El capitalismo de partido-Estado de China y la reacción global
China’s Party-State
Capitalism and
International Backlash
From Interdependence to Insecurity
Margaret M. Pearson,
Meg Rithmire, y
Kellee S. Tsai
Efforts to guarantee
national security in both China and countries of the Organisation for Economic
Co-operation and Development (OECD) increasingly concern the activities of
ªrms. Legal frameworks in several states, including China, have been recon-
ªgured to include ªrms in intelligence and security work, and national secu-
rity imperatives spearhead justiªcations for new barriers to inward and
outward investment in countries that have long embraced free ºows of capital
across borders, such as the United States. This trend, evident since the mid-
2010s, runs counter to the expectations of international relations literature and
studies of “China’s rise” that highlight traditional security issues (p.ej., territo-
rial tensions) as the locus of interstate competition, and that view economic
interdependence as a force for cooperation.
Nation-states do, por supuesto, have territorial, political, and ideological dis-
putes with the People’s Republic of China (PRC) government itself, yet legisla-
tures and regulators have taken punitive actions against Chinese businesses,
and government ofªcials and diplomats have coordinated transnationally
with similar intent. In just three years, the European Commission went from
describing Chinese ªrms’ economic activities in developed democracies as a
“reciprocal beneªt,” to viewing such engagement as a major security liability.1
Margaret M. Pearson is the Dr. Horace E. and Wilma V. Harrison Distinguished Professor in the Depart-
ment of Government and Politics at University of Maryland, parque universitario. Meg Rithmire is the F. Warren
MacFarlan Associate Professor at Harvard Business School. Kellee S. Tsai is Dean of Humanities and Social
Science and Chair Professor of Social Science at Hong Kong University of Science and Technology.
For helpful feedback, the authors thank Rawi Abdelal, Kristin Fabbe, Douglas Grob, Jimmy Good-
rich, Michael Horowitz, the anonymous reviewers, and seminar participants at Harvard Business
School, the Elliott School of International Affairs at George Washington University, the University
of Wisconsin–Madison, the University of Duisburg-Essen, y el 2019 American Political Science
Association Annual Meeting. The authors thank the Department of Research and Faculty Devel-
opment at Harvard Business School for ªnancial support. For research assistance, the authors
thank Galit Goldstein, Yihao Li, Jingyu Liu, and Warren Wenzhi Lu.
1. High Representative of the Union for Foreign Affairs and Security Policy, Joint Communication
to the European Parliament and the Council (Bruselas: European Commission, Junio 22, 2016),
pag. 2, https://eeas.europa.eu/archives/docs/china/docs/joint_communication_to_the_european
_parliament_and_the_council_-_elements_for_a_new_eu_strategy_on_china.pdf. El 2016 informe
identiªes changes within China that are consistent with what we describe in this article, but the re-
port retains previous EU-China strategies on engagement and mutual beneªt. Por 2019, the report’s
tone had shifted to “strategic competition,” stating that the “EU’s approach to China should
Seguridad Internacional, volumen. 47, No. 2 (Caer 2022), páginas. 135–176, https://doi.org/10.1162/isec_a_00447
© 2022 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
135
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Seguridad Internacional 47:2 136
Por qué? We propose that both the signiªcant evolution of China’s political econ-
omy and subsequent reactions from many advanced industrialized countries
are best explained in terms of security dilemma dynamics. Speciªcally, el
Chinese Communist Party’s (CCP) actions to ensure regime security—actions
responding to perceived domestic and external threats—have generated inse-
curity in other states, causing them to adopt measures to constrain Chinese
ªrms. These reactions have led to security competition between China and
other states. The emergence of security dilemma and security competition dy-
namics in economic relations is surprising because economic interdependence
is typically expected to mitigate interstate conºict.2 Security competition with
China in the economic realm thus offers an opportunity to expand conceptions
of security dilemmas and competition, and indeed security, to include contest-
ation over ªrms and the consequences of interdependence, especially when
clear distinctions between military and civilian uses of technology, comunal-
cations systems, and data are not easily drawn.
Además, we contend that explaining the backlash against China requires
understanding the evolution of its economic model to what we call “party-
state capitalism.” Since the end of the ªrst decade of the 2000s, China’s politi-
cal economy has shifted from a familiar form of state capitalism to one in
which the party-state has adjusted and expanded its role in the economy. Este
change has been driven by the leadership’s uncertainty about its economic
modelo, heightened anxiety after the 2007–2009 global ªnancial crisis, y un
more generalized perception of domestic and external threats. The CCP’s
approach to economic governance became “securitized,” such that political
control over ªrms and risk management are prioritized over rapid growth.
We identify two signature manifestations of “party-state capitalism”: (1) sig-
niªcant expansion of party-state authority in ªrms through changes in corpo-
rate governance and state-led ªnancial instruments; y (2) drawing political
“red lines” to enforce political fealty by various economic actors.
A major outcome of this change in China’s domestic political economy is
therefore take account of the evolving nature of the Chinese economy.” High Representative
of the Union for Foreign Affairs and Security Policy, EU-China: A Strategic Outlook (Bruselas:
European Commission, Marzo 12, 2019), pag. 5, https://ec.europa.eu/info/sites/default/ªles/
communication-eu-china-a-strategic-outlook.pdf.
2. See Katherine Barbieri, “Economic Interdependence: A Path to Peace or a Source of Interstate
Conºict?” Journal of Peace Research, volumen 33, No. 1 (Febrero 1996), páginas. 29–49, https://doi.org/
10.1177%2F0022343396033001003; and Joanne Gowa and Edward D. Mansªeld, “Power Politics
and International Trade,” American Political Science Review, volumen. 87, No. 2 (Junio 1993), páginas. 408–420,
https://doi.org/10.2307/2939050.
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El capitalismo de partido-Estado de China y la reacción global 137
how the party-state treats both state-owned and private capital, which obfus-
cates where the party-state ends and ªrms begin.3 The blurred boundary be-
tween the Chinese state and ªrms has generated perceptions of insecurity by
other states because increased party-state economic control is considered as a
new security capability and has fueled anxiety about China’s intentions to
weaponize economic relations. In response to China’s party-state capitalism,
the United States, Europa, and other countries have established or revitalized
investment review institutions, endeavored to restrict Chinese “national cham-
pion” ªrms, and initiated policies and novel institutions in response to its
unique economic system. The evolution of China’s model has elevated eco-
nomic interdependence and the actions of both Chinese and international
ªrms to a central place in national security deliberations. By pointing to the
economic origins of a security dilemma, this article reveals how the unique
challenges of party-state capitalism in China have spurred national govern-
ments and international institutions to reshape their own economic strategies
in ways that impact the future of globalization.
We note several points about the scope of our analysis. Primero, backlash
against China is concentrated in the major developed economies. The United
States has enacted the most regulatory and legislative measures, y, a pesar de
they vary in their responses, other OECD members have undertaken similar
efforts.4 By contrast, some observers from the developing world have ex-
pressed a preference that their countries avoid confrontational actions.5 Sec-
ond, only a subset of China’s economy operates at the forefront of party-state
capitalismo, eliciting international responses. Of primary relevance are large
companies in strategically crucial sectors (p.ej., technology and communica-
3. Domestically, the Chinese Communist Party’s (CCP) emboldened role threatens to alienate cap-
italists, on whom the country has depended for growth and innovation. We discuss this, and other
outcomes of party-state capitalism, elsewhere. See Margaret Pearson, Meg Rithmire, and Kellee S.
Tsai, “Party-State Capitalism in China,” Current History, volumen. 120, No. 827 (2021), páginas. 207–213,
https://doi.org/10.1525/curh.2021.120.827.207.
4. Domestic politics and different trade and economic relationships with China create variation in
countries’ reactions to Chinese ªrms. European countries, Por ejemplo, differ from one another
and from the United States. This article focuses on the commonalities of Organisation for Eco-
nomic Co-operation and Development (OECD) reactions in time and direction. Explaining varia-
tion among countries is beyond the scope of this article but would be part of a promising research
agenda on how China’s economic model has generated political economic changes abroad.
5. W.. Gyude Moore, former Liberian minister of public works, argues that African governments,
though reliant on China’s infrastructure investments, do not see China as an existential threat.
W.. Gyude Moore, “Biden Already Has Africa’s Early Goodwill, Here’s How to Deliver on Its
Promise,” Quartz Africa, Enero 22, 2021, https://qz.com/africa/1961323/how-joe-biden-can-
revamp-us-africa-policy-with-an-eye-on-china/.
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Seguridad Internacional 47:2 138
ciones) or with dual-use (civilian and military) capacidades. Small and medium
enterprises, particularly those with a domestic focus, are less affected by the
“securitization” of the economy. Finalmente, while the security dilemma dynam-
ics represent a novel and consequential conºictual
trend in the global
economía, we recognize that other arenas of economic tension are not well ex-
plained in security dilemma terms because they are not about security, pero
rather classic domains of economic competition. We return to this idea at the
end of the article.
The article proceeds as follows. We start by making the case that economic
interdependence has become a critical source of insecurity for both China and
its global economic partners. The next section draws on the security dilemma
logic to theorize how important changes in China’s domestic political econ-
omy over the past decade have resulted in backlash and spiral dynamics. Nosotros
then show how security competition took the form of global economic back-
lash against Chinese ªrms and conclude by reºecting on the implications of
this security dilemma for global economic relations.
Economic Interdependence as a Source of Insecurity
Por décadas, international relations scholarship has explored scenarios for
U.S.-China conºict in the context of China’s growing inºuence. At one end of
the theoretical spectrum, John Mearsheimer’s formulation of offensive realism
depicts militarized rivalry between the United States and China as inevitable,
whereby a dominant United States seeks to diminish a rising China’s power.6
Por el contrario, liberal institutionalism proposes that economic interdependence
with China offers a promising basis for peace, reassurance, and cooperation in
security relations.7 Scholarship in this vein suggests that economic cooperation
can reduce the propensity for military conºict arising from a security di-
lemma.8 In short, the complex interdependence that underlies a liberal global
6. Juan J.. mearsheimer, La tragedia de la política de las grandes potencias (Nueva York: W.. W.. norton, 2001); y
Juan J.. mearsheimer, “Can China Rise Peacefully?” National Interest, Octubre 25, 2014, https://
nationalinterest.org/commentary/can-china-rise-peacefully-10204.
7. GRAMO. John Ikenberry, “The Rise of China and the Future of the West: Can the Liberal System Sur-
vive?” Foreign Affairs, volumen. 87, No. 1 (January/February 2008), páginas. 23–37; and see, by way of com-
parison, Nana de Graaff, Tobias ten Brink, and Inderjeet Parmar, “China’s Rise in a Liberal World
Order in Transition: Introduction to the FORUM,” Review of International Political Economy, volumen. 27,
No. 2 (2020), páginas. 191–207, https://doi.org/10.1080/09692290.2019.1709880.
8. Debates surrounding this classical position on the pacifying effects of trade include Edward D.
Mansªeld and Brian M. Pollins, Economic Interdependence and International Conºict: New Perspectives
on an Enduring Debate (ann-arbor: Prensa de la Universidad de Michigan, 2003); Katherine Barbieri, The Lib-
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El capitalismo de partido-Estado de China y la reacción global 139
economic order, especially between the world’s two largest economies, tiene
long been viewed as a basis for cooperation or even a mechanism through
which the United States might change China’s behavior.9 To the extent that
China’s economic rise has prompted warnings of rivalry or conºict, ellos son
based primarily on a structural realist logic that focuses on shifts in relative
power among states.10 Such accounts highlight the size of China’s economy
and its relative economic power vis-à-vis other states, leading to hypotheses
about whether China will achieve the level of technical prowess required to
challenge U.S. military hegemony.11
Given this theoretical context, it is puzzling that economic interdependence
constitutes the widest and thus far the sharpest point of conºict in China’s re-
lations with the United States and other industrialized economic partners.
Political leaders in several countries have for years criticized China’s trade-
distorting subsidies, currency practices, and various elements of its “state
capitalist” system.12 Yet a new and more urgent concern is that economic en-
gagement with China constitutes a security risk, and this view has quickly ac-
cumulated support in OECD countries from political parties spanning the
ideological spectrum. Several governments have adopted or expanded institu-
tions to review the security implications of both inward and outbound invest-
mentos. China’s national champions,
including private ªrms, ha sido
targeted by tools ranging from economic sanctions and entity listings to diplo-
matic campaigns. En respuesta, China has threatened to withdraw investment
from countries that exclude its ªrms from initiatives such as 5G deployment.
Mientras tanto, Beijing has limited market access for multinational ªrms that
criticize some of China’s policies.
After decades of arguments that interdependence would temper mispercep-
eral Illusion: Does Trade Promote Peace? (ann-arbor: Prensa de la Universidad de Michigan, 2002); Christina
l. Davis and Sophie Meunier, “Business as Usual: Economic Responses to Political Tensions,"
American Journal of Political Science, volumen. 55, No. 3 (Julio 2011), páginas. 628–646, https://doi.org/10.1111/
j.1540-5907.2010.00507.x; and Aaron L. Friedberg, “Ripe for Rivalry: Prospects for Peace in a Multi-
polar Asia,” Seguridad Internacional, volumen. 18, No. 3 (Invierno 1993/94), páginas. 5–33, https://doi.org/
10.2307/2539204.
9. Ikenberry, “The Rise of China.”
10. Por ejemplo, mearsheimer, “Can China Rise Peacefully?"
11. Stephen G. Brooks and William C. Wohlforth, “The Rise and Fall of the Great Powers in the
Twenty-First Century: China’s Rise and the Fate of America’s Global Position,” International Secu-
rity, volumen. 40, No. 3 (Invierno 2015/16), páginas. 7–53, https://doi.org/10.1162/ISEC_a_00225; y miguel
Beckley, “The Power of Nations: Measuring What Matters,” Seguridad Internacional, volumen. 43, No. 2
(Caer 2018), https://doi.org/10.1162/isec_a_00328.
12. Barry Naughton and Kellee S. Tsai, editores., State Capitalism, Institutional Adaptation, y el
Chinese Miracle (Cambridge: Prensa de la Universidad de Cambridge, 2015).
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Seguridad Internacional 47:2 140
tions and hostilities between China and other states, how has economic inter-
dependence become the heart of the U.S.-China conºict? Others have observed
that economic interdependence can produce conºict and vulnerability.13 When
there is signiªcant asymmetric power among states, tensions may be mani-
fested in what Henry Farrell and Abraham Newman call “weaponized inter-
dependencia,” whereby states with political authority over critical hubs “use
global economic networks to achieve strategic aims.”14 Yet the rapidity and se-
verity with which economic interdependence became a source of global
contestation for China begs for explanation.
