led its leaders to seek to find new ways
to lead the liberalization of the Chinese economy while maintaining a
monopoly of political power and ideological legitimacy, yet also seeking to
provide for its control over new institutional forms of economic power. Party
leaders have recognized since the 1990s that if the Party is to maintain its
control and legitimacy, it will have to modernize its practices, policies and
staff, especially through the recruitment of the new university-educated
population into the Party (Brdsgaard and Zheng, 2006; Walder, 2006).
However, the processes by which the Party has sought to liberalize the
economy have had the effect of increasing social and economic in-
equalities and are thus in contradiction with its need for legitimacy and
threaten its long-term capacity to maintain power (Brdsgaard and Zheng,
2006; Cai, 2006; Heimer, 2006). Attempts to improve its governance
capacity have had to mediate this contradiction, which is represented
within the Party by the conflicts between opposed factions in general
terms, between those Party leaders who seek to accelerate liberalization,
have ties to private entrepreneurs and others in the cadre-capitalist class,
and tend to come from urbanized and affluent regions, and those who seek
to redress the economic abuses associated with liberalization for workers
and peasants by advocating socialist policies of support and justice for these
revolutionary classes under Maoism, tend to have rural worker and peasant
backgrounds, and come from less developed, more peripheral regions of
the country (Dickson, 2004; Gries and Rosen, 2004). While one modality
157
of rule central to this telos has been the emergence of new practices of
reform and liberalization, which also generate conditions for predation on
the population the Party rules, another has been to adopt measures to
maintain Party legitimacy, given challenges to its control from both internal
challenges to liberalization and as I show below external popular
protests against what are widely conceived to be the new abuses. In general,
however, since the 1990s, the modality of rule associated with advancing
liberalization has been in the ascendancy (associated most strongly in
recent years with the factions supporting Zhu Rongji and Jiang Zemin),
while the modality of those supporting a return to socialist values of justice
and redistribution for the majority of the population workers and
peasants has been in retreat. Nonetheless, as my review below of processes
of liberalization or from another point of view, accumulation by dis-
possession (Harvey, 2005) shows, this latter modality has never
disappeared from the Partys relationship with society. Its presence seems
to be one that anthropologists who have done fieldwork in China have
largely ignored in their evocations of neoliberal restructuring.
How have Chinas governing rationalities incorporated market logics
in recombinations different from those found in the West? In China there
has been overt state/Party participation and direction in actively reorganiz-
ing the economy on behalf of the welfare of the population through the
development of the forces of production. In macro-systemic terms, the
state/Party challenge to IMF neoliberalism is set out by Liew:
Chinas market reform programme contains elements of the two key pillars of
the IMF/World Bank neo-liberal model market liberalisation and privatisation.
However . . . Chinas market reform, while it contains these elements of the . . .
model, is mediated distinctly by the Party/State and modifies this model. The
standard IMF/World Bank approach favours the free mobility of resources and
use of undistorted market prices, including wages, to allocate resources. . . .
Political interference with the market, state ownership and management of
sectors of the economy and any form of strategic industry policy are incom-
patible with the model. Economic reform in China has created a market
economy that departs sharply from this model. (2005: 332)
What has changed since 1978 has been neither the directive role of the
Party nor of the state it controls in defining what is appropriate economic
activity there has been clear continuity but instead the activities that
constitute that directive role. Liew (2005) claims that since 1978, that direc-
tive role of Party/state has changed from the prior one of redistributing
social wealth created through the productive process (through early land
reform, the Peoples Communes and collectivization of urban industries)
to that of regulating the creation of social wealth produced. However, the
evidence of extensive popular protest and fears for social stability such as
those expressed by the Standing Committee resolution points to an uncer-
tain, contingent and over the long term possibly unsuccessful effort by
the Party/state to regulate social wealth, just as in the Maoist period it failed
158
to successfully institutionalize wealth redistribution, as in partial attempts

to remedy the economic inequalities between more affluent coastal and
poorer inland regions.
Destabilizing trends have been set in motion. The Chinese economy
has come to increasingly incorporate certain market-driven elements
consistent with the policies of the accelerated liberalizers (e.g. most
recently Jiang Zemin) within the strategies of Party/state governance.
These include marketization of production and exchange at the local level,
geographic decentralization and even deconcentration of effective
Party/state direction over the new marketized economy, and the emerg-
ence of new elite national and local state-capitalist power holders, a fraction
of whom are tightly integrated via supply-chain networks with foreign
corporate investors, which represent the global capitalist economy.2
Under these circumstances, Party cadres and state officials have sought to
stabilize an unpredictable productive system that generates profound social
inequality (with great risks for Party rule and legitimacy) by trying to
promote the conditions for rapid economic growth riding the tiger
(Wedeman, 2002). Given the uncertainties of this development strategy
over time because of increasing economic, social and political inequalities
in the society, and persistence of the factional tensions mentioned above
within the CPC, it is difficult to imagine the emergence of a stable regime
of regulation except perhaps in the short term, through more violent
repression of widespread discontent, which generates further risks to the
Partys legitimacy and mandate of rule.
Liberalization or accumulation by dispossession?