We argue that escalating tensions over economic interdependence with
China are best explained in terms of security dilemma dynamics triggered by
changes in China’s domestic political economy since the beginning of the
2010s. Other wealthy countries perceived these changes as a security threat
and took actions to counter the perceived threat. Security dilemma logic posits
that the means by which one state tries to increase its own security decreases
the security of other states.15 In traditional security dilemma analysis, ef-
forts by one state to increase its military capability increases insecurity in oth-
ers, especially when the ªrst state’s intentions about using the new capability
are neither clear nor credible.16 Paradoxically, entonces, one state’s efforts to en-
hance its own security will fail insofar as the responses by other states—arms
13. On economic sanctions and other strategies of economic statecraft, see David A. Baldwin, Eco-
nomic Statecraft (Princeton, NUEVA JERSEY.: Prensa de la Universidad de Princeton, 1985); Albert O. Hirschman, National
Power and the Structure of Foreign Trade, rev. ed. (berkeley: University of California Press, 1980); Mi-
chael Mastanduno, “Economics and Security in Statecraft and Scholarship,” International Organiza-
ción, volumen. 52, No. 4 (1998), páginas. 825–854, https://www.jstor.org/stable/2601359; and cf. David J.
Bulman, “The Economic Security Dilemma in US-China Relations,” Asian Perspective, volumen. 45, No. 1
(Invierno 2021), páginas. 49–73, http://doi.org/10.1353/apr.2021.0013.
14. Henry Farrell and Abraham L. Hombre nuevo, “Weaponized Interdependence: How Global Eco-
nomic Networks Shape State Coercion,” Seguridad Internacional, volumen. 44, No. 1 (Verano 2019),
páginas. 42–79, https://doi.org/10.1162/isec_a_00351. We draw from this work, but our analytical task
differs. Farrell and Newman examine how power is exercised by states that occupy privileged
“hubs” in global networks, but we analyze why interdependence became the primary site of inse-
curity between China and partners.
15. Much of the security dilemma literature relating to China has involved regional relations in
Asia Oriental. See Thomas J. Christensen, “Fostering Stability or Creating a Monster? The Rise of
China and U.S. Policy toward East Asia,” Seguridad Internacional, volumen. 31, No. 1 (Verano 2006),
páginas. 81–126, https://doi.org/10.1162/isec.2006.31.1.81; y Tomás J.. Christensen, “China, el
U.S.-Japan Alliance, and the Security Dilemma in East Asia,” Seguridad Internacional, volumen. 23, No. 4
(Primavera 1999), páginas. 49–80, https://doi.org/10.1162/isec.23.4.49.
16. Scholars debate whether a rival’s intentions can ever actually be known. See Sebastian Rosato,
Intentions in Great Power Politics: Uncertainty and the Roots of Conºict (nuevo refugio, Conexión.: Yale Uni-
versity Press, 2021); and Andrew H. Kydd, Trust and Mistrust in International Relations (Princeton,
NUEVA JERSEY.: Prensa de la Universidad de Princeton, 2007).
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El capitalismo de partido-Estado de China y la reacción global 141
buildups—actually heighten the ªrst state’s insecurity. The result is competi-
ción, an arms race spiral and, at worst, war.17 Drawing on this classic logic, nosotros
argue that the content of China’s domestic political economic practices, cómo
they have changed over time, and perceptions of the sources of those changes
have generated doubts about China’s intentions and fears about its capabilities
that contribute to security dilemmas.18 In making this argument, we offer three
contributions to the security dilemma concept and to understanding the U.S.-
China conºict. We show, ªrst, that when a regime with global signiªcance per-
ceives insecurity and acts to secure itself, international actors are more likely
either to interpret those domestic actions as threatening or to reevaluate that
country’s intentions. En otras palabras, we ªnd that domestic, nonmilitary poli-
cies and actions can trigger a security dilemma.
Segundo, we demonstrate how economic relations can cause insecurity and
security dilemmas. Aquí, we join Farrell and Newman and others in push-
ing scholars of international security to consider economic ties and globaliza-
ción, but we also insist that domestic economic practices have global security
implications, particularly in highly globalized states.19 Much analysis of China
in the international system has been dominated by assessments of China as a
“newly aggressive” power or “revisionist state” that presents a challenge to
the “rules-based international order.”20 Yet many of these works—both those
portraying China as newly aggressive and critiques of that interpretation—
focus on conventional realms of security studies, such as China’s territorial
17. Robert Jervis, Perception and Misperception in International Politics (Princeton, NUEVA JERSEY.: Princeton
Prensa universitaria, 1976); Robert Jervis, “Cooperation under the Security Dilemma,“Política mundial,
volumen. 30, No. 2 (1978), páginas. 167–214, http://doi.org/10.2307/2009958; and Charles L. Glaser, “The Se-
curity Dilemma Revisited,“Política mundial, volumen. 50, No. 1 (Octubre 1997), páginas. 171–201, https://
doi.org/10.1017/S0043887100014763.
18. Jervis, “Cooperation under the Security Dilemma”; and Glaser, “The Security Dilemma
Revisited.”
19. Farrell and Newman, “Weaponized Interdependence”; y Tomás J.. Wright, All Measures
Short of War: The Contest for the Twenty-First Century and the Future of American Power (nuevo refugio,
Conexión.: Prensa de la Universidad de Yale, 2017).
20. Adam Breuer and Alastair Iain Johnston, “Memes, Narratives, and the Emergent US-China
Security Dilemma,” Cambridge Review of International Affairs, volumen. 32, No. 4 (2019), páginas. 429–455,
https://doi.org/10.1080/09557571.2019.1622083. Broader debates about China’s grand strategy re-
garding the “global order” are beyond the scope of this article. On China’s approach to the liberal
international order, see Jessica Chen Weiss and Jeremy L. Wallace, “Domestic Politics, China’s
Rise, and the Future of the Liberal International Order,” International Organization, volumen. 75, No. 2
(2021), páginas. 635–664, https://doi.org/10.1017/S002081832000048X; Jessica Chen Weiss, “A World
Safe for Autocracy? China’s Rise and the Future of Global Politics,” Foreign Affairs, July/August
2019, https://www.foreignaffairs.com/articles/china/2019-06-11/world-safe-autocracy; and Rush
Doshi, The Long Game: China’s Grand Strategy to Replace American Order (Nueva York: Oxford Univer-
sity Press, 2021).
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Seguridad Internacional 47:2 142
disputes, maritime activities, and behavior in international institutions. Nuestro
contribution is to identify a set of changes since the end of the ªrst decade of
the 2000s in China’s domestic economic practices, including by its ªrms, eso
other governments interpret as evidence of enhanced capabilities or “greedy
state” behavior.21 This perception, Sucesivamente, has given rise to a security dilemma
with implications for the global liberal order that facilitated economic interde-
pendence in the ªrst place.
Tercero, we highlight the central role of ªrms, not just states, in security di-
lemma dynamics. As detailed below, China’s political economic changes
have been construed, sometimes accurately, as incorporating ªrms, no matter
their ownership, into China’s security resources and capabilities vis-à-vis
other states. Because of these blurred boundaries between the party-state and
Chinese ªrms, and the security relevance of data and dual-use technologies,
the actions of ªrms have security implications for states and can be the sites of
security competition and spiral dynamics.
China’s Domestic Anxieties and Actions
Following Mao Zedong’s death in 1976, economic reforms provided the basis
for China’s unprecedented growth. Although reforms led to privatization and
downsizing of the state-owned sector, generations of reform-era leaders con-
tinued to reiterate the importance of state guidance in debates about China’s
direction.22 By the mid-1990s, a Chinese version of “state capitalism” had
taken shape and was widely considered an exemplary form as practiced under
authoritarianism. Broadly speaking, “state capitalism” refers to mixed econo-
mies in which the state retains a dominant and relatively autonomous role
even amid markets and privatization. Classic state capitalist tools include
state ownership, subsidized credit, industrial policy, and appointment of man-
agerial actors. Contemporary observers of state capitalism interpret state inter-
ventions as being deployed to bolster geostrategic and/or economic
competition in globalized sectors.23
21. On “greedy” versus “status quo” states, see Glaser, “The Security Dilemma Revisited.”
22. Chinese government economists debated the relationship between the state and markets, par-
ticularly in the 1980s. Joseph Fewsmith, Dilemmas of Reform in China: Political Conºict and Economic
Debate (Armonk, N.Y.: Routledge, 1994); and Isabella M. Weber, How China Escaped Shock Therapy:
The Market Reform Debate (Nueva York: Routledge, 2021).
23. Ian Bremmer, The End of the Free Market: Who Wins the War between States and Corporations?
(Nueva York: Pingüino, 2010); and Joshua Kurlantzick, State Capitalism: How the Return of Statism Is
Transforming the World (Nueva York: prensa de la Universidad de Oxford, 2016).
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El capitalismo de partido-Estado de China y la reacción global 143
Since the ªrst decade of the 2000s, China’s state capitalism primarily aimed
to manage and enhance the efªciency of large state-owned enterprises (SOEs)
in sectors deemed crucial to China’s security at home and abroad (p.ej., energía,
telecommunications, and ªnance). Reformers also urged large SOEs to create
wealth for the party-state, often through market consolidation.24 During this
período, the nature of state capitalism in China was broadly consistent with its
usage in comparative political economy, which cast state capitalism as moti-
vated by developmental or redistributive logics. A strong state was needed to
overcome “economic backwardness,”25 and to manage industrial growth and
global competition.26
Mientras tanto, the CCP’s core interests continued to center on safeguarding the
survival of a CCP-led regime.27 The PRC’s conceptualization of national secu-
rity has always encompassed “the security of the Chinese Communist Party
and its ability to govern Chinese society,”28 including through “stability main-
tenance.”29 During the Hu Jintao era, sin embargo, domestic and international
events contributed to a changed approach to regime security that proactively
sought to prevent risks rather than to simply maintain stability.30 Economic
governance also shifted to focus on threat prevention. A combination of per-
ceived internal and external threats spurred a reconªguration of its political
economy to a model that we term party-state capitalism. We discuss the CCP’s
turn toward a more proactive strategy to ensure regime survival, ªrst by ad-
dressing precipitating factors for such a turn and then by identifying domestic
manifestations of the new model.
24. Sarah Eaton, The Advance of the State in Contemporary China: State-Market Relations in the Reform
Era (Cambridge: Prensa de la Universidad de Cambridge, 2016); and Barry Naughton and Kellee S. Tsai, editores.,
State Capitalism, Institutional Adaptation, and the Chinese Miracle (Cambridge: Cambridge University
Prensa, 2015).
25. Alexander Gerschenkron, Economic Backwardness in Historical Perspective (Cambridge, Masa.:
Prensa de la Universidad de Harvard, 1962).
26. Alice H. Amsden, The Rise of “the Rest”: Challenges to the West from Late-Industrializing Economies
(Nueva York: prensa de la Universidad de Oxford, 2001).
27. Avery Goldstein, “China’s Grand Strategy under Xi Jinping: Reassurance, Reform, and Resis-
tance,” Seguridad Internacional, volumen. 45, No. 1 (Verano 2020), páginas. 164–201, https://doi.org/10.1162/
isec_a_00383; and Susan L. Shirk, Porcelana: Fragile Superpower (Nueva York: prensa de la Universidad de Oxford,
2007).
28. Sheena Chestnut Greitens, “Internal Security and Grand Strategy: China’s Approach to Na-
tional Security under Xi Jinping,” statement before the U.S.-China Economic and Security Review
Commission, Hearing on U.S.-China Relations at the Chinese Communist Party’s Centennial,
Enero 28, 2021, pag. 1, http://www.sheenagreitens.com/uploads/1/2/1/1/121115641/chestnut
_greitens_-_natl_security_under_xi_jinping__uscc2021_.pdf.
29. Ibídem, pag. 5.
30. Sheena Chestnut Greitens, Myunghee Lee, and Emir Yazici, “Counterterrorism and Preventive
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Seguridad Internacional 47:2 144
generalized threat perception
Ample literature on Chinese politics has elucidated how the CCP’s ªxation on
domestic stability has increased steadily since around 2008. Especially follow-
ing large-scale protests in Tibet (2008) and Xinjiang (2009), concerns about do-
mestic “terrorism” engendered repressive party-state responses.31 Upon
assuming PRC leadership following the global ªnancial crisis, Xi Jinping di-
rected the party’s internal attention on regime decay and collapse elsewhere to
avoid such fates in China. The Soviet Union’s collapse ªgured prominently in
Xi’s public speeches and instructions to rank-and-ªle ofªcials. Mass mobiliza-
tion through “color revolutions” in Eurasia during the early twenty-ªrst cen-
tury and the Arab Spring in 2010–2011 renewed the party’s anxiety about
inºuence.32
popular demands for regime change with possible external
Heightened alarm over perceived internal threats to the CCP’s political power
led its leadership to strengthen the regime’s coercive and surveillance ca-
pacity.33 Although Xi’s “China Dream” carries a triumphalist sentiment, nosotros
interpret this nationalist rhetoric as directed primarily at domestic audi-
ences and addressing the party-state’s underlying insecurity that pre-dated
Xi’s rise.
Even as debate continues about whether the CCP’s grand strategy toward
the global system has changed under Xi, consensus exists that China’s own
perception of its security environment has shifted.34 Following the global
ªnancial crisis and fearing technological inferiority and dependence, the CCP
became preoccupied with securing the resources needed for the country’s next
stage of growth. China’s approach to handling perceived domestic and exter-
nal threats to its economic stability was elevated to the realm of national secu-
rity and regime survival, cual, we argue, transformed its model of domestic
political economy.
economic insecurity
Various economic developments contributed to changes in China’s model, en-
cluding slower growth and the end of required World Trade Organization
Repression: China’s Changing Strategy in Xinjiang,” Seguridad Internacional, volumen. 44, No. 3 (Invierno
2019/20), páginas. 9–47, https://doi.org/10.1162/isec_a_00368.
31. Ibídem. See also Yuhua Wang and Carl Minzner, “The Rise of the Chinese Security State,” China
Quarterly, volumen. 222 (2015), páginas. 339–359, https://doi.org/10.1017/S0305741015000430.
32. Xi Chen, “China at the Tipping Point? The Rising Cost of Stability,” Journal of Democracy,
volumen. 24, No. 1 (2013), páginas. 57–64, https://doi.org/10.1353/jod.2013.0003.
33. Jingyang Huang and Kellee S. Tsai, “Securing Authoritarian Capitalism in the Digital Age: El
Political Economy of Surveillance in China,” China Journal, volumen. 88, No. 1 (Julio 2022), páginas. 2–28.
34. Avery Goldstein observes that a “less forgiving security environment” inºuenced Xi’s efforts
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El capitalismo de partido-Estado de China y la reacción global 145
(WTO) liberalization plans in 2005–2006.35 Yet it was the global ªnancial crisis
and its aftermath that sparked an acute sense of insecurity, as the sudden drop
in external demand highlighted China’s dependence on exports.36 The Hu
Jintao-Wen Jiabao administration (2002–2012) responded with a massive stim-
ulus package. While this investment boosted gross domestic product in several
localities, rapid rise in public and corporate debt deepened concerns about
ªnancial instability and the sustainability of China’s existing model. Domes-
tically, many economists and policymakers concluded that the country should
reduce its vulnerability to external markets. As Premier Wen Jiabao observed
in March 2010:
There is insufªcient internal impetus driving economic growth; our independ-
ent innovation capability is not strong; there is still considerable excess pro-
duction capacity in some industries and it is becoming more difªcult to
restructure them; while the pressure on employment is constantly growing
en general, there is a structural shortage of labor; the foundation for keeping agri-
cultural production and farmers’ incomes growing steadily is weak; latent
risk in the banking and public ªnance sectors are increasing; and major prob-
lems in the areas of healthcare, education, housing, income distribution and
public administration urgently require solutions. . . . We urgently need to
transform the pattern of economic development . . . onto the track of endoge-
nous growth driven by innovation.37
Upon assuming ofªce in 2012, Xi cautioned that China’s new normal required
reorientation of its economic model. Lower growth should be expected, y para
drive development the country should reduce reliance on exports by empha-
sizing domestic consumption.38 Under Xi’s leadership, the party-state has spec-
iªed economic stability as a core component of national security and has used
the state’s repressive apparatus (es decir., anti-corruption prosecutions, detentions
to reform the global system and resist challenges to China’s core interests. Goldstein, “China’s
Grand Strategy.” See also Greitens, “Internal Security and Grand Strategy.”
35. Barry Naughton, “China’s International Political Economy—the Changing Economic Con-
texto,” in Ka Zeng, ed., Handbook on the International Political Economy of China (Cheltenham, Reino Unido: Ed-
ward Elgar, 2019), páginas. 20–41; and Yeling Tan, Disaggregating China, Cª: State Strategies in the Liberal
Economic Order (Ítaca, N.Y.: Prensa de la Universidad de Cornell, 2021).
36. Nicholas R. Lardy, The State Strikes Back: The End of Economic Reform in China? (Washington,
CORRIENTE CONTINUA.: Peterson Institute for International Economics, 2019).
37. Wen Jiabao, “Wen Jiabao, 2010 Report on the Work of the Government, Marzo 5, 2010,” deliv-
ered at the 3rd Session of the 11th National People’s Congress (Los Angeles: USC US-China Insti-
tute, University of Southern California, Marzo 4, 2010), https://china.usc.edu/wen-jiabao-2010-
report-work-government-march-5-2010.
38. “Full Text of Xi Jinping’s Report at 19th CPC National Congress,” China Daily, Novem-
ber 4, 2017, http://www.chinadaily.com.cn/china/19thcpcnationalcongress/2017-11/04/content
_34115212.htm.
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Seguridad Internacional 47:2 146
of state and private actors, and ªrm nationalizations), rather than regulatory
and macroeconomic tools alone, to address ªnancial risks and malfeasance.39
Compounding domestic sources of economic insecurity, China’s leaders be-
came increasingly apprehensive about dependence on Western technology.
Over 2013–2014, Edward Snowden’s revelations that the United States had de-
ployed a cyberattack against Iran and that the National Security Agency had
breached Huawei’s servers to access proprietary corporate information
alarmed China’s government, prompting it to stablish the Central Cyberspace
Affairs Commission in February 2014. The commission described the Snowden
incident as “a wake-up call for all countries in the world that without
cybersecurity, there can be no national security.”40 A Chinese Academy of
Engineering academician echoes the dangers of relying on foreign equipment:
“Despite the cost advantages of domestic equipment, cerca de 80% of our coun-
try’s backbone network equipment is Cisco products, which obviously pro-
vides convenience for implementation of ‘prism gate’ monitoring programs.”41
Además, a group of executives warned China’s leaders that reliance on for-
eign mainframe computers in ªnance, telecommunications, energía, and gov-
ernment affairs put national security at risk.42 In March 2014, “protecting
cybersecurity” appeared in the Premier’s Party Congress Work Report, y un
suite of new laws ensued to expand party-state control over cybersecurity.43
The damaging effects of the global ªnancial crisis, combined with social in-
stability and widespread corruption, called for policy responses. Intellectuals
associated with the “New Left” sought solutions to societal ills associated with
markets and privatization, especially inequality and bourgeois decadence.44
39. Jeremy Wallace, “The New Normal: A Neopolitical Turn in China’s Reform Era,” in Karrie J.
Koesel, Valerie J. Bunce, and Jessica Chen Weiss, editores., Citizens and the State in Authoritarian Regimes:
Comparing China and Russia (Nueva York: prensa de la Universidad de Oxford, 2020), páginas. 31–58; and Meg
Rithmire and Hao Chen, “The Emergence of Maªa-Like Business Systems in China,” China Quar-
terly, volumen. 248, No. 1 (December 2021), páginas. 1037–1058, https://doi.org/10.1017/S0305741021000576.
40. “Xuezhe jiedu: Zhongguo chutai wangluo shencha zhidu sida jiaodian” [Scholars explain:
Four main emphases of China’s emerging cyber security system], CCP News Network, Puede 23,
2014, http://theory.people.com.cn/n/2014/0523/c40531-25054345.html.
41. Ibídem.
42. “Weihu wangluo anquan shangsheng dao guojia zhanlue de yiwei” [Maintaining cyber-
security has risen to the signiªcance of national security], National People’s Congress of the Peo-
ple’s Republic of China, Marzo 9, 2014, http://www.npc.gov.cn/npc/xinwen/2014-03/09/content
_1846981.htm.
43. Li Keqiang, “Zhengfu gongzuo baogao” [Government work report], State Council of the Peo-
ple’s Republic of China, http://www.gov.cn/guowuyuan/2014-03/14/content_2638989.htm.
Party Congress Work Reports are critical documents that set the tone for the party-state’s work
every ªve years.
44. He Li, “Debating China’s Economic Reform: New Leftists vs. Liberals,” Journal of Chinese Polit-
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El capitalismo de partido-Estado de China y la reacción global 147
Although pro-reform observers had hoped that Xi’s seeming embrace of
greater marketization would further curb state intervention,45 the CCP has in-
stead extended its authority and reach—organizationally, ªnancially, y
politically—into China’s domestic and foreign economic relations. Prior devel-
opmental goals have increasingly been overshadowed by initiatives that place
politics in command and state capitalism in the service of the regime’s political
survival. Broadly, the party is seen to be the solution to all potential threats. En
the words of Joseph Fewsmith, “Xi has asserted the primacy of the party,
inserting ‘the party controls everything’ into the party constitution for the
ªrst time.”46
legal and developmental securitization
The party’s expanded reach and profound sense of insecurity found their way
into a set of laws and a development strategy of “military-civil fusion” that
reºect increased “securitization”: economic issues have become national secu-
rity issues in the eyes of China’s party-state. Other states, Sucesivamente, cada vez más
view China’s economic capabilities as potentially threatening.47 In combina-
ción, these new laws and policy priorities have elevated economic activities to
the level of national security. Más destacado, recent laws compel “ªrms, individ-
uals and other organizations” to provide information or support to the govern-
ment if that information is deemed to have security implications. El 2017
National Intelligence Law explicitly states that “an organization or citizen
shall support, assist in and cooperate in national intelligence work in accor-
dance with the law and keep conªdential the national intelligence work that
ical Science, volumen. 15 (2010), páginas. 1–23, https://doi.org/10.1007/s11366-009-9092-4. Efforts to reduce
the harms of Chinese capitalism underlay the Chongqing Model of Bo Xilai. See Philip C. C.
Huang, “Chongqing: Equitable Development Driven by a ‘Third Hand,’” Modern China, volumen. 37,
No. 6 (2011), páginas. 569–622, https://doi.org/10.2307/23053340.
45. Xi called for further liberalization and pledged to “let markets play the decisive role” at the
3rd Plenum of the 18th Party Congress in November 2013. “Central Decisions on Several Major Is-
sues Regarding Comprehensively Deepening Reform,” Central Committee of the Communist
Party of China, Noviembre 12, 2013, Central People’s Government of People’s Republic of China,
http://www.gov.cn/jrzg/2013-11/15/content_2528179.htm.
46. Joseph Fewsmith, “The 19th Party Congress: Ringing in Xi Jinping’s New Age,” China Leader-
ship Monitor, No. 55 (Invierno 2018), pag. 18, https://www.hoover.org/research/19th-party-congress-
ringing-xi-jinpings-new-age.
47. People’s Republic of China (PRC) government documents increasingly cite “economic security”
as a key feature of “comprehensive national security.” Helena Legarda, “China’s New International
Paradigm: Security First,” in Nis Grünberg and Claudia Wessling, editores., The CCP’s Next Century:
Expanding Economic Control, Digital Governance, and National Security (Berlina: Merics, Junio 15, 2021),
https://merics.org/sites/default/ªles/2021-07/MERICSPapersOnChinaCCP100_3_1.pdf.
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Seguridad Internacional 47:2 148
it or he knows” (Article 7).48 The intelligence law was passed following a
revamp of China’s legal system related to security, which included the sweep-
En g 2015 National Security Law that speciªed economic security (Article 19)
and ªnancial stability (Article 20) as key pillars of “national security” requir-
ing state protection.49 Table 1 lists the main national security laws that obli-
gate companies.
China adopted a new military-civil fusion strategy to accompany the
laws mandating ªrm cooperation with intelligence and security operations.
Issued by the CCP, the PRC State Council, and the party’s Central Military
the 13th Five-Year Special Plan for Science and
Commission in 2015,
Technology Military-Civil Fusion Development called for “integrated develop-
ment of economic construction and national defense construction.”50 The new
strategy aimed to build a modern and efªcient military by involving the pri-
vate sector in research and development (R&D), manufacturing, and logistics
to beneªt the wider economy through commercialization of military technol-
ogy.51 Implementing this holistic developmental strategy would require break-
ing down legal and institutional barriers between commercial and military
technology to strengthen R&D coordination among military research insti-
tutes, state-owned defense companies, universidades, and the private sector.
As a complement to military-civil fusion, the “Made in China 2025”
(MiC2025) initiative was introduced in 2015 to upgrade the country’s indus-
trial capacity and promote “indigenous innovation” (zizhu chuangxin) in core
tecnologías, including artiªcial intelligence, 5GRAMO, semiconductors, biotech,
aerospace, and electric vehicles.52 An explicit goal of this industrial policy was
to reduce perceived risks associated with China’s reliance on foreign technol-
48. Standing Committee of the National People’s Congress, “National Intelligence Law of the Peo-
ple’s Republic of China (2018 Amendment),” Order No. 6 of the President of the People’s Republic
of China, Abril 27, 2018, http://en.pkulaw.cn/display.aspx?cgid(cid:2)313975&lib(cid:2)law. El 2016
Cybersecurity Law similarly required that data be stored within China and authorized authorities
to spot-check records to ensure compliance. Standing Committee of the National People’s
Congreso, “2016 Cybersecurity Law,” China Law Translate, Noviembre 7, 2016, https://www
.chinalawtranslate.com/en/2016-cybersecurity-law/.
49. Standing Committee of the National People’s Congress, “National Security Law of the PRC,"
Julio 1, 2015, http://www.gov.cn/zhengce/2015-07/01/content_2893902.htm.
50. Ibídem.
51. “Zhonggong zhongyang, guowuyuan, zhongyang junwei yinfa ‘guanyu jingji jianshe he
guofang jianshe ronghe fazhan de yijian’” [Party Central Committee, State Council, and Central
Military Commission issue “Opinions on Integrated Development of Economic Construction and
National Defense Construction”], Xinhua, Julio 21, 2018, http://www.xinhuanet.com/politics/
2016-07/21/c_1119259282.htm.
52. Ling Chen, Manipulating Globalization: The Inºuence of Bureaucrats on Business in China (estan-
ford, California: Prensa de la Universidad de Stanford, 2018).
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El capitalismo de partido-Estado de China y la reacción global 149
ogy by 2025. MiC2025’s nationalistic discourse about “catching up with” and
“surpassing” (ganchao) the West in technological capabilities and reducing de-
pendence on global supply chains would be met with external alarm and criti-
cism, especially when target sectors were potentially dual military-civilian use.
But even before this ambitious industrial policy provoked global security con-
cerns, it reºected China’s own sense of insecurity vis-à-vis its domestic econ-
omy and position in global supply chains. MiC2025 was conceptualized in
the aftermath of the global ªnancial crisis and the Snowden revelations. En el
spirit of “supporting national economic and social development and maintain-
ing national security,” in June 2014 the PRC State Council released a set of
guidelines on integrated circuits, calling them a “strategic technology.”53
The guidelines stressed China’s “huge gap” with leading countries and em-
phasized that it was “difªcult to achieve national industry core competency
and to enforce information security.”54
One channel that China identiªed for upgrading domestic technological ca-
pabilities was to establish multiple “professionally managed” private equity
funds to invest on behalf of the state. En 2013, the Ministry of Industry and
Information Technology piloted the model by selecting two private ªrms to be
general partners and fund managers.55 This model was extended to MiC2025
more broadly in 2015. Industrial policy and even innovation policy were not
nuevo, but obfuscation of state and private boundaries was, as was the creation
of legal and political foundations for the party-state’s emboldened and more
security-focused role. State security goals permeated all kinds of organiza-
ciones, and this hallmark of party-state capitalism was interpreted abroad as
China’s offensive drive to dominate and weaponize important supply chains.
Party-State Capitalism
Applying a security logic (es decir., securitization) to state economic intervention
has generated a pronounced change in China’s model of political economy
that we call party-state capitalism. Party-state capitalism contains new fea-
53. “Guidelines for the Promotion of the Development of the National Integrated Circuit Industry”
(Beijing: State Council of the People’s Republic of China, 2014), http://www.lawinfochina.com/
display.aspx?id(cid:2)26681&lib(cid:2)law.
54. Ibídem.
55. “Guanyu Beijingshi jicheng dianlu chanye fazhan ququan touzi jijin linxuan guanli gongsi
de gonggao” [Selection of management companies for Beijing Integrated Circuit Industry Devel-
opment Equity Investment Fund announced] (Beijing: Ministry of Industry and Information Tech-
nología, December 18, 2013), http://www.miit.gov.cn/n1146285/n1146352/n3054355/n3057643/
n3057649/c3625593/content.html.