The dialectical double move between capitalist
accumulation and socialist values
Changes to the post-Mao Chinese economy under the signs of liberalization

and reform from 1978 onward indeed represent what Chinese cadres them-
selves call a double-edged sword. One edge of the sword, since the late
1970s, has been extraordinary economic growth (exceeding 9% per year
over more than 20 years) brought on by the privatization and de-
nationalization of economic enterprises, the opening of export markets and
the new partnerships of state cadres with transnational investors, and with
local township, provincial and national domestic entrepreneurs.
The other edge of the sword has been the increasingly traumatic
episodes of accumulation by dispossession which, as Harvey (2003, 2005)
has noted, have separated vast numbers of rural farmers and urban workers
in China from their means of livelihood. Since the 1980s with the de-
collectivization of rural areas and decentralization, the peasant burden
has increased due to informal fees and exactions imposed by local cadres
(Lu, 1997), and by cadres takeover of previously collectivized Township
159
and Village Enterprises, which created new terms for labor exploitation. In
peri-urban areas, farmers land has been expropriated by local cadres
working with developers interested in new construction. Large numbers of
impoverished rural people have become part of the floating population
(now 100 million people), which has migrated to the large cities of eastern
and central China, where they have sought temporary work, usually as
relatively unskilled construction workers or factory operatives (Solinger,
2002; Zhang, 2001). Because the hukou or household registration system
keeps them from legally residing in cities, migrants form the bottom tier in
urban labor markets, where they compete with laid-off factory workers
(Solinger, 2002; Zhang, 2001). In the cities and towns, beginning in the
1990s, Deng Xiaopings policy of grasping the large and releasing the
small (zhuada fangxiao) de-nationalized large numbers of State-Owned
Enterprises (SOEs) (i.e. the small). With their factories closed down,
millions of urban workers were released and cast into conditions of wide-
spread pauperization and the misery of finding casual work in the informal
sector. A few SOEs (the large) were allowed to remain in operation and
received large injections of capital from state banks. For those still
employed, work tasks intensified, but pay remained stagnant (Liew, 2005;
Wedeman, 2002).
However, even here, socialist Maoist values and practices have been
manifested in the ways in which reform occurred, and the Party responded
to its worst abuses, especially when these led to widespread protests. Central
state and Party cadres have sought to ameliorate the peasant burden of
local cadre abuses by sending down inspection teams to locales, and to
some degree have been receptive to farmers petitions and appeals to
higher authorities (Lu, 1997: 132). SOE workers have often not been laid
off but instead furloughed, allowing them to receive small subsistence
allowances, and to receive subsidized housing and health care for three
years. Those belonging to the floating population can go back to their rural
villages, to what little they have, protected by the use-rights of households
to land provided them in the course of decollectivization. (The new Land
Law may be changing this residual right.) Repeatedly, the double move,
between socialist protection assured by the state and promoted by a faction
of the CPC, on the one hand, and the states provision of the ideal
conditions for their hyper-exploitation and marginalization on the other, is
in evidence. Viewed comparatively, the CPC has proceeded much more
slowly with liberalization and privatization than the post-Soviet ruling
parties of Russia, the ex-Soviet republics and Eastern Europe, and China
retains far more of its economic assets under state ownership than the latter
(Walder, 2006: 1719). My hypothesis is that the anchor of socialist values
within the CPC, and a concern about social stability and order, has slowed
down the movement of the ship of privatization and liberalization. But
anthropologists of China, overly impressed by the idea of neoliberal
restructuring, appear to have entirely ignored the implications of this
160
double move, which indicates real tensions within the CPC and Chinese
state about how to resolve the tensions between liberalization, prior
socialist/Maoist values and social stability.
The embourgeosiement of cadres
If rural farmers, urban workers and the floating population have all under-
gone dispossession, then who has gained possession of (in Marxs terms)
all the surplus value thus freed? According to So (2005), it is those who
have become the new cadre capitalist class. This is a bit too simple: the
new classes which have emerged with different private rights over the
means of production include geti, small business people, minying, private
entrepreneurs, guoying and dajiti, two related kinds of managers in the
public sector, and guanshang/guanying, former officials-turned private
owners of sold State Owned Enterprises (Lin, 2006: 255).
Nonetheless, for the purposes of this article, these will all be treated as
members of Sos cadre capitalist class. They have been formed by what So
(2005: 486) refers to as the embourgeoisiement [sic] of cadres. Govern-
ment cadres and Party officials have been in the vanguard of those profit-
ing by privatization and liberalization, while private entrepreneurs have
also emerged. Cadres transformed the collective local Township and Village
Enterprises they managed into businesses for their own profit. Many appro-
priated public property and set up completely private enterprises. After the
early 1990s, under the grasp the big, release the small policy, cadre
bourgeoisification expanded on a new scale. Guanshang/guanying cadres,
in particular, systematically diverted the assets and profits of large urban
SOEs into their own hands by using asset-stripping strategies such as the
one manager, two businesses arrangement, whereby cadres established
their own private businesses by taking over the assets of state enterprises
where they were previously managers (So, 2005: 486), while others fraudu-
lently used SOEs as cash cows by milking them of non-performing state
bank loans, funds, and by evading taxes (Wedeman, 2002: 1624).
In this environment, local cadres formed prosperous partnerships with
business people, including foreign corporate investors. Cadres provided
entrepreneurs with vital information and access to credit and to markets;
they shielded their capitalist partners from exactions by other cadres and
from official or irregular taxes; and they accorded their partners the politi-
cal protection they have needed to evade labor, health, pension and other
welfare regulations. In return, capitalists provided their cadres with
money (via fees) and gifts, integrated them into valuable social networks,
mobilized overseas connections, and provided them with shares in the
enterprises they formed (So, 2005: 487).
Sketched out all too briefly, these processes of embourgeoisement
point to the centrality of personalistic relationships between the members
of this new rising cadre-capitalist class within the class formation process.
161
Arts of guanxi as instrumental reason
In order to demonstrate fundamental features of Chinas recombinant

regime, one must examine the more intimate engagements that con-
temporary Chinese have with the state, markets, and persons in everyday
life. Central to those engagements has been guanxixue, the study of
guanxi, the popular art of instrumental reason associated with relation-
ship, which consists of widely shared understandings held in China, Taiwan
and among diaspora Chinese about how relationships are to be conducted
between people who stand in relative status positions to each other (Yang,
1994). As Yang (1994: 6) has pointed out, guanxi personalism is about gifts,
favors and banquets exchanged between two persons, which establishes
and maintains relations of increasing trust between them in circumstances
where each stands to gain something specific from the other in the relation-
ship. In all these settings, guanxi relationships are talked about and tech-
niques for conducting them developed and refined as part of this art.
Guanxi personalism is crucial to the understanding of Chinas current
recombinant governance regime because guanxi allows the mobilization of
people in networks to achieve governance goals, on scales local and
beyond, that cross-cut and penetrate the institutional distinctions between
state, market and civil society. If what distinguishes liberalization is the
processes of accumulation through dispossession and the consolidation of
a new cadre-capitalist class, what I have shown in discussing both is a
blurring of the distinction between what is state and public, and what is
market and private. The widespread use of guanxi relationships to connect
those who are in the sphere of the state with those in the sphere of the
market has made such blurring feasible for those in the cadre-capitalist
class, but not for others, to the point that it is increasingly impossible to dis-
tinguish whether the subjectivities of members of the new cadre-capitalist
class are primarily those of cadres or of capitalists. Instead, the members of
this group show hybrid subjectivities within which the logics of market
socialism and predatory post-Maoist party rule are closely intertwined, and
set the standard for how people are to conduct themselves given the
blurred boundary. In contrast, dispossessed SOE workers, farmers and the
floating population have sought largely unsuccessfully to employ guanxi
connections with the new elites, but, with the exception of labor bosses and
a few others, lack the resources (money for banquets, gifts and favors) to
do so, although they form guanxi relations among themselves to get by.
Exercise of the arts of guanxi by the Chinese population long predates
the founding of the Peoples Republic in 1949, and was evident at least as
early as the Qing dynasty (16461911). The zero point of guanxi distance
was relationships among family members. Beyond members of a family or
close kin, the bases for guanxi the shared conditions between two
persons serving as rationale for their forming a relationship of trust have
varied historically, but go back many centuries. A particularly important
guanxi base was sharing the same native place, tongxiang, for this allowed
162
persons who had migrated from their native rural places to cities elsewhere
in China or overseas to conduct business or serve in administration, to form
conditions of trust between them that ultimately could be vouched for by
family, kin and lineage mates back in the native place (Skinner, 1977:
5414). Other bases for guanxi (which overlapped with native place)
included tongxing, shared-surname imputing common descent in a clan;
tongshi, the shared workplace; tongxiao, a shared college or academy; and
tongxue, a shared educational experience. Some of the relationships con-
figured from these guanxi bases were between equals, such as fellow
students or workmates, while others were putatively benevolent ones
between people unequal in status, such as teacher and student, or labor
boss and ordinary member of a labor gang.
It is crucial to note as well that, prior to 1949, China had a long history
with centralized states and markets (including in labor and land), where
the experiences of people with both the market and the imperial state were
mediated through their guanxi relationships with merchants, officials and
others. From 1949 until the late 1970s, Maoist discourses of loyalty to Party
and state drove guanxi out of public life as corruption. Guanxi re-
emerged in the 1980s with liberalization and marketization: guanxixue
took on new life and in many respects experienced a transformation as it
intersected with a growing commodity economy with its attendant social
mobility and consumer desires (Yang, 1994: 172). What I sketch out in
conclusion is the interplay between the statist discourses central to the
paternalist rule of the CPC and the intersection of guanxi with the new
Chinese capitalism which has mediated the contradictions between the
older Maoist redistributionist ethic and the new conditions of market
socialism. Guanxi knowledge bears the same relationship to market social-
ist ideology as, in Scotts (1998) analysis, metis, local knowledge or
cunning, does to high modernist ideologies in both instances, the
former make the realization of the latters idealized simplifications possible
for privileged elements of the population, while for disadvantaged
elements, it works against their efforts to attain these ideals, but may
provide them with the improvisational capacities needed to survive.
Perspectives on markets, states and their relations

political economy, ideologies, daily practices
Harveys (2005) argument that China is becoming neoliberal appears to be

based on the conclusion that since the rise of Anglo-American neo-
liberalisms and the liberalization of China occurred during the same
period as globalization, then China must ipso facto be neoliberal. The
most precise Harvey comes to justifying why China is neoliberal is his state-
ment that in so far as neoliberalism requires a large, easily exploited, and
relatively powerless labor force, then China certainly qualifies as a
163
neoliberal economy, albeit with Chinese characteristics (2005: 144).