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Seguridad Internacional 47:2 150
Mesa 1. Laws Ascribing National Security Roles to Chinese Firms
Nombre
Año
Notable clauses
Counter-
Espionage
Law
2014
Citizens and organizations shall facilitate and provide other
assistance to counter-espionage efforts (Article 4); state protects
and rewards those who make major contributions to this effort
(Article 7).
National
Security Law
2015
Establishes “economic security” and “ªnancial stability” as
pillars of national security (Artículos 19, 20). Enterprises, entre
other organizations, have responsibility and obligation to
preserve national security (Article 11), and shall cooperate as
required by national security efforts (Article 78).
Counter-
Terrorism
Law
2015
Telecommunications operators and Internet service providers
shall provide technical interfaces, decryption, and other
technical support assistance to state organs conducting
prevention and investigation of terrorist activities (Article 18).
Cybersecurity
Law
2016
Network operators shall protect cybersecurity, accept
supervision from the government and public, and bear social
responsibility (Article 9). Network operators shall provide
technical support and assistance to state organs related to
national security (Article 28).
National
Inteligencia
Law
National
Security Law
of Hong Kong
2017
Organizations and citizens shall support and cooperate with the
state intelligence work (Artículos 7, 14).
2020
Criminalizes separatism, subversion, terrorism, and collusion
with foreign countries or “external elements” deemed to
endanger national security. Applies to “any institution,
organization or individual” in Hong Kong (Article 6) or outside
of China (Article 29).
tures and emphases undergirded by a focus on maintaining the party’s mo-
nopoly on political power.56 Although these novel features build on structural
elements of China’s state and economy, they have become more politically im-
portant, with profound impacts on ªrms. Más destacado, these trends have
muddied the conventional distinction between the state and ªrms, y se-
tween state-owned and private capital. Confusion and suspicion about these
56. Robert Gilpin’s classic statement on the international politics of investment identiªes three
dominant “ideologies” of political economy—liberalism, Marxism, and mercantilism. A pesar de
party-state capitalism contains elements of all three, it is closest to mercantilism, insofar as both
concepts highlight national security and the ideology of economic nationalism. But we show that
the tools of party-state capitalism bore much deeper into the domestic economic system than envi-
sioned in Gilpin’s mercantilist ideology. Robert G. Gilpin, The Political Economy of International
Relaciones (Princeton, NUEVA JERSEY.: Prensa de la Universidad de Princeton, 1987).
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El capitalismo de partido-Estado de China y la reacción global 151
Mesa 1. continued
Nombre
Año
Notable clauses
Anti–Foreign
Sanctions
Law
2021
Data Security
Law
2021
Organizations/entities/individuals must follow these rules: ellos
may be subject to countermeasures if they are involved with
“discriminatory restrictive measures against Chinese citizens
and organizations” (Article 4); they must implement anti–foreign
sanction measures (Article 11); they must not aid in
implementing sanctions imposed by other countries (Article 12).
Expects departments, industry organizations, enterprises, y
individuals to protect data security (Article 9); prohibits
domestic entities from providing critical data to foreign
countries (Article 31).
FUENTES: Standing Committee of the National People’s Congress, “Counter-Espionage Law
of the PRC,” China Law Translate, Noviembre 1, 2014, https://www.chinalawtranslate.com/
en/anti-espionage/; Standing Committee of the National People’s Congress, “Counter-
Terrorism Law of the People’s Republic of China,” China Law Translate, December 27,
2015, amended April 27, 2018, https://www.chinalawtranslate.com/en/counter-terrorism-
law-2015/; Standing Committee of the National People’s Congress, “2016 Cybersecurity
Law,” China Law Translate, Noviembre 7, 2016, https://www.chinalawtranslate.com/en/
2016-cybersecurity-law/; Murray Scot Tanner, “Beijing’s New National Intelligence Law:
From Defense to Offense,” Lawfare, Julio 20, 2017, https://www.lawfareblog.com/beijings-
new-national-intelligence-law-defense-offense; National People’s Congress,
“Anti–
Foreign Sanctions Law of the PRC,” June 10, 2021, http://www.npc.gov.cn/npc/c30834/
202106/d4a714d5813c4ad2ac54a 5f0f78 a5270.shtml; “Data Security Law of the PRC,"
Anquan neican [Internal security documents], Junio 12, 2021.
blurred lines have fueled intense backlash against Chinese ªrms operating
abroad, thereby deepening China’s sense of insecurity. Abajo, we show how
China’s party-state capitalism differs from state capitalism in two main ways:
(1) it expands the party-state’s presence in ªrms through new corporate gover-
nance practices and ªnancial instruments; y (2) it demands political fealty
from ªrms and their connected individuals.
corporate governance and the party-state
To manage China’s economy, party-state capitalism uses not only the classic
state capitalist tools of state ownership and market interventions but also new
modes of control designed to embed the party-state more deeply into the
country’s ªnancial and economic system. The most direct channel for increas-
ing party control of ªrms is through building party cells inside enterprises,
including private and even foreign ªrms. The presence of party cells in pri-
vate organizations is not new—even early CCP constitutions speciªed that any
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Seguridad Internacional 47:2 152
unit with more than three party members should have a party cell.57 In prac-
tice, sin embargo, this rule was lightly enforced.58 Xi has upgraded the role of
party cells and prioritized party building in ªrms, consistent with his
19th Party Congress declaration in 2017 that the “Party exercises leadership
over all areas in every part of the country.”59 Private ªrms and joint ventures
have rapidly established their own party organizations;60 1.88 million non-
state ªrms—73 percent—had established party cells by 2018.61 Firm-level
party branch construction within private companies has led owners to express
anxiety that these cells will intervene in ªrm management.62
Party-state inºuence in China’s economy has also deepened through the
deployment of new ªnancial instruments, especially through investment of
state-controlled capital well beyond state-owned ªrms. “Financialization”
of the state’s role in managing SOEs is well-documented.63 The role of state
capital outside majority ownership is a less understood development, pero
appears to be politically consequential.64 Most important has been the estab-
57. Yue Hou, “The Private Sector: Challenges and Opportunities During Xi’s Second Term,” China
Leadership Monitor, Marzo 1, 2019, https://www.prcleader.org/hou.
58. Margaret M. Pearson, “Party and Politics in Joint Ventures,” China Business Review, volumen. 17,
No. 6 (1990), páginas. 38–40; and Xiaojun Yan and Jie Huang, “Navigating Unknown Waters: El
Chinese Communist Party’s New Presence in the Private Sector,” China Review, volumen. 17, No. 2 (Junio
2017), páginas. 37–63, https://www.jstor.org/stable/44440170.
59. Xi Jinping, “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Re-
spects and Strive for the Great Success of Socialism with Chinese Characteristics for a New Era,"
speech delivered at the 19th National Congress of the CCP, Xinhua, Octubre 18, 2017, http://
www.xinhuanet.com/english/download/Xi_Jinping’s_report_at_19th_CPC_National_Congress
.pdf.
60. Wendy Leutert, “Firm Control: Governing the State-Owned Economy under Xi Jinping,” China
Perspectives, Vols. 1–2 (2018), páginas. 27–36, https://doi.org/10.4000/chinaperspectives.7605; and Yan
y huang, “Navigating Unknown Waters.”
61. Organization Department of the Central Committee of the Communist Party of China, “2017
nian zhongguo gongchandang dangnei tongji” [2017 Statistical Bulletin of the CCP], Communist
Party Member Network, Junio 30, 2018, http://news.12371.cn/2018/06/30/ARTI153034043289
8663.shtml. Note that although we have used the term “private” to refer to ªrms outside the state
sector, in Chinese ofªcial terminology, “non-state” (fei guoyou) includes both private ªrms and
Sino-foreign joint ventures. We use “non-state” only when referencing Chinese ofªcial statistics
and statements.
62. Hou, “The Private Sector”; and cf. Daniel Koss, “Party-Building as Institutional Bricolage: Como-
serting Authority at the Business Frontier,” China Quarterly, volumen. 248, No. S1 (2021), páginas. 222–243,
https://doi.org/10.1017/S0305741021000692.
63. Barry Naughton, “Financialisation of the State Sector in China,” in Yongnian Zheng and Sarah
Yueting Tong, editores., China’s Economic Modernisation and Structural Changes: Essays in Honour of John
Wong (Singapur: World Scientiªc, 2019), páginas. 167–186; and Yingyao Wang, “The Rise of the
‘Shareholding State’: Financialization of Economic Management in China,” Socio-Economic Review,
volumen. 13, No. 3 (Julio 2015), páginas. 603–625, https://doi.org/10.1093/ser/mwv016.
64. Hao Chen and Meg Rithmire, “The Rise of the Investor State: State Capital in the Chinese
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El capitalismo de partido-Estado de China y la reacción global 153
lishment of “state-owned capital investment companies” that invest in pri-
vate enterprises in strategic industries.65 These shareholding ªrms typically
purchase small minority stakes (generally less than 3 por ciento) in a listed pri-
vate ªrm.
This new state-directed ªnancial instrument took on unforeseen importance
during the stock market crisis of summer 2015. In response to dramatic stock
sell-offs that erased gains of the prior year, the China Securities Regulatory
Commission convened a national team of state shareholding funds to purchase
encima 1.3 trillion renminbi of stocks on the Shenzhen and Shanghai exchanges.
These funds eventually came to hold shares in half of all listed ªrms.66
This broad ªnancial intervention reºected the party’s narrative about politi-
cal control—its purpose was to manage risk and maintain economic stability
rather than to allocate capital toward productivity, efªciency, and other eco-
nomic ends. The CCP has also introduced “special management shares” to
monitor media and technology companies, given their strategic and political
importance. Special management shares are a class of equity with more
weighted voting rights or special governance power per share.67 The ªrst use
of this system occurred in 2016 when the People’s Daily acquired 1 por ciento de un
Beijing-based Internet company and named a “special director” to the board
who had veto power over content.68
Another new policy instrument related to state shareholding is the promo-
tion of “mixed ownership,” deªned as “crossholding by, and mutual fusion
among state-owned capital, collective capital, and non-public capital.”69
Economy,” Studies in Comparative and International Development, volumen. 55 (2020), páginas. 257–277, https://
doi.org/10.1007/s12116-020-09308-3.
65. PRC State Council, “Zhonggong zhongyang guanyu quanmian shenhua gaige ruogan
zhongda wenti de jueding” [CCP Central Committee decision on several major issues of deepen-
ing reforms], Noviembre 15, 2013, http://www.gov.cn/jrzg/2013-11/15/content_2528179.htm.
66. Chen Li, Huanhuan Zheng, and Yunbo Liu, “The Hybrid Regulatory Regime in Turbulent
Times: The Role of the State in China’s Stock Market Crisis in 2015–2016,” Regulation & Gobernancia,
volumen. 16, No. 2 (Abril 2022), https://doi.org/10.1111/rego.12340.
67. Qin Fang and Yimin Wang, “Zhengce yanbian yu yuqi lujing: Chuban chuanmeiye teshu
guanli gu zhidu tantao” [Policy evolvement and expected path: Discussion on China’s “special
management shares” in publishing industry], Science-Technology & Publication, No. 8 (2017), páginas. 14–
18.
68. Quanzhong Guo, “Teshu guanli gu ruhe luodi” [How to implement “special management
shares” in reality], Zhongguo chuban chuanmei shangbao [China Publishing and Media Journal],
Octubre 27, 2017, http://www.sohu.com/a/200512650_481352.
69. CCP, “Decision of the Central Committee of the Communist Party of China on Some Major Is-
sues Concerning Comprehensively Deepening the Reform,” China Internet Information Center, Janu-
ary 16, 2014, http://www.china.org.cn/china/third_plenary_session/2014-01/16/content_312126
02.htm. The concept of “mixed ownership” was ºoated as early as 1999. The 14th Five-Year Plan
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Seguridad Internacional 47:2 154
Mixed-ownership enterprises now dominate the landscape of publicly traded
companies. By March 2020, 41.6 percent of SOE group holding companies
y 62.7 percent of their subsidiaries were classiªed as “mixed ownership”
(es decir., they have private shareholders).70
political fealty
The second key manifestation of party-state capitalism is expectation of politi-
cal fealty by ªrms and their connected individuals. The CCP has recently tar-
geted several high-proªle private sector capitalists.71 In 2020, real estate
magnate Ren Zhiqiang was sentenced to eighteen years in prison for “corrup-
tion” after criticizing China’s handling of COVID-19 and calling Xi Jinping “a
clown.”72 Even Alibaba Group’s founder and Ant Group (formerly known
as Ant Financial) Chairman Jack Ma (Ma Yun), who once seemed irreproach-
able as an e-commerce pioneer and acknowledged CCP member, has faced
problema. Ant Group’s initial public offering was dramatically halted just days
before its launch, in part reºecting Xi’s displeasure with Ma’s publicized cri-
tique of securities regulators for holding outmoded views—which he said rep-
resented a “pawnshop mentality”—of bank regulation.73
guidance released in 2020 reiterated the priority of mixed ownership reforms. Zhong Nan, “Re-
forms among SOEs a Priority during 14th Five-Year Plan,” China Daily, December 4, 2020, http://
english.www.gov.cn/statecouncil/ministries/202012/04/content_WS5fc98a94c6d0f725769414f2
.html.
70. Asia Society Policy Institute and Rhodium Group, “State-Owned Enterprise,” China Dash-
board, Verano 2020, https://chinadashboard.asiasociety.org/summer-2020/page/state-owned-
empresa.
71. The CCP seems to have scrutinized the political loyalty of several wealthy capitalists, incluir-
ing those noted in Raymond Zhong and Alexandra Stevenson, “Jack Ma Shows Why China’s Ty-
coons Keep Quiet,” New York Times, Abril 22, 2021, https://www.nytimes.com/2021/04/22/
technology/jack-ma-alibaba-tycoons.html; and Raymond Zhong, “As China Scrutinizes Its Entre-
preneurs, a Power Couple Cashes Out,” New York Times, Junio 17, 2021, https://www.nytimes
.com/2021/06/17/business/soho-china-blackstone-sale.html.
72. Chris Buckley, “China’s ‘Big Cannon’ Blasted Xi. Now He’s Been Jailed for 18 Años,” New
York Times, Septiembre 22, 2020, https://www.nytimes.com/2020/09/22/world/asia/china-ren-
zhiqiang-tycoon.html.