With such an escape clause, which fails to explicate complex cultural and
political dynamics, almost any description of a situation can be converted
into an explanation but at some cost to the truth. Most crucially, this
characterization ignores pre-existing configurations of state power and
reduces a dialectical encounter to a mechanical one-way causality where the
sheer force of neoliberal globalization transforms the non-neoliberal, non-
Euro-American other. I do not mean to make light of Harveys discussion,
for he insightfully connects the emergence of Chinese capitalism in post-
Maoist China to accumulation by dispossession (2005: 1535). Nonethe-
less, this process has occurred not because of the logic of the needs of
Chinese capital (since, within China, there was little of that between 1949
and 1978), much less because of needs of Western-based capital, but
because of top-down political transformations by an oligarchic Party bent
on preserving its rule and legitimacy within a specific cultural context, in
which, as I show below, neoliberal notions of market, state and the individ-
ual were largely alien.
Harvey makes no cogent argument that China is becoming neoliberal
in the deeper sense conveyed in the comparative work of anthropologists I
discuss above, who examine neoliberal cultural formations closely in the
everyday lives of people residing in the regions being reshaped by the post-
Washington consensus and its dominant institutions.
In what follows I propose to examine the major tenets of a form of
neoliberalism hegemonic in the US to determine whether a cognate
version of it has been incorporated into the views and beliefs of either a
large proportion of Party leaders or of non-elite Chinese. I do this in part
because of its usefulness in setting out what a global neoliberal ideology
specifically might look like, but also to suggest that an investigation of
guanxi during the current period of liberalization demonstrates the ways
in which the operation of guanxi allows certain classes, groups and people
to become privileged by the liberalization process. Such classes and groups
represent those who would be most inclined to adhere to market socialist
or even among some fractions of the population global neoliberal
ideology. However, the operation of guanxi marginalizes vast numbers of
people in other groups, particularly workers and peasants, who therefore
have less reason to buy into an ideology like market socialism or global
neoliberalisms.
(A) Markets are excellent, and (B) State controls over markets are horrible
At the inception of Chinas economic liberalization, Deng Xiaoping and
other Party reformers turned to markets not to restore Chinese capitalism
of the pre-1949 period or to create a new capitalist class. As Breslin (2006:
115) puts it, Chinas post-Mao leadership did not begin with an ideologi-
cal commitment to neoliberalism far from it. Instead, the autochthonous
move toward markets involved radical rethinking by top Party leaders about
164
Chinas development trajectory, and was related to the failures of the social-
ist accumulation process under Maoist central planning (Meisner, 1999:
450). They saw the need to break through the stasis that had set in by the
late Mao period in order to efficiently develop Chinas technology,
resources and labor power, and envisioned the markets then being cel-
ebrated in the US and Europe as the means to do so. Following Marx, they
identified markets as part of a necessary capitalist stage of freeing the forces
of production in order to re-socialize them within a prosperous future
socialist economy (Meisner, 1999: 452; Smart, 1997: 1769). Clearly, accord-
ing markets and private accumulation some constructive role in a complex
economy is not the same as allotting them the paramount role that
neoliberal ideology exalts.
In no way, however, did the reformers admiration of markets extend
to accepting the neoliberal claim that unregulated markets are excellent
and maximize social happiness and individual satisfactions. Although
Dengs reformers regarded markets as part of a capitalist stage leading to
socialism, the idea that they might be left uncontrolled by Chinas political
authority the CPC was anathema. Perpetuation of the Partys rule in
China demanded that it have exclusive control over Chinas productive
resources; no group other than cadres indoctrinated in Party loyalty could
be entrusted with the task of managing capitalist market production, when
it had such momentous social consequences (Meisner, 1999: 475).
This was consistent with the nationalist vision of Chinese leaders if
China was going to modernize through the development of productive
forces, it had to be within the overall framework of Communist rule to
protect the interests of the masses. Allowing unbridled free foreign invest-
ment and access to Chinas markets was out of the question. Nationalists in
the CPC had a critique of that as part of Western imperialism during the
19th-century period, with the Opium Wars and the unequal treaties
leading to the Treaty Port enclaves which the Western powers had pros-
ecuted precisely to establish an unregulated market in opium on Chinas
territory.3 Still, Party leaders and intellectuals believed the harnessing of
Chinas domestic markets, even through the Party, had risks. Markets could
be dangerous to justice and social order. Continuities in such attitudes
toward markets still existed well into the post-Mao period, and account not
only for the argument cadres and intellectuals made that only the Party
could forcefully guide the economy, but also for the moral claim made by
many in the Party that large numbers of people (e.g. SOE workers,
peasants) had to be provided with social protections (e.g. monthly
allowances, housing, health care) against the suffering generated by un-
regulated markets.
Strong ambivalences about, and controversy over, markets (particularly
in labor, land and capital) continue to exist in contemporary China. As
Smart observes: The adoption of market-based reforms continues to
generate serious debate within China . . . there has been consistent concern
165
with the social and cultural implications of the market-based reforms and
the opening to the capitalist world economy (1997: 17980).
It has been alleged that it is Eurocentric to claim that neoliberalism
requires the absence of state intervention, while neoliberalism in China
exhibits how privatization and liberalization can proceed through state
interventions. This argument is not only ad hominem but also deeply
logically flawed. US and British neoliberal ideology, as I have described it,
clearly rejects state regulation that is, at the level of ideology. As I point
out above, however, US and other Western neoliberals/neoconservatives in
practice call on the state for intervention, periodically in one way (during
crisis) and continually in another (in subsidies to military and surveillance
industries). But what are Western neoliberal ideologies, after all, if not
essential elements of broader hegemonic projects in which business and
allied intellectual groups (e.g. conservative think-tanks) can successfully
define the public interest as the interests of capital and corporations by
gaining widespread consent by citizens to business agendas? This position-
ing of neoliberal ideologies within the hegemonic institutions of capitalism
implying that capitalist enterprise has the power to intervene in state
affairs is precisely what defines a neoliberal social order. This is what does
not exist in China, and below I turn to how widespread protests in China
reveal the absence of hegemony of the state/capital interface. This is not
to say that there are no ideological neoliberals in China especially
among CPC factions, entrepreneurs (e.g. guanshang/guanying) and
among intellectuals there clearly are (see e.g. Wang, 2003).
How were these hostilities and ambivalences toward markets held to,
not only by the population at large but also by CPC cadres connected to
guanxi? Party leaders reservations about markets during the reform
period arose from their anxieties that the Partys lower-level local cadres
were susceptible to corruption that would lead to redirecting state
resources toward their own families, kinfolk and cronies that is, their
guanxi networks, guanxiwang; the operation of markets opened up far
greater opportunities for such personal takings. Still, the state was
embodied in state officials, the cadres of the CPC and their bureaucracies,
and they were to be in charge of the liberalization process. At the begin-
ning of liberalization, local cadres, their families and friends had deep
anxieties about the new market mechanisms and how the latter would
operate and affect them (e.g. by reducing funds from the central govern-
ment to local cadres under decentralization). They therefore sought
under liberalization to form guanxi relationships with the new managers
of the released SOEs, collective Township and Village Enterprises, and
private firms or even to become managers themselves.
Over the same period, those who were not Party cadres but well placed
through their previous experience or expertise sought to use their guanxi
relationships with cadres to take over state-owned facilities, seek state
contracts and other business opportunities, and gain protection from taxes
166
and fees. Yang (1994) offers two examples. The first deals with managers
of SOEs and collectively owned enterprises:
. . . [a]mong themselves, there is a lot of guanxi as they do favors for each other
not only in economic matters (exchanging goods, raw materials, market infor-
mation, and so on) but also in political matters. When one of their network is
being pressured or threatened by the state, they often rally to help each other
stay in their positions or rise up. (Yang, 1994: 161)
The second example concerns a private enterprise being set up by its staff
to go into retail trade:
The preparations were extensive. . . . the young corporation managers spent
months laying down a guanxi network to facilitate all aspects of their business.
Their supply sources (huoyuan) were their lifeline, so they cultivated relations
with old acquaintances, old schoolmates, friends, and friends of friends, with
anyone who was in any way connected with state distributing centers, wholesale
corporations, or sales departments of factories. (Yang, 1994: 1678)
(C) Globalization is best

Nor can a convincing case be made that either CPC elites or the Chinese
population as a whole believe that movement of capital and goods across
national borders without state impediments is desirable. This particular
neoliberal claim is widely rejected by the Party elite as is evident in im-
plemented Party and state policies. Chinas extensive controls on the
movement of capital were one reason that it remained largely unaffected
by capital flight during the Asian financial crisis of 19978, which was so
traumatic elsewhere in Asia (e.g. Thailand, Indonesia, Korea) (Stiglitz,
2002: 1256). This has not gone unnoticed. As Liew (2005: 332) noted
above, China through the Partys direction has departed radically from
IMF/World Bank and WTO neoliberal dictates over capital controls.
Instead, state policies and cadres practices have channeled foreign corpor-
ate investments through the Party to selected industries, regions and
special economic zones. What Aihwa Ong (1999) refers to as graduated
sovereignty is in evidence. Nor does Chinas government show much
commitment to free trade in commodities. Instead, like other Asian
developmental states (Deyo, 1992), it has subsidized strategic industries to
make them globally competitive vis-a-vis foreign firms exporting to Chinas
huge domestic market (e.g. by grasping the large); it places restrictions
on foreign investors who might compete with Chinese domestic firms
through controlling where foreign firms can invest; and it tolerates exten-
sive software and luxury-goods piracy. Chinas recent accession to the WTO
was controversial within the CPC, with Chinas negotiations with the WTO
over conditions of membership conducted under conditions so secret that
many Party members were not even aware of their principal provisions a
victory for the faction of accelerated liberalizers associated with Zhu Rongji
and Jiang Zemin.
167
Here again it is necessary to return from the commanding heights to

the intricacies of the everyday interactions between the state and capital
embodied in guanxi exchange. As part of the broader process of privatizing
government assets like the SOEs, the large bureaucracies of state ministries
and the Peoples Liberation Army (PLA) were reorganized in the 1980s to
engage directly in business undertakings, and particularly those related to
large foreign investors (Meisner, 1999: 4778). Although highest-level Party
leaders showed apprehension at the ideological level about the social
injuries risked by cadres association with private enterprise, such awareness
apparently did not extend to their own families and guanxi networks. Thus
the answer of these leaders to the question how might the state best guide
state-owned but now market-oriented enterprises toward socialist goals?
was to call on the princelings, taizi, the sons and daughters of the Partys
highest leaders. Princelings occupying the highest positions in ministries
and the PLA came to lead the new business consortia, as in the case of Kang
Hua, the extensive business empire managed and controlled by Deng
Pufang, Deng Xiaopings eldest son (Wedeman, 2002: 167). What better
embodiment of the state itself and its political virtues when controlled by
an oligarchic Party?
In Special Economic Zones (SEZ) established for the factories of
foreign investors, we can see the workings of guanxi even more closely.
Guanxi connections which Hong Kong investors have with relatives and
local cadres working in the Shenzhen SEZ and nearby have been crucial to
their successful investment in factory production (Smart and Smart, 1999:
18990). Similarly, Taiwanese investors, who represented the second largest
foreign investors in China in the early 1990s after Hong Kong, improvised
exchanges with local officials involving gift-giving, request of favors and
provision of banquets as part of their successful guanxi tactics to open up
and operate factories in Guangdong and Fujian provinces (Hsing, 1997).
Guanxi personalism continues to mark Chinas experiment with global
investors be they European, Japanese or American.
(D) The rational, self-interested individual market actor is best