73. Raymond Zhong, “In Halting Ant’s I.P.O., China Sends a Warning to Business,” New York
Times, Noviembre 6, 2020, https://www.nytimes.com/2020/11/06/technology/china-ant-group-
ipo.html. A translation of Ma’s speech is at Kevin Xu, “Jack Ma’s Bund Finance Summit Speech,"
Interconnected, Noviembre 9, 2020, https://interconnected.blog/jack-ma-bund-ªnance-summit-
speech/. Ant Group and other e-commerce giants were also under scrutiny by regulators
for anticompetitive business practices and for creating ªnancial risk, trends that are not unique
to China. See Angela Huyue Zhang, Chinese Antitrust Exceptionalism (Oxford: Oxford Univer-
sity Press, 2020). A NOSOTROS. technology companies face similar questions about anticompetitive
practicas. See Subcommittee on Antitrust, Commercial, and Administrative Law of the Commit-
tee on the Judiciary, Investigation of Competition in Digital Markets, 116th Cong., 2nd sess. (2020),
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El capitalismo de partido-Estado de China y la reacción global 155
The party’s demands that corporations conform to its ideology has extended
to multinational ªrms operating in China or otherwise subject to its market
fuerza. While governments have the authority to regulate foreign businesses
within their borders, the CCP has also punished ªrms for perceived infractions
and spurred nationalist sentiment among Chinese consumers. Mientras tanto, a
growing number of major brands and organizations have been pressured to
express contrition for missteps, primarily relating to how Hong Kong, Taiwán,
and Tibet are portrayed in their advertisements, redes sociales, and on their
websites,74 or for critiquing human rights issues in Xinjiang. Mesa 2 proporciona
a list of multinationals that have been pressured to apologize for their “politi-
cal errors.”
Businesses with signiªcant stakes in the China market have also changed
their discourse and behavior because of either direct pressure or self-censor-
barco. Cathay Paciªc Airlines, Por ejemplo, suspended staff who participated in
or expressed social media support for the protests in Hong Kong against a pro-
posed extradition bill with China in 2019—its CEO resigned soon thereafter.75
When China introduced a National Security Law for Hong Kong the following
año (ver tabla 1), before the law’s text was even released the party’s United
Front Work Department had nearly all the territory’s tycoons and interna-
tional business leaders sign a statement supporting the law.76 Under party-
state capitalism, both domestic and foreign businesses must adhere to China’s
political correctness.
Backlash against Chinese Firms: Security Competition Realized
Evolving perceptions of China’s leaders led to the securitization of China’s
economy and the accompanying emergence of party-state capitalism. Estos
changes create great confusion and fear overseas about the nature of China’s
political economy, and particularly about the party’s expanded presence in
https://judiciary.house.gov/uploadedªles/competition_in_digital_markets.pdf?utm_campaign
(cid:2)4493-519.
74. Lucas Niewenhuis, “All the International Brands That Have Apologized to China,” SupChina,
Octubre 25, 2019, https://signal.supchina.com/all-the-international-brands-that-have-apologized-
to-china/.
75. Jamie Freed, “As Protests Rack Hong Kong, China Watchdog Has Cathay Staff ‘Walking on
Eggshells,’” Reuters, Octubre 3, 2019.
76. Sheridan Prasso, “Mao’s ‘Magic Weapon’ Casts a Dark Spell on Hong Kong,” Bloomberg News,
Junio 18, 2020, https://www.bloombergquint.com/businessweek/china-s-united-front-pressures-
support-for-hong-kong-laws.
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Seguridad Internacional 47:2 156
Mesa 2. Multinationals Pressured by China to Apologize for “Political Errors”
Compañía
Audi AG
Date of
apology
3/15/2017
Political error
Used map of China without Taiwan and parts of
Tibet and Xinjiang in a presentation in Germany.
MUJI
10/2017
Map in catalog did not include the Senkaku Islands.
Delta Air Lines
1/12/2018
Listed Taiwan and Tibet as countries on website.
Zara
Marriott
Internacional
Medtronic
1/12/2018
Listed Taiwan as country on website.
1/12/2018
Listed Tibet, Hong Kong, and Taiwan as countries on
customer survey.
1/15/2018
Listed Taiwan as country on website.
Mercedes-Benz
2/6/2018
Quoted Dalai Lama on Instagram.
The Gap Inc.
5/14/2018
T-shirt with map of China did not include Taiwan.
American Airlines
Group Inc.
6/25/2018
Listed Taiwan as country and Taipei as its capital on
website.
United Airlines Inc.
6/25/2018
Listed Taiwan as country on website.
McDonald’s
Corporation
UBS Group
1/19/2019
6/13/2019
TV ad in Taiwan showed student ID with Taiwan as a
country.
Economist Paul Donovan referred to a “Chinese pig”
during audio brieªng.
Versace Group
8/10/2019
Givenchy
8/12/2019
ASICS Corporation
8/12/2019
Coach
8/12/2019
Calvin Klein
8/13/2019
Valentino
8/13/2019
T-shirt with “Hong Kong” did not list “China” after
él.
T-shirt did not list “China” after “Hong Kong” and
“Taipei.”
Listed Hong Kong and Taiwan as countries on
website.
Listed Hong Kong and Taiwan as separate regions
from China on website. T-shirt with “Hong Kong”
without country following it, and “Taiwan” listed
after “Taipei.”
Listed Hong Kong and Taiwan as separate countries
or regions on website.
Listed Hong Kong and Taiwan as separate regions
on website.
Swarovski Group
8/13/2019
Listed Hong Kong as country on website.
National Basketball
Asociación
10/6/2019
Houston Rockets General Manager Daryl Morey
tweeted support for protesters in Hong Kong.
Tiffany & Co.
10/7/2019
Apple
10/9/2019
Ad with model Sun Feifei covering one eye (hong
Kong protest reference).
Hosted app HKMap.live used by protesters in Hong
Kong to track police.
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El capitalismo de partido-Estado de China y la reacción global 157
Mesa 2. continued
Compañía
Dior
Burger King
Corporation
Naturaleza
Date of
apology
10/17/2019
3/20/2020
4/9/2020
HSBC Group
6/4/2020
Political error
Delivered presentation in China with map without
Taiwán.
Burger King Taiwan referred to “the Wuhan
pneumonia” on social media.
British scientiªc journal Nature associated origin of
COVID-19 virus with Wuhan and China.
CEO did not immediately sign petition organized by
Chinese Communist Party’s United Front Work
Department supporting new National Security Law
for Hong Kong.
adidas, Burberry,
h&METRO, Lacoste,
Nike, etc..
2021
Members of Coalition to End Forced Labour in the
Uyghur Region boycotting cotton from Xinjiang.
Dior
11/24/2021
Portrayal of Chinese faces in photo.
Intel Corporation
12/23/2021
Instructed suppliers not to procure from Xinjiang.
FUENTES: Tara Francis Chen, “US Airlines Just Gave Into China’s ‘Orwellian’ Demands over
Taiwan—Here’s Every Company That’s Done the Same,” Business Insider, Julio 25, 2018,
https://www.businessinsider.in/slideshows/miscellaneous/us-airlines-just-gave-into-
chinas-orwellian-demands-over-taiwan-heres-every-company-thats-done-the-same/
slidelist/65129831.cms; David Dawkins, “UBS Economist Forced to Apologize after ‘Chi-
nese Pig’ Comments Trigger Outrage,” Forbes, Junio 13, 2019, https://www.forbes.com/
sites/daviddawkins/2019/06/13/ubs-economist-forced-to-apologize-after-chinese-pig-
comments-trigger-outrage/?sh(cid:2)4e3aab6d3979; Emily Jiang, “Burger King Faces Boycott
in China after Calling Coronavirus the ‘Wuhan Pneumonia’ on Facebook,” Daily Mail,
Marzo 30, 2019, https://www.dailymail.co.uk/news/article-8167899/Burger-King-China-
apologises-Taiwan-operator-called-coronavirus-Wuhan-pneumonia.html; Mairead
McArdle, “Leading Scientiªc Journal Nature Apologizes for ‘Associating’ Coronavirus
con china,” National Review, Abril 9, 2020; Lucas Niewenhuis, “All the International
Brands That Have Apologized to China”; Sheridan Prasso, “Mao’s ‘Magic Weapon’ Casts a
Dark Spell on Hong Kong”; Demetri Sevastopulo and Andrew Edgecliffe-Johnson, “West-
ern Brands Caught between U.S. and China over Human Rights,” Financial Times, Abril 2,
2021, https://www.ft.com/content/a0be4094-2aba-4275-a3ca-ec5e58cc5032; CK Tan, “Intel
Apologizes after Xinjiang Policy Sparks China Backlash,” Nikkei Asia, December 23, 2021,
https://asia.nikkei.com/Business/Companies/Intel-apologizes-after-Xinjiang-policy-sparks-
China-backlash; Phoebe Zhang, “Dior and Artist Chen Man Apologise for ‘Immature and
Ignorant’ Photograph That Infuriated the Chinese Internet,” South China Morning Post,
Noviembre 24, 2021, https://www.scmp.com/news/people-culture/china-personalities/arti-
cle/3157180/dior-and-artist-chen-man-apologise-immature.
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Seguridad Internacional 47:2 158
economic matters and expectations for political fealty. Murky boundaries be-
tween state-owned and private enterprises and the fact that large private com-
panies have relatively few protections from increasingly aggressive state
intervention suggest that they are not as autonomous as one might expect
given ownership structure. Even ªrms claiming to be purely private may be
politically well connected. Once businesses reach a signiªcant scale, ellos tienen
accumulated myriad relationships with various bureaucracies, which connotes
a degree of mutual dependence and vulnerability. The difªculty of distin-
guishing the political from the commercial motives of ªrms has also fueled the
perception that business interests are aligned with those of China’s party-
state.77 U.S. Senator John Cornyn expressed this succinctly in 2018: “There is
no real difference between a Chinese state-owned enterprise and a ‘private’
Chinese ªrm in terms of the national security risks that exist when a U.S.
company partners with one.”78 Regardless of whether such fusion sometimes
exists, the ambiguity has produced uncertainty about China’s intentions
abroad and triggered security competition between China and other states,
particularly the United States and its allies.
In the security dilemma literature, scholars have identiªed several mecha-
nisms by which one state’s attempted increase in security, or increased capabil-
ities, reduces the security of other states. Newly acquired capabilities can
create confusion about offense and defense and increase uncertainty about in-
tentions, giving rise to fear that a state is amassing capabilities to wield against
other states.79 The uncertainty about where China’s state or military end and
ªrms begin has led other states to fear that China could use ªrms, supply
chain dominance, or economic dependence as a weapon against potential ri-
vals. This is a major change from other countries’ views in the 1990s and
even later that China might be “paciªed by globalization”80 or “playing our
game.”81 The changes that we describe as party-state capitalism, to the con-
77. Scott L. Kastner and Margaret M. Pearson, “Exploring the Parameters of China’s Economic
Inºuence,” Studies in Comparative and International Development, volumen. 56 (2021), páginas. 18–44, https://
doi.org/10.1007/s12116-021-09318-9.
78. Full Committee Hearing: CFIUS Reform; Examining the Essential Elements, before the U.S.
Senate Committee on Banking, Housing, and Urban Affairs, 115th Cong., 2nd sess. (Enero 18,
2018), https://www.banking.senate.gov/hearings/cªus-reform-examining-the-essential-elements.
79. Jervis, Perception and Misperception.
80. Richard K.. Betts and Thomas J. Christensen, “China: Getting the Questions Right,” National In-
terest, December 1, 2000, https://nationalinterest.org/article/china-getting-the-questions-right-
408.
81. Edward S. Steinfeld, Playing Our Game: Why China’s Economic Rise Doesn’t Threaten the West
(Nueva York: prensa de la Universidad de Oxford, 2010).
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El capitalismo de partido-Estado de China y la reacción global 159
trary, were perceived by other states as evidence that China intended to
weaponize its ªrms and economic clout, thereby reducing the security of
other states.
Economic interdependence with China has thus become a national security
concern in many OECD countries. We identify three arenas in which backlash
is observable. Primero, several countries have altered institutional processes for
reviewing inward foreign investment from China. Segundo,
large Chinese
ªrms have been subjected to punitive measures as countries increasingly as-
sociate national champion ªrms with the party-state’s strategic interests.
Tercero, at the domestic and transnational levels, novel institutions, como el
A NOSOTROS. Department of Justice’s China Initiative and the U.S.-EU Trade and
Technology Council, have been established to manage unique security threats
perceived to be associated with China’s political economic model.
Before discussing economic backlash as security competition between China
and other states, we acknowledge that not all economic contestation follows a
security dilemma logic. Some conºict between China and other countries, en-
cluding conºict over Chinese ªrms, follows a purer logic of economic competi-
tion or trade conºict. En efecto, military allies may engage in trade disputes, y
most trade disputes fall outside the realm of security competition.82 This re-
mains true for China and the United States. Por ejemplo, el 2020 Phase One
trade deal between the United States and China showed that cooperation was
posible (albeit brieºy) in part because security interests were not involved.
The United States, among other countries, has long-standing complaints about
China’s treatment of foreign ªrms, technology transfer and intellectual prop-
erty practices, and China’s preference for state-owned ªrms. The measures dis-
cussed below go beyond conºict over economic practices precisely because
they involve security concerns—and they emerged after the consolidation of
party-state capitalism. Más, Chinese telecom ªrm ZTE Corporation’s viola-
82. Economic conºict between the United States and Japan in the 1980s and early 1990s is instruc-
tivo. The two countries were military allies, but fear of Japan overtaking the United States in criti-
cal industries generated pressure to restrict Japanese foreign direct investment (FDI) in the United
Estados, contributing to the Exon-Florio amendment in 1988 that institutionalized a review by the
Committee on Foreign Investment in the United States (CFIUS). Initially, some legislators wanted
to require review for acquisitions that affected “national security” or “essential commerce,” the lat-
ter desire representative of backlash against Japanese FDI. Por último, “essential commerce” was
deemed too broad and excluded from CFIUS’s purview. Por lo tanto, though Japan’s rising eco-
nomic power generated political backlash, it did not yield institutional backlash, in part because it
was not deªned as a security concern. See Edward M. Graham and David M. Marchick, A NOSOTROS. Na-
tional Security and Foreign Direct Investment (Washington, CORRIENTE CONTINUA.: Institute for International Econom-
circuitos integrados, 2006), páginas. 33–53.