The exaltation of the individual, self-interested actor as a social atom par-
ticipating in the market most sets off US and British neoliberalisms from
other market logics like that found in China. As Clarke notes: individual-
ism with familism is the elementary form of neo-liberalism a world of
possessive individualism constituted out of individual interests and their
interaction in markets. This is the fundamental claim about freedom of
(buying and selling) choice (2004: 62). The idea of the (gendered) indi-
vidual of neoliberalism, whose rationality lies in acting always for himself
and his family in the markets that constitute the good society, resonates with
foundational Western ideas of the self (Yang, 1994: 192) and classical
liberalisms ontology of rights-bearing individuals.
168
Unlike the individual atom (with its affinities for family) in the West,
the Chinese conception of person as manifested in guanxi relationships is
constructed around contextual and relational definitions of the self within
a pre-existing society distinguished by status differences and a moral order,
and around a fluidity between the self and others (Yang, 1994: 192). Guanxi
is a habitus or predisposition to seek to act in the view of other persons with
whom one is in contact as if one expects to benefit oneself only when one
also succeeds in benefiting others with whom one has a guanxi relationship
family members, kinfolk, school classmates, workmates, et al. One can
acceptably act to benefit oneself through market-oriented behavior as
consumer or employer (e.g. in buying a car or hiring a worker) when one
also benefits people with whom one has these relationships buying a car
from a classmate or hiring someone from ones natal village.
This discussion of guanxi personalism is not a diversion from my
theoretical consideration of whether a kind of neoliberalism is hegemonic
in China because it suggests ways in which vast numbers of people are, or
are not, coming to terms with liberalization in China, and helps identify the
sources of truly felt discontent. The everyday workings of guanxi serve to
privilege some at the expense of others in ways recognized by Chinese
popular culture. This is inherent in the instrumental logic of guanxi: its
discourse demarcates various relationships of comity and privilege with
specific kinds of people . . . but this by implication excludes numerous
others with whom one has no acknowledged relationship. . . . These people
can be legitimately taken advantage of, exploited, disciplined, abused, or
cheated (Nonini and Ong, 1997: 22). While new guanxi ties are forged and
maintained among the various diverse elements of the cadre capitalist class
noted above often mediated by gendered strategies of prestations involv-
ing sexual exploitation of young women by wealthy and powerful men
the vast majority of the population is shut out from guanxi which crosses
the divides between state, market and everyday social life. This exclusion
from guanxi is implicit in the acts of dispossession by many cadres of
farmers and urban workers, peculation of the governments funds through
milking SOE cash cows for non-performing bank loans, etc. Although this
is evident, what yet remains untold are stories of millions of lower-level CPC
members and cadres whose own ties to rural peasant villages and urban
working families remain, and who may still engage in guanxi exchanges
with impoverished workers and low-quality peasants. These CPC members
and cadres still form the great majority of the Party members on which the
Party and states paramount leaders rely for legitimacy (Walder, 2006:
1921).
To sum up, the strong version of neoliberalism does not exist in China
as a hegemonic project. It is more plausible that the weaker version which
exalts markets and consumerist values may have a limited purchase on
the Chinese population through the extension of consumerist values.
However, even if market participation has been routinized, I have argued
169
that claims B and C that markets should be unregulated by the state,

and that globalization processes uncontrolled by the state are best would
be widely rejected in China. This suggests that even the weaker version of
neoliberalism in China as hegemonic is difficult to argue for.
What, then, of Gledhills processes of [deep] neoliberalization?
Although this topic cannot be covered in detail, let us consider as one
manifestation of deep neoliberalization the audit culture of professionals
and others in contemporary flexible capitalist conditions in the West. (Note
that neoliberal audit culture which instills habits of individual self-
monitoring is emphatically not to be confused with labor discipline, which
has been present in industrial capitalism throughout its history.) Note also
that audit culture represents a regime or system of administration, not
merely the presence of those who can be considered to have neoliberal
habits, practices or views (rational calculation, individualization with
respect to markets, etc.). The audit culture shows continuous assessment
and demands for evidence that goals are being realized, requiring ongoing
measure of performance or quality (Gledhill, 2004: 3401). Nonethe-
less, neoliberal audit culture presupposes much more than technologies of
measurement and discipline: it assumes an objectified and de-personalized
relationship between the deracinated individual and the state or capital
created by these technologies. Neoliberal subjectivity requires not only an
earnest (naive) ontology in which the objective state or corporation rules
its individual subjects rationally and impersonally, but also that this occurs
in such a way that the state or corporation can act to withdraw from rule
through surveillance by encouraging the market, with its own subjectified
rationality, to intercede in its place.
But neoliberal audit culture appears, if not absent, at least under-
developed in China. For example, the citizens dossier, dangan, of docu-
ments, which in the Maoist period was required for membership in a unit
(danwei) or residency in rural areas, now appears to be permeated with a
spectrality the presence of ghosts, it is claimed, of the socialist entitle-
ments and rights for workers and peasants from the Maoist period (Yang,
2008). Because it is required only for state employment in an economy
which has rapidly privatized, many more privileged Chinese in private
employment, overseas, etc., have simply abandoned it (Yang, 2008). At the
same time, it continues to provide both displaced urban workers and
members of the floating population with residual socialist entitlements
and impediments (e.g. due to its connection to the hukou, household
registration system noted above; Yang, 2008). What the dossier no longer
represents for many Chinese outside the state sector is a mode of intensive
surveillance. Within the state sector, although neoliberal audit culture is
absent, other forms of audit culture specific to Chinas post-1949 develop-
ment trajectory appear to be present what Chinese interpret as Confucian-
ist and Maoist forms of auditing and deserve separate study (see Kipnis,
2007a). Similar arguments could be made that other processes of deep
170
neoliberalization mentioned by Gledhill are not prevalent in contemporary

China. Put another way, the hegemony a neoliberalism requires is not (yet,
or ever) present to sustain this process.
The moral economy of popular protest and social stability
As the 1998 emergency resolution before the Standing Committee of the

National Peoples Congress quoted at the beginning of this article demon-
strates, there is already among the conservative faction of the Communist
leadership great awareness of, and even alarm regarding, the degree of
social suffering which post-Mao liberalization and reform have caused large
numbers of people: marginal farmers, unemployed and off-duty workers,
people in the floating population crowded into city slums, inner-city resi-
dents evicted by developers and cadres without compensation from their
homes sited in choice commercial locations, people who have witnessed
themselves or their children suffer from industrial pollutants in the air and
water, and many others who have not gained directly or indirectly (as have
some intellectuals) from the embourgeoisement of cadres. These collective
traumas may often not be coded by all members of the Party elite as suffer-
ing, but they register all the same as a challenge to the legitimacy of the
Party and to their rule (Dickson, 2004). Indeed, the 1998 emergency
resolution cited at the beginning of the article states: Contradictions in
society are becoming sharper daily; demonstrations, rallies, petitions,
incidents involving attacks on Party and government show that social and
political instabilities are increasing daily (in Liew, 2001: 4950). China now
experiences an average of 200 incidents of protest per day throughout the
country, ranging from quiet sit-downs in factories and streets to all-out riots
by thousands of protesters. Chinas most senior police official estimates that
there were 74,000 protests of one kind or another in 2004 involving almost
4 million people (The Economist, 2005).
The tensions and contradictions within the highest levels of the CPC
are also coming out: according to a recent New York Times article: the
National Peoples Congress . . . is consumed with an ideological debate
over socialism and capitalism that many assumed had been buried by
Chinas long streak of fast economic growth (Kahn, 2006). Referring to a
dissident law professor who had the temerity to publicly attack Chinas new
WTO-buffed-up property rights law as copying capitalist civil law like
slaves and offering equal protection to a rich mans car and a beggar
mans stick, a critique which led to the law being rescinded, the New York
Times goes on to observe that his critics underestimated the continued
appeal of socialist ideas in a country where glaring disparities between rich
and poor, rampant corruption, labor abuses and land seizures offer
daily remainders of how far China has strayed from its official ideology
(Kahn, 2006).
171
Leaders at the highest level of the CPC are right to be concerned,

although at this point Party rule appears secure. What I would like to argue
is that the mass protests of those dispossessed of livelihood, land, health and
food need to be interpreted not in economistic terms as rational responses
to hardship and deprivation, but instead within the moral economy which
the relational ethics of guanxi establishes, particularly between status
unequals. As E.P. Thompson brilliantly observed in his classic essay, The
Moral Economy of the English Crowd in the Eighteenth Century (1971),
when elites violate long-standing tacit agreements between themselves and
those they rule, and thus jeopardize the survival of the latter, this provides
the moral charter for the militant and even violent protest by those they have
disadvantaged. In the case of contemporary China, people have not only
been physically dispossessed of the necessities of survival. Elites factory
managers, local government cadres and others in positions of power with
access to market resources have also repudiated pre-existing guanxi
relationships with those whose dispossession they have caused or assisted in
causing. For instance, SOE factory managers have claimed they have to
discontinue the subsidies, housing and health care of furloughed workers
who were long-term members of their factory units, while workers under-
stand that banks have continued to make nonperforming loans to these
factories, and the money loaned has disappeared into slush-funds which the
new-found prosperity of corrupt factory managers suggests they have
dipped into.
This may go far to explain the extreme anger and vitriol which
furloughed workers deprived of benefits, farmers who have lost their land,
people whose water supplies have been poisoned, and others who have
been the losers of liberalization, have displayed. Members of the new
cadre-capitalist class have been hyperactive in extending and reorienting
their guanxi tactics toward the new kinds of relationships between cadres
and entrepreneurs that privatization, mobilization of new labor forces in
capitalist production, and other institutional changes have made possible,
in the interests of personal capital accumulation. But, as I showed above,
guanxi delineates not only relationships of inclusion between those with
whom one has a relationship, but also those of exclusion as well. The newly
excluded are making their outrage heard. In the name of the socialism of
Mao Zedong, they invoke the pre-existing social contract which they see
corrupt cadres violating in these catalogues of traumas.
What these protests point to is a partial failure of legitimacy of the CPC
and the economic liberalization programs with which it is so strongly ident-
ified. They furthermore indicate that protesters sense there are still some
sympathetic cadres and leaders within the Party to protest to, in the name
of the state that came into being through a revolution led by Mao Zedong
and, they feel, Chinas workers and peasants.
These protests, however, may also indicate a failure of much anthro-
pology of contemporary China to pay adequate attention to the discontents
172
among wide segments of the population. Anthropologists focused on urban