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Seguridad Internacional 47:2 160
tion of U.S. sanctions on Iran ended with an agreement by which ZTE was al-
lowed to access U.S. markets after paying a ªne and under conditions of U.S.
monitoring.83 Later, ZTE was subject to sanctions and exclusions, but only af-
ter security interests regarding Chinese 5G vendors came to the fore. Our argu-
ment is not about general economic competition involving China; bastante, nosotros
aim to explain speciªc dynamics of the backlash against China in terms of se-
curity dilemmas and security competition.
scrutiny of chinese foreign direct investment
Increased scrutiny of Chinese investment by recipient countries is a major
form of backlash against party-state capitalism. In most cases, tightened in-
vestment review procedures reºect concerns over hazy ownership and the mo-
tives of investing Chinese ªrms. Backlash has, Sucesivamente, constrained China’s
efforts to gain more economic security. This cycle of insecurity and securitiza-
ción, and backlash by other governments, is exempliªed in China’s strategic
external investments to bolster the security of its domestic semiconductor
supply chain.84 Though Chinese ªrms are competitive in the manufacturing,
outsourced assembly, and testing segments of the semiconductor supply
cadena, key domestic industries rely on chips designed globally. As early as
2013, China directed state and private funds to Chinese ªrms to encourage
them to acquire foreign technology, which they reasoned would be faster than
catching up through domestic innovation.85
Initial acquisitions were successful, especially before major trade and invest-
ment partners became acquainted with MiC2025, and before new laws and
policies entangled China’s security and economic efforts. In March 2015, a con-
sortium of Chinese local government funds announced their intention to ac-
quire Integrated Silicon Solution, Cª, a specialty memory chip designer.
El $640 million cash offer triggered competitive bidding, but was won by the 83. “Settlement Agreement between the U.S. Department of the Treasury’s Ofªce of Foreign As- sets Control and Zhongxing Telecommunications Equipment Corporation” (Washington, CORRIENTE CONTINUA.: A NOSOTROS. Department of the Treasury, Marzo 7, 2017), https://home.treasury.gov/policy-issues/ ªnancial-sanctions/recent-actions/20170307. 84. Mingtang Liu and Kellee S. Tsai, “Structural Power, Hegemony, and State Capitalism: Limits to China’s Global Economic Power,” Politics & Sociedad, volumen 49, No. 2 (2021), páginas. 235–267, https:// doi.org/10.1177%2F0032329220950234. 85. El 2014 Integrated Circuit Guidelines exhorted companies to “fully utilize global resources” in research and development. See “Guideline for the Promotion.” On Vice Premier Ma Kai’s sup- port for overseas acquisitions, see PRC Central Government, “Ma Kai Emphasized: Strive to Promote the Integrated Circuit Industry to Become Better, Stronger and Bigger,” Xinhua, Septem- ber 12, 2013, http://www.gov.cn/ldhd/2013-09/12/content_2487501.htm. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 El capitalismo de partido-Estado de China y la reacción global 161 Chinese consortium and approved by the company’s shareholders.86 The pro- posed sale prompted Representative Dana Rohrabacher (R-CA) to write a let- ter to Treasury Secretary Jacob Lew warning that Chinese acquisitions could “gut” U.S. semiconductor capability.87 Nonetheless, the Committee on Foreign Investment in the United States (CFIUS) approved the deal in November, around the time that it approved the $1.9 billion cash purchase by another
Chinese semiconductor fund consortium of OmniVision Technologies, a digi-
tal imaging solutions developer.88
Approvals turned to scrutiny quickly, sin embargo, given the U.S. and other
governments’ heightened concerns over China’s new economic practices. Este
backlash against China’s acquisition efforts in semiconductors predated
Donald Trump’s presidency and the onset of generalized U.S.-China trade con-
ºict. By the end of 2016, actors inside and outside the United States were al-
ready voicing security concerns about blurred ownership lines and China’s
economic-security nexus. A White House report during the last month of
Barack Obama’s presidency, Por ejemplo, stated that the United States should
“calibrate its application of national-security controls in response to Chinese
industrial policy aimed at undermining U.S. security.”89 This interpretation of
China’s industrial policy echoes the security dilemma dynamic: políticas
86. Integrated Silicon Solution, Cª, “Schedule 14A” (Washington, CORRIENTE CONTINUA.: A NOSOTROS. Securities and Ex-
change Commission, n.d.), https://www.sec.gov/Archives/edgar/data/854701/0001193125152
21513/d942022ddefa14a.htm; and Ian King, “ISSI Shareholders Approve Acquisition by Uphill In-
vestment,"Bloomberg, Junio 29, 2015, https://www.bloomberg.com/news/articles/2015-06-29/issi-
shareholders-approve-acquisition-by-uphill-investment.
87. Pete Carey, “Shareholders Approve ISSI Acquisition by Chinese Consortium,” Mercury News,
Junio 29, 2015, https://www.mercurynews.com/2015/06/29/shareholders-approve-issi-acquisition-
by-chinese-consortium-2/.
88. OmniVision Technologies, “OmniVision to Be Acquired by Hua Capital Management, Citic
Capital and Goldstone Investment for $29.75 per Share in Cash," Abril 30, 2015, https://www .ovt.com/news-events/corporate-releases/omnivision-to-be-acquired-by-hua-capital-management- Cª, “Schedule 14A” citic-capital-and-goldstone-investment. See OmniVision Technologies, (Washington, CORRIENTE CONTINUA.: A NOSOTROS. Securities and Exchange Commission, n.d.), https://www.sec.gov/ Archives/edgar/data/1106851/000104746915005341/a2225031zdefm14a.htm; and OmniVision Technologies, Cª. “Form 8-K” (Washington, CORRIENTE CONTINUA.: A NOSOTROS. Securities and Exchange Commission, Oc- tober 5, 2015), https://www.sec.gov/Archives/edgar/data/1106851/000110465915069470/a15- 20858_18k.htm. 89. President’s Council of Advisors on Science and Technology, “Ensuring Long-Term U.S. Lead- ership in Semiconductors,” PowerPoint presentation (Washington, CORRIENTE CONTINUA.: Executive Ofªce of the President of the United States, Enero 2017), https://obamawhitehouse.archives.gov/sites/ default/ªles/microsites/ostp/PCAST/semiconductors_pcast_presentation.pdf. The authors of the report were reacting to China’s implementation rather than the presence of industrial policy as such: “Chinese competition could, in principle, beneªt semiconductor producers and consumers alike. But Chinese industrial policies in this sector, as they are unfolding in practice, pose real threats to semiconductor innovation and U.S. national security” (pag. 7). l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 Seguridad Internacional 47:2 162 adopted in China to buttress its own security were interpreted as new capabili- ties and intentions targeted against the United States. In December 2015, A NOSOTROS. and European ofªcials became alarmed by the use of industrial policy and the web of relations between potential purchasers of German chip machine supplier Aixtron.90 One year later, Obama blocked the proposed acquisition of Aixtron’s U.S. negocio, which was only the third time that any president had blocked a foreign acquisition since CFIUS was estab- lished in 1975.91 The Department of Treasury rationalized that the bidder was “owned by investors in China some of whom have Chinese government ownership,” noting that the deal would have been funded by “a Chinese government-supported industrial investment fund established to promote the development of China’s integrated circuit industry.”92 Blurred lines between the state and ªrms, coupled with a seemingly coordinated and security- motivated industrial policy, helped block Chinese acquisitions. Por último, policymakers in the United States and beyond decided that extant institutions like CFIUS and export control regimes were insufªcient to address the perceived threat of China’s party-state capitalism. In summer 2018, a bipartisan bill (the Foreign Investment Risk Review Modernization Act [FIRRMA]) overhauled CFIUS. Whereas CFIUS previously required review only when a foreign investor pursued a controlling stake, the new process ex- panded review to foreign investors seeking any stake in companies “with sub- stantial business in the U.S.” if they are in “emerging technologies” or “critical infrastructure.”93 Senator John Cornyn (R-TX), one of the FIRRMA bill’s co- sponsors, argumentó: 90. On the Aixtron case, see Eyk Henning, “U.S. Regulators Move to Stop Chinese Takeover of German Tech Firm Aixtron,” Wall Street Journal, Noviembre 20, 2016, https://www.wsj.com/arti- cles/u-s-regulators-move-to-stop-chinese-takeover-of-german-tech-ªrm-aixtron-1479549362; and Paul Mozur and Jack Ewing, “Rush of Chinese Investment in Europe’s High-Tech Firms Is Raising Eyebrows,” New York Times, Septiembre 16, 2016, https://www.nytimes.com/2016/09/17/busi- ness/dealbook/china-germany-takeover-merger-technology.html. 91. “President Obama Blocks Chinese Acquisition of Aixtron SE,” Covington blog, Decem- ber 5, 2016, https://www.cov.com/en/news-and-insights/insights/2016/12/president-obama- blocks-chinese-acquisition-of-aixtron-se. 92. “Statement on the President’s Decision Regarding the U.S. Business of Aixtron SE” (Washington, CORRIENTE CONTINUA.: A NOSOTROS. Department of the Treasury, December 2, 2016), https://home.treasury .gov/news/press-releases/jl0679. 93. Speciªcally, the Foreign Investment Risk Review Modernization Act included noncontrolling investments in a U.S. business that afford a foreign person: (1) “material nonpublic technical infor- formación,” meaning “information that is not available in the public domain and is necessary to de- sign, fabricate, develop, prueba, producir, or manufacture critical technologies”; (2) membership or observer rights on the board of directors or equivalent; o (3) “any involvement, other than through voting of shares, in substantive decision-making regarding the use, desarrollo, acquisi- l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 El capitalismo de partido-Estado de China y la reacción global 163 The context for this legislation is important and relatively straightforward, and it’s China. . . . China has been able to exploit minority-position investments in early-stage technology companies. . . . And there is no real difference between a Chinese state-owned enterprise and a “private” Chinese ªrm in terms of the national security risks that exist when a U.S. company partners with one.94 Since 2018, Chinese investment in the United States has fallen, and its invest- ment in the technology sector is near zero. The United States is not alone in responding to changes in China’s political economy. In the late 2010s, many OECD countries passed new legislation to es- tablish or strengthen investment review processes.95 The United Kingdom is- sued a Green Paper in 2017 calling for investment review and in 2018, Francia, Alemania, and Italy initiated discussions of an EU-wide investment screening process.96 In semiconductors, Taiwan and South Korea, two key hubs for the global supply chains of information and communication technologies, took steps to prohibit or restrict Chinese acquisitions and prevent transfer of intel- lectual property and engineering talent to China.97 In 2019, the Australian Foreign Investment Review Board announced its intent to increase scrutiny of Chinese private companies looking to buy Australian assets because there “is no such thing as a private company in China.”98 As the external economic environment tightened for China, domestic com- mitment to self-reliance and security concerns over economic capabilities tion, or release of critical technologies.” Federal Register, volumen. 83, No. 197 (Octubre 11, 2018) (A NOSOTROS. Department of the Treasury), https://home.treasury.gov/system/ªles/206/FR-2018-22187_17869 44.pdf. 94. Full Committee Hearing: CFIUS Reform. 95. United Nations Conference on Trade and Development (UNCTAD), World Investment Re- puerto 2020: International Production beyond the Pandemic (Nueva York: United Nations, 2020), cap. 3, https://unctad.org/webºyer/world-investment-report-2020. 96. Legislation is not typically targeted at speciªc countries; procedures specify sector or type of transaction. See European Commission, “Proposal for a Regulation of the European Parliament and of the Council Establishing a Framework for Screening of Foreign Direct Investments into the European Union,” document 52017PC0487, EUR-Lex, Septiembre 13, 2017, https://eur-lex.europa .eu/legal-content/EN/TXT/?uri(cid:2)CELEX%3A52017PC0487; UK Department for Business, En- ergy, and Industrial Strategy, National Security and Infrastructure Investment Review (Londres: National Archives, Octubre 2017), https://assets.publishing.service.gov.uk/government/ uploads/system/uploads/attachment_data/ªle/652505/2017_10_16_NSII_Green_Paper_ªnal .pdf; and UNCTAD, World Investment Report 2018: Investment and New Industrial Policies (Nueva York: United Nations, 2018), https://unctad.org/system/ªles/ofªcial-document/wir2018_en.pdf. 97. President’s Council of Advisors on Science and Technology, “Ensuring Long-Term U.S. Lead- ership in Semiconductors," pag. 12. 98. Angus Grigg, “No Such Thing as a Private Company in China: FIRB,” Financial Review, Janu- ary 16, 2019, https://www.afr.com/policy/foreign-affairs/no-such-thing-as-a-private-company- in-china-ªrb-20190116-h1a4ut. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 Seguridad Internacional 47:2 164 intensiªed. Shortly after CFIUS’s overhaul, and as Chinese investment in OECD countries was plummeting because of political concerns, Xi Jinping re- marked that China must rely on itself if rising unilateralism and protectionism obstructs access to leading technologies internationally, saying that self- reliance “is not a bad thing.”99 suspicion of large chinese ªrms Backlash to party-state capitalism has engendered harsh global treatment of large Chinese ªrms. National and supranational actors increasingly treat Chinese ªrms in many sectors, whether state-owned or not, as extensions of the party-state. These international actors express concern that such ªrms could compromise national security and/or foster dependence on China. Over the last several years, the United States and other OECD countries have taken extraordinary steps to manage the perceived threat of China’s national cham- pions, making them the targets of coordinated containment efforts. The global ªght over 5G has been at the center of U.S.-China competition and has deeply affected third-party countries. A NOSOTROS. lawmakers have long been suspicious of ZTE’s state-owned status and Huawei’s murky ownership. A 2012 House Intelligence Committee report criticized both companies for fail- ing to clarify their relationships with the CCP and warned that they posed threats of “economic and foreign espionage by a foreign nation-state already known to be a major perpetrator of cyber espionage.”100 The report recom- mended that both the U.S. government and the private sector exclude Chinese vendors from their systems, yet it would be almost seven years before the 2018 National Defense Authorization Act prohibited federal agencies from procur- ing products or services from Huawei or ZTE. Mientras tanto, Huawei equipment was already widely used in rural networks in the United States, and the company had extensive U.S.-based R&D centers, including partnerships with Stanford, el Instituto de Tecnología de Massachusetts, and the University of California at Berkeley.101 Apprehensions mounted over Huawei’s acknowl- 99. Xu Wei, “Xi Stresses Nation’s Self-Reliance,” China Daily, Septiembre 27, 2018, http:// www.chinadaily.com.cn/a/201809/27/WS5babed9aa310c4cc775e8414.html. 100. A NOSOTROS. House of Representatives Permanent Select Committee on Intelligence, Investigative Re- port on the U.S. National Security Issues Posed by Chinese Telecommunications Companies Huawei and ZTE, 112th Cong., 2nd sess. (Octubre 8, 2012), https://republicans-intelligence.house.gov/sites/ intelligence.house.gov/ªles/documents/huawei-zte%20investigative%20report%20(ªnal).pdf. 101. Paul Triolo, Kevin Allison, and Clarise Brown, Eurasia Group White Paper: The Geopolitics of 5G (Londres: Eurasia Group, Noviembre 15, 2018), https://www.eurasiagroup.net/siteFiles/Media/ l D o w n o a d e d f r o m h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 El capitalismo de partido-Estado de China y la reacción global 165 edged theft of intellectual property, its publicly traceable reliance on subsidies from the Chinese government, and alleged aggressive practices and corporate espionage.102 The company’s behavior caused many, including those who gen- erally supported economic engagement with China, to support either sanc- tions against or a Section 301 investigation of Huawei.103 By 2018, A NOSOTROS. efforts to limit international expansion of Chinese telecom ªrms became increasingly urgent. The detention in Canada of Huawei Chief Financial Ofªcer Meng Wanzhou, at the Department of Justice’s request, was followed in May 2019 by the Donald Trump administration’s executive order to place Huawei and its afªliates on the U.S. Department of Commerce’s Bureau of Industry and Security’s “unreliable entity” list. As Chinese tele- com ªrms were subjected to unprecedented export controls, Estados Unidos. State Department launched a global campaign against China over 5G. Allies in Europe, Asia, América Latina, and beyond were exhorted to join the U.S.