settings, highly educated elites, middle-class professional families, new
consumption habits and cosmopolitan desires have no doubt presented
valuable ethnographic portrayals of people living their everyday lives
those, however, whose lives are defined in these ways. But what about the
majority of other Chinese? When anthropologists make grand claims about
the prevalence of neoliberal restructuring, neoliberal governmentality,
neoliberal subjectivities for China as a whole, they presuppose a hegemonic
order which is by no means evident, and are being insufficiently modest
about their empirical claims or the limited applicability of their theoretical
assertions about neoliberalism in China.
Other anthropologists, as well, have assumed rather than demonstrated
the validity of sweeping claims about the universalization of neoliberalism
around the world. But they have asserted claims about global neoliberal
governance as substantiated facts. A far more complex theoretical account
of neoliberalisms is called for, and this article has been an attempt to
adumbrate how one might begin to initiate it. Otherwise, the contempor-
ary moment in which neoliberal globalization exists as a US rhetorical and
hegemonic project may be misread as pointing to a natural and inevitable
process. That would be unwise, and even tragic, for it would allow that
rhetorical project to gain even greater facticity as it aspires, uncertainly, to
bring into existence its own global utopia.
Personalism, recombinant governance and the emergence

of new state formations
The analysis of guanxi in this article should suggest as a provisional

hypothesis that personalism, personal networks and clientelism are func-
tionally central to how states structured by market logics (neoliberalism,
market socialism, etc.) develop. These on-the-ground arrangements are
crucial to understanding how the majority of people in these state regimes
actually manage to get through daily life, which would otherwise be
unbearable, even as a small oligarchic group seizes on such arrangements
to gain power and advantage. In a comparative perspective, questions
about the roles of personalism, networking and clientelism need to be
asked of any regime of governance, including that of one neoliberal
homeland, the United States (see Holland et al., 2007: ch. 8). New investi-
gations into the social side of states as oligarchic or corporate formations
which function through personalism to privilege some while marginaliz-
ing others could move anthropologists significantly beyond the limits of
the simplifications of the discursive turn in anthropology (one of the
current shortcomings in the anthropological understanding of China)
toward a richer analysis of these political orders.
173
Notes
I want to thank Erik Reavely for research assistance carried out in connection with
finding sources for this article, and Catherine Kingfisher, Jeff Maskovsky, Kevin
Hewison, Sandy Smith-Nonini and the anonymous referees of Critique of Anthropology
for their careful and thoughtful reading of the article.
1 For histories of Anglo-American neoliberalisms, see chapters by Palley,

Lapavitsas, Clarke and Munck in Saad-Filho and Johnston (2005).
2 Foreign-owned enterprises in China accounted in 2004 for only 30.8 percent
of all industrial output of above scale enterprises (those with an annual output
of at least 5 million renminbi); see Naughton (2007: 303, Table 13.2).
3 This was also why the majority of Chinese intellectuals have long rejected
Western classical liberalism and its discourse of individual rights as Lin puts
it, the introduction of liberalism not only was contemporaneous with, but also
a part of violent foreign invasion and humiliation (2006: 236).
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Donald Nonini is Professor of Anthropology at the University of North Carolina

at Chapel Hill. He is the author and editor of books and articles on the cultural
politics of the Chinese diaspora, state formation in Southeast and East Asia, and on
local politics, activism and neoliberalism in the US South.
[email: donald.nonini@unc.edu]

Is China Becoming Neoliberal?: Donald M. Nonini

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Is China Becoming Neoliberal?

In June 1998, 35 members of the elite Standing Committee of the National

argument for the connections to be made between cultural-historical

I present this ideological analysis in part to suggest not only that, as

Thinking theoretically about neoliberalisms (plural)

bring about certain relationships between the state, markets, capitalist

Although neoliberal globalization purports to be a system of global

systems as incomplete, contradictory, ridden with internal tensions and,

relations between capital and labor. . . . It is the ideology of the period in

Neoliberalism as ideology and neoliberalization as process

If we attend to the specificity of the history of US neoliberalism as the

I want to emphasize that US neoliberal ideology, hegemonic as it is in

means of ensuring competition, and by the imposition of an audit

A recombinant (hybrid) form of oligarchic governance

to successfully institutionalize wealth redistribution, as in partial attempts

Liberalization or accumulation by dispossession?

Changes to the post-Mao Chinese economy under the signs of liberalization

The embourgeosiement of cadres

Arts of guanxi as instrumental reason

In order to demonstrate fundamental features of Chinas recombinant

Perspectives on markets, states and their relations

Harveys (2005) argument that China is becoming neoliberal appears to be

neoliberal economy, albeit with Chinese characteristics (2005: 144).

(C) Globalization is best

Here again it is necessary to return from the commanding heights to

(D) The rational, self-interested individual market actor is best

that claims B and C that markets should be unregulated by the state,

neoliberalization mentioned by Gledhill are not prevalent in contemporary

The moral economy of popular protest and social stability

As the 1998 emergency resolution before the Standing Committee of the

Leaders at the highest level of the CPC are right to be concerned,

among wide segments of the population. Anthropologists focused on urban

Personalism, recombinant governance and the emergence

The analysis of guanxi in this article should suggest as a provisional

1 For histories of Anglo-American neoliberalisms, see chapters by Palley,

Liew, L.H. (2005) Chinas Engagement with Neo-liberalism: Path Dependency,

Donald Nonini is Professor of Anthropology at the University of North Carolina

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