-led Clean Network or risk losing U.S. investment, aid, or intelligence sharing. Why did the United States initially open doors, albeit tepidly, to Chinese telecom ªrms and then embark on a global campaign to constrain and cripple them? We argue that the change in China’s domestic political economic model contributed to this acceleration. While there had always been doubts about Huawei’s independence from the CCP and China’s military, claims that the company could be independent or exclusively commercially minded seemed increasingly implausible. Estados Unidos. government’s view of Chinese technology ªrms, and economic interdependence with China in general, became focused on security in reaction to the CCP’s domestic securitization and model of party-state capitalism. The Trump administration’s policies toward Chinese tech ªrms—initiated under Obama and then largely continued under President Joe Biden—were based on concerns about the “pervasive nature of CCP power in China’s do- mestic economic and legal system,” such that the “party-state operates with a broad conception of national security and has tightened its grip on companies ªles/1811-14%205G%20special%20report%20public(1).pdf; and William Kirby, Billy Chan, and John P. McHugh, Huawei: A Global Tech Giant in the Crossªre of a Digital Cold War, HBS Case 320-089 (Cambridge, Masa.: Harvard Business School Publishing, 2020), páginas. 6–7. 102. Scott Thurm, “Huawei Admits Copying Code from Cisco in Router Software,” Wall Street Journal, Marzo 24, 2003, https://www.wsj.com/articles/SB10485560675556000. 103. Interviews with former Commerce Department ofªcial, December 2018, Washington, CORRIENTE CONTINUA.; and former U.S. trade representative adviser, Octubre 2017, Washington, D.C. Sección 301 of the Trade Act of 1974 enables the U.S. trade representative to investigate and take action to defend the United States from unfair foreign trade practices. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 Seguridad Internacional 47:2 166 and citizens alike.”104 To be sure, the “omni-use” of technologies mattered, but it was the perception of China’s domestic political economy that changed over time, narrowing the space for cooperation and tolerance in host countries and with trade partners. Secretary of State Mike Pompeo’s global Clean Network initiative, which began with 5G and expanded to a wide swath of tech sectors (p.ej., cloud com- puting, undersea cables, software applications, datos, minerals, infrastructure), illustrates the importance of China’s political economic system in generating broad backlash. Many OECD countries, including the United Kingdom, Alemania, and France, initially allowed Huawei to bid for 5G contracts and pursued technical solutions to mitigate risk. The United Kingdom, for ex- amplio, established the Huawei Cyber Security Evaluation Centre under the auspices of the National Cyber Security Centre as early as 2010.105 Over the course of 2019–2020, sin embargo, many OECD governments and some devel- oping countries decided to exclude Huawei from their respective networks over concerns that it was a Chinese company that could not guarantee its inde- pendence from the CCP. A German policy report concluded: “While there is also little reason to believe that the company has a particular interest in serv- ing political purposes, Huawei has not only proªted from party-state support, but is operating in a speciªc political, legal and economic environment that makes it impossible for the company to be fully independent.”106 Wariness about China’s political economy extended beyond the risk of surveillance through telecom equipment or Huawei’s compelled participation in PRC intel- ligence work to encompass the risk that excessive dependence on Chinese technology would translate into political leverage. This perceived threat moti- vated the European Union’s Toolbox for 5G Security, which requires member states to “ensure that each operator has an appropriate multi-vendor strategy to avoid or limit any major dependency on a single supplier and avoid dependency on suppliers considered to be high risk [cursiva en el original].”107 Australia 104. Robert D. williams, “Beyond Huawei and TikTok: Untangling U.S. Concerns over Chinese Tech Companies and Digital Security,” working paper, Project on U.S.-China Relations, universidad- sity of Pennsylvania (Washington, CORRIENTE CONTINUA.: Brookings Institution, Octubre 30, 2020), https://www .brookings.edu/research/beyond-huawei-and-tiktok-untangling-us-concerns-over-chinese-tech- companies-and-digital-security/. 105. Ian Levy, “The Future of Telecoms in the UK,” National Cyber Security Centre blog, Janu- ary 28, 2020, https://www.ncsc.gov.uk/blog-post/the-future-of-telecoms-in-the-uk. 106. Tim Rühlig, “Who Controls Huawei? Implications for Europe” (Stockholm: Swedish Institute of International Affairs, Puede 2020), pag. 8, https://www.ui.se/globalassets/butiken/ui-paper/ 2020/ui-paper-no.-5-2020.pdf. 107. European Commission, “The EU Toolbox for 5G Security,” March 2021, https://digital- strategy.ec.europa.eu/en/library/eu-toolbox-5g-security. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 El capitalismo de partido-Estado de China y la reacción global 167 likewise banned Chinese telecom vendors in 2018 because of the belief that these ªrms were “likely to be subject to extrajudicial directions from a foreign government” and therefore posed a security risk.108 New attempts to manage the perceived political risks of large ªrms are not conªned to technology. Amid a rise in investments following the global ªnancial crisis, the European Commission sought a means to review Chinese SOE investments, but various individual SOE assets in the European Union were too small to trigger the review threshold. En 2016, sin embargo, the European Commission issued a landmark decision to treat all Chinese SOEs in a single sector as one entity, thereby enabling the commission to adjudicate any given SOE’s deals with any EU entity. The decision represented European policy- makers’ deployment of competition policy to address the perceived problems of state objectives affecting commercial enterprises in China’s model of party- state capitalism.109 institutional reorganization and innovation We have discussed how OECD countries have overhauled or strengthened their existing institutions or attempted to build new national and transnational institutions to manage perceived threats posed by Chinese businesses. In each of these situations, policymakers have argued for new tools and policies be- cause of the blending of state and commercial, or social, interests in China. The proposed solutions envision dramatic changes in the nature of Western politi- cal economy and, en algunos casos, spur controversial and intrusive behaviors into both the economy and U.S. sociedad. Por ejemplo, we observe mounting efforts to limit outbound investment to China, especially in the United States. CFIUS was designed to ensure that foreign ªrms investing in the United States would not compromise national- security interests. But with escalating concerns about forced technology trans- fer and the prospect of U.S. capital supporting party-state goals, policymakers have begun to imagine institutions or rules that restrict the freedom of U.S. ªrms to make decisions about outbound investments. En efecto, a ªrst iteration of the FIRRMA bill would have expanded CFIUS’s purview to review every external investment of a U.S. negocio. In the end, FIRRMA did not contain this provision, but the idea of an institution that would review outbound in- vestment remains. Questioning at a 2021 U.S.-China Economic and Security 108. “Huawei and ZTE Handed 5G Network Ban in Australia,” BBC News, Agosto 23, 2018, https://www.bbc.com/news/technology-45281495. 109. zhang, Chinese Antitrust Exceptionalism, páginas. 119–162. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 Seguridad Internacional 47:2 168 Review Commission hearing expressly considered the features of an “out- bound CFIUS.”110 A wave of recent executive orders has tightened restric- tions on U.S. capital investments in Chinese ªrms allegedly linked to the People’s Liberation Army. President Trump issued such an executive order in November 2020, and in June 2021, President Biden expanded the limits to include “use of Chinese surveillance technology outside the PRC, as well as the development or use of Chinese surveillance technology to facilitate repres- sion or serious human rights abuses.”111 Efforts in the U.S. Congress to restrict outbound foreign investment to China continued unabated into 2022.112 Established in November 2018, the Department of Justice’s China Initiative provided a controversial example of an expansive response designed in part to address the uniqueness of China’s model and the blurring of state and society. The initiative, the ªrst in the Justice Department that named a speciªc country, was premised on the idea that a variety of activities emanating from the PRC, including economic espionage, intellectual property theft, inºuence on aca- demic campuses, y más, pose a signiªcant national security threat to the United States and require a muscular response.113 Federal Bureau of Investiga- tion Director Christopher Wray reasoned: 110. Many objected to an outbound CFIUS, including members of the business community and others who feared a massive expansion of bureaucracy. See testimony by opponents at the U.S. House of Representatives Committee on Foreign Affairs, Modernizing Export Controls: Protecting Cutting-Edge Technology and U.S. National Security, 115th Cong., 2nd sess. (Marzo 14, 2018), https:// docs.house.gov/meetings/FA/FA00/20180314/107997/HHRG-115-FA00-Transcript- 20180314.pdf; and Hearing on U.S. Investment in China’s Capital Markets and Military-Industrial Complex, before the U.S.-China Economic and Security Review Commission, 117th Cong., 1st sess. (Marzo 19, 2021), https://www.uscc.gov/sites/default/ªles/2021-03/March_19_2021_Hearing _Transcript.pdf. 111. Casa Blanca, “Fact Sheet: Executive Order Addressing the Threat from Securities Invest- ments that Finance Certain Companies of the People’s Republic of China,” June 3, 2021, https:// www.whitehouse.gov/brieªng-room/statements-releases/2021/06/03/fact-sheet-executive- order-addressing-the-threat-from-securities-investments-that-ªnance-certain-companies-of-the- peoples-republic-of-china/. See also “Addressing the Threat from Securities Investments that Fi- nance Communist Chinese Military Companies,” Federal Register, volumen. 85, No. 222 (Noviembre 17, 2020) (Executive Ofªce of the President), https://www.federalregister.gov/documents/2020/11/ 17/2020-25459/addressing-the-threat-from-securities-investments-that-ªnance-communist- chinese-military-companies. In Executive Order 13959, President Trump stated, “Those com- empresas, though remaining ostensibly private and civilian, directly support the PRC’s military, intelligence, and security apparatuses and aid in their development and modernization.” 112. See the broadly scoped United States Innovation and Competition Act of 2021, S.1260, 117th Cong., 1st sess. (Junio 8, 2021), https://www.democrats.senate.gov/imo/media/doc/ USICA%20 Section-by-Section%205.19.21.pdf; and President’s Council of Advisors on Science and Technology, “Ensuring Long-Term U.S. Leadership in Semiconductors.” 113. Margaret K. Luis, “Criminalizing China,” Journal of Law and Criminology, volumen. 111 (2020), páginas. 145–225, https://scholarlycommons.law.northwestern.edu/jclc/vol111/iss1/3. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 El capitalismo de partido-Estado de China y la reacción global 169 China from a counterintelligence perspective represents the broadest, most challenging threat we face at this time . . . because with them it’s a whole of state effort. It is economic espionage as well as traditional espionage; it is non- traditional collectors as well as traditional intelligence operatives; it’s human sources as well as cyber means.114 Among its multiple targets, the China Initiative addressed growing suspi- cion that scientiªc and academic exchanges were a core channel for intellec- tual property theft, espionage, and other security risks. In the words of U.S. Attorney for the District of Massachusetts Andrew Lelling, “If you are collabo- rating with any Chinese entity, whether it’s a university or a business, you are giving that technology to the Chinese government.”115 The intense scrutiny di- rected at Chinese nationals and Chinese Americans resulted in multiple cases of investigative overreach and racial proªling, providing China with further evidence of anti-China sentiment in the United States. En febrero 2022, after a months-long review and few results to show, the Department of Justice for- mally ended the China Initiative.116 An altogether different set of national reactions to China’s model is less about constraining China and more about emulating its industrial policies and encouraging public-private partnerships. MiC2025 was modeled in part on Germany’s Industry 4.0 plan. Reactions by U.S. Responsables políticos, even among Republicans typically critical of statist economic intervention, include calls for “catalytic” investments in domestic technology sectors, extensive government 114. Catherine Lutz, “FBI Director Christopher Wray Wants to Talk about More Than Russia,” Aspen Institute blog, Julio 20, 2018, https://www.aspeninstitute.org/blog-posts/fbi-director- christopher-wray-wants-talk-about-more-than-russia/. Christopher Wray’s “whole-of-society” approach to confronting China echoes Xi’s 2018 view that the party should lead a “whole-of-soci- ety approach” to creating a cyber superpower. Christopher Wray, “The Threat Posed by the Chinese Government and the Chinese Communist Party to the Economic and National Security of the United States,” remarks at Video Event: China’s Attempt to Inºuence U.S. Instituciones, Hudson Institute, Julio 7, 2020, https://www.fbi.gov/news/speeches/the-threat-posed-by-the- chinese-government-and-the-chinese-communist-party-to-the-economic-and-national-security-of- the-united-states/; and Rogier Creemers, Paul Triolo, and Graham Webster, “Translation: Xi Jinping’s April 20 Speech at the National Cybersecurity and Informatization Work Conference,” New America blog, Abril 30, 2018, https://www.newamerica.org/cybersecurity-initiative/ digichina/blog/translation-xi-jinpings-april-20-speech-national-cybersecurity-and-informatization- work-conference/. 115. Andrea Widener, “70 Years of U.S. Suspicion toward Chinese Scientists—and What Those Caught in the Middle Should Do Now,” Chemical & Engineering News, Marzo 22, 2020, https://cen.acs.org/policy/research-funding/70-years-US-suspicion-toward/98/i11, cited in Lewis, “Criminalizing China," pag. 178. 116. Aruna Viswanatha, “Justice Department Shifts Approach to Chinese National Security Threats,” Wall Street Journal, Febrero 23, 2022, https://www.wsj.com/articles/justice-department- shifts-approach-to-chinese-national-security-threats-11645646452. l D o w n o a d e desde h t t p : / / directo . mi t . e d u / i s e c / a r t i c e – pdlf / / / / 4 7 2 1 3 5 2 0 5 5 5 5 4 / i s e c _ a _ 0 0 4 4 7 pd . f por invitado 0 8 septiembre 2 0 2 3 Seguridad Internacional 47:2 170 procurement to create markets for novel technologies, and massive state in- vestment in frontier sectors.117 In July 2022, el $52 million bipartisan CHIPS
for America Act passed the U.S. Senate, with the goal of encouraging semicon-
ductor companies to boost production of chips in the United States.118 Al-
though some of the architects of these new industrial policies are uneasy
about them, they argue that changes are necessary to address China’s unique
political economy. Christopher Ford, then assistant secretary of state under
Trump, explained:
We are working to break down traditional institutional stovepipes [en los EE.UU..
gobierno] to confront Beijing’s whole-of-system strategy with a broad and
coordinated response of our own. To be sure, we do not seek to break down all
of the stovepipes in our socio-political system as the Chinese themselves have
been attempting with their “Military-Civil Fusion” (MCF) estrategia. . . . We here
en los EE.UU.. government don’t have the authority to do that, and we don’t
want it. Free societies should not have the ability to call upon all of the tools of
domestic coercion and command that are available to an authoritarian police
state such as China.119
One State Department adviser remarked, “We’re being backed into a more in-
trusive set of government policies. But we don’t have a choice if we’re going to
deal with the commercial threat posed by China’s national champions.”120
At the levels of U.S. foreign policy and international regulation, concerns
have shifted from managing unfair competition with “China, Inc.”121 to con-
117. See United States Innovation and Competition Act of 2021.
118. See the Senate bill, CHIPS for America Act, S.3933, 116th Congress (2020), https://www
.congress.gov/bill/116th-congress/senate-bill/3933/text; and a similar House bill, CHIPS for
America Act, H.R. 7178, 116th Congress (2020), https://www.congress.gov/bill/116th-congress/
house-bill/7178/text.
119. See “Christopher Ford, State Department, Bureaucracy and Counterstrategy: Meeting The
China Challenge, Sept. 11, 2019,” remarks at the Conference on Great Power Competition, A NOSOTROS.
Department of Defense, USC U.S.-China Institute, University of Southern California, Los An-
geles, https://china.usc.edu/christopher-ford-state-department-bureaucracy-and-counterstrategy-
meeting-china-challenge-sept-11.
120. Quoted in Meg Rithmire and Courtney Han, The Clean Network and the Future of Global Tech-
nology Competition, HBS Case 721-045 (Cambridge, Masa.: Harvard Business School Publishing,
Abril 2021).
121. Concerns about unfair competition were the predominant reasons for the U.S.-China trade
war that began in 2018. Even though national security was at times invoked as the rationale, semejante
as for restrictions on iron and steel, the measures—reºecting what was legally most expedient in
A NOSOTROS. law—stuck to more standard trade remedies (p.ej., tariffs). On “China Inc.,” see Mark Wu,
“The ‘China, Inc.’ Challenge to Global Trade Governance,” Harvard International Law Journal, volumen.
57 (2016), páginas. 1001–1063, Harvard Public Law Working Paper No. 16-35, https://ssrn.com/
abstract(cid:2)2779781.
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El capitalismo de partido-Estado de China y la reacción global 171
fronting party-state capitalism, in which economic interdependence is inter-
preted to pose a security threat in addition to an economic one. A NOSOTROS. ofªcials
and trade attorneys have long considered WTO rules, including those de-
signed to restrict advantages that SOEs might gain from access to state funds,
to be inadequate for addressing challenges posed by China.122 Recent thinking
about how to manage the perceived ill effects of party-state capitalism has oc-
curred largely outside of international institutions such as the WTO, and in a
style more akin to military alliances. A prime example is the Clean Network
initiative, which took the shape of a transnational network partly to “provide a
security blanket against China’s retaliation,” as its architect explained.123
en el extremo, China’s blending of political imperatives and economic in-
terdependence has prompted calls for a “new kind of alliance—like NATO,
but for economic rather than military threats.”124 Some view China’s threats of
retaliation and economic boycotts of countries that challenge its political views
or discriminate against its ªrms as a problem that requires “collective eco-
nomic defense,” such as jointly imposing tariffs and providing capital and
strategic resources for countries punished by China.125 Milder but still conse-
quential forms of multinational institutional innovation involve increased at-
tention to alliance-focused coordination on technology use and standards, datos
use and privacy, and supply chain resilience. Established in June 2021, el
U.S.-EU Trade and Technology Council is, in the words of Biden’s National
Security Advisor Jake Sullivan, intended to align “our approaches to trade and
technology so that democracies and not anyone else, not China or other autoc-
racies, are writing the rules for trade and technology for the 21st century.”126
The council will initially prioritize coordinating standards on artiªcial intelli-
122. Ibídem.
123. In the words of Keith Krach, A NOSOTROS. undersecretary for economic affairs in the Trump adminis-
tration, “The elephant in the room was always the CCP’s bullying. Countries and companies were
terriªed of its retaliation. Sin embargo, the key to beating all bullies is to confront them head-on. . . .
And he really backs down if you have your friends by your side. The key to defeating China
Cª. lies in the power of assembling a network of trusted partners to serve as a security blanket
against China’s retaliation.” Telephone interview with author, Bostón, Massachusetts, Enero 27,
2021.
124. Anthony Vinci, “How to Stop China from Imposing Its Values,” Atlantic, Agosto 2, 2020,
https://www.theatlantic.com/ideas/archive/2020/08/like-nato-but-for-economics/614332/.
125. Ibídem.
126. Jake Sullivan, quoted in Mark Scott and Jacopo Barigazzi, “U.S. and Europe to Forge Tech Al-
liance amid China’s Rise,” Politico, Junio 9, 2021, https://www.politico.eu/article/eu-us-trade-tech-
council-joe-biden-china/.
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Seguridad Internacional 47:2 172
gence, quantum computing, and biotechnologies, all target industries for
China’s industrial policy and blurred ownership mechanisms.
Before concluding, we consider how our account of China’s domestic changes
and ensuing international backlash may be distinguished from other explana-
tions of conºict involving China, especially with the United States and its al-
lies. One explanation for U.S.-China economic contestation might attribute
their rivalry to the structure of the international system. Realist views focus
on tensions inherent in China’s emergence as a global superpower and poten-
tial to challenge U.S. hegemony. Realists therefore expect that the United States
and its allies would seek to contain China’s rise and that security dilemma dy-
namics would materialize.127 Although such an argument is consistent with
our evidence and explanation, classical realism does not predict conºict pri-
marily in the economic realm, nor does it encompass non-state actors such as
ªrms. Unlike a liberal institutionalist view, these approaches do not regard in-
ternational regimes as sufªcient to ameliorate forces of mutual distrust and
suspicion, nor do they predict that economic interactions would lead to secu-
rity competition.
A second explanation for increased conºict between U.S. allies and China,
and measures to punish or exclude Chinese ªrms, would identify concentrated
ªrm interests as sources of backlash. A rich international political economy tra-
dition regards interest groups as a key driver in forming states’ interests.128 An
interest-based lens would identify backlash as an expression of concentrated
ªrm interests. Por ejemplo, Dustin Tingley et al. ªnd that opposition to
Chinese merger and acquisition efforts from 1999 a 2014 arose from sectoral
economic stress and lack of reciprocity for U.S. ªrms in China’s market.129 Still,
their analysis suggests that resistance seldom translated into government ac-
ción. Por el contrario, we document extensive changes within the institutions that
govern economic engagement with China in ways that span sectors and fre-
quently contravene U.S. business interests.
Por ejemplo, in debates about export controls, many believe that the na-
127. mearsheimer, “Can China Rise Peacefully?"
128. Por ejemplo, Jeffry Frieden, Global Capitalism: Its Fall and Rise in the Twentieth Century (Nuevo
york: W.. W.. norton, 2006).
129. Dustin Tingley et al., “The Political Economy of Inward FDI: Opposition to Chinese Mergers
and Acquisitions,” Chinese Journal of International Politics, volumen. 8, No. 1 (Primavera 2015), páginas. 27–57,
https://doi.org/10.1093/cjip/pou049.
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El capitalismo de partido-Estado de China y la reacción global 173
tional security apparatus has been at odds with U.S. business interests. El
head of the U.S. semiconductor industry group expressed concern about
the negative impact of export controls on U.S. ªrms, citing that China “ac-
counted for about one-third of the industry’s revenue, and that it would be ‘di-
sastrous’ for semiconductor companies to not have access to such a huge and
growing market.” In another example, a commissioner on the U.S.-China
Congressional Commission and advocate of “decoupling” stated:
The industry viewpoint has been the Commerce viewpoint since the fall of the
Soviet Union, and they’re not able to make the adjustment that the work has
changed. . . . The industry capture is not, in my view, industry saying, “Hey,
meet me at the Jefferson Memorial and I have a suitcase of money for you.”
It’s that these guys have been trained for 30 years to think that exports are
good for America and that’s that. . . . So surprise, they don’t want tighter ex-
port controls.130
Hearings on FIRRMA featured representatives from the ªnancial sector, especialmente-
cially venture capitalists who sharply opposed enhanced review, así como
arguments from advocates of review on outbound investments that U.S. ªrms
might harm national security by transferring technology to China.131
To be sure, the interests of ªrms related to China vary by sector, geography,
Etcétera. On balance, sin embargo, Estados Unidos. business community has opposed
calls for national security–based decoupling of the U.S. economy from institu-
tions and supply chains involving Chinese actors, which at its extreme would
mean reversing decades of growing economic interdependence. The American
Chamber of Commerce’s China 2021 Policy Priorities document states:
We remain opposed to any effort at outright decoupling of the US-China rela-
tionship. The costs of decoupling from losing trade and foreign investment
beneªts for both countries would be signiªcant and unlikely to generate clear
winners. We respect the legitimate needs of both countries to deªne and pro-
tect their national security and law enforcement interests and urge them to do
so in ways that leave space for commercially-focused engagement to take
place and in close consultation with the business community.132
130. Ana Swanson, “The Agency at the Center of America’s Tech Fight with China,” New York
Times, Marzo 26, 2021, https://www.nytimes.com/2021/03/26/business/economy/commerce-
department-technology-china.html.
131. Full Committee Hearing: CFIUS Reform.
132. “AmCham China’s 2021 Policy Priorities,” American Chamber of Commerce China, https://
www.amchamchina.org/press/amcham-chinas-2021-policy-priorities/.
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Seguridad Internacional 47:2 174
The geographic scope and institutional diversity of backlash against China
and Chinese ªrms is better explained in terms of security dilemma dynamics
than manifestations of vested interests.
Conclusión
Driven by the leadership’s ampliªed perceptions of threats to economic and
national security, China’s shift from a classic form of state capitalism focused
mainly on growth to party-state capitalism was an unwelcome development
for Western policymakers. Rather than pursuing further market liberalization,
as some had hoped, China has instead intensiªed state control over the econ-
omy and society, with a much more pronounced role for the CCP’s political
priorities domestically and abroad. Along with Chinese ªrms’ growing pres-
ence overseas, this change in China’s political economy has stoked external
suspicion of China’s motives and behaviors. While some commentators be-
lieve that the West has ªnally woken up to the CCP’s long-term plans, we view
this shift as neither inevitable nor based on a blueprint for global political
dominance.133 We have argued that China’s political economic model evolved
in a process that began before Xi’s assumption of power and sharpened under
his leadership. The underlying mechanism was the regime’s intensiªed per-
ception of domestic and international threats.
The emergence of party-state capitalism in China has also produced sig-
niªcant tension domestically as the primacy of politics affects government-
business relations. Reºecting on the business sector’s relationship to the state,
the CEO of search engine Sogou observes:
We’re entering an era in which we’ll be fused together. . . . If you think clearly
about this, you really can resonate together with the state. You can receive
massive support. But if it’s your nature to want to go your own way, to think
that your interests differ from what the state is advocating, then you’ll proba-
bly ªnd that things are painful, more painful than in the past.134
133. On the adaptive nature of China’s overseas development policies more generally, ver, for ex-
amplio, Yuen Yuen Ang, “Demystifying Belt and Road,” Foreign Affairs, Puede 22, 2019; and Meg
Rithmire, “Going Out or Opting Out? Capital, Political Vulnerability, and the State in China’s Out-
ward Investment,” Comparative Politics, volumen. 54, No. 3 (Abril 2022), páginas. 477–499, https://doi.org/
10.5129/001041522X16244682037327.
134. Rick Umback, “Huawei and Telefunken: Communications Enterprises and Rising Power
Strategies,” Strategic INSIGHTS, No. 135, Australian Strategic Policy Institute, Abril 17, 2019, pag. 12,
https://www.aspi.org.au/report/huawei-and-telefunken-communications-enterprises-and-rising-
power-strategies.
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El capitalismo de partido-Estado de China y la reacción global 175
Things have indeed been more painful for prominent entrepreneurs who have
famously lost control over their ªrms or their freedoms for running afoul of
the CCP. China’s unprecedentedly rapid growth for most of the reform era was
driven by private ªrms whose interests did not threaten the regime, y algunos-
times even spurred the regime to adapt to them.135 It remains to be seen
whether those innovative and productive practices will continue apace under
a new political economic system in which ªrms and individuals face greater,
even existential, risks.
Global backlash has intensiªed and accelerated. We have shown that much
of this backlash has been generated by, and subsequently directed against, el
blurring of state interests and commercial endeavors. National governments in
OECD countries are highly uncertain about—and threatened by—the inability
to parse the boundary between the state and ªrms, whether state-owned or
privado. This confusion and risk aversion, reinforced by those who seek to gain
from politicizing China’s international presence, has led to the securitization of
cross-border trade and investment ºows with China. De este modo, whereas the CCP
embraced party-state capitalism to make the regime more secure domesti-
cally and internationally, instead it has fomented increasing isolation, suspi-
cion, and exclusion, which pose limits to China’s global ambitions. El resultado
has accelerated China’s quest for self-reliance in crucial strategic goods and
has sought to further fuse China’s state and societal interests. Tomados juntos,
these dynamics bear the spiraling hallmarks of a classic security dilemma, pero
one located in the economic realm.
We have also documented rapid institutional change within and across ad-
vanced industrial democracies as they react to China’s transformation under
complex interdependence. We have shown how, at the domestic and trans-
national levels, the formal and informal rules of capitalism have changed
as national governments and political actors endeavor to manage perceived
threats presented by China’s unique blend of state and economy: party-state
capitalismo. This change is illustrated most strikingly in the United States, a
country with historically very low barriers to capital ºows, where bipartisan
initiatives propose to control not only incoming capital but also the outºow of
capital. Colectivamente, the backlash and institutional changes documented in this
135. Kellee S. Tsai, “Adaptive Informal Institutions and Endogenous Institutional Change in
Porcelana,“Política mundial, volumen. 59, No. 1 (Octubre 2006), páginas. 116–141, https://www.jstor.org/stable/
40060157.
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Seguridad Internacional 47:2 176
article could constitute a lasting shift in the international order in terms of eco-
nomic openness and interdependence.
A good deal of scholarship addresses whether China presents a challenge to
the “rules-based international order,” or more precisely, the many interna-
tional orders in which China is engaged. Several scholars have argued that
China is unlikely to challenge open trade and international ªnancial orders.
But they have overlooked how other countries’ reactions to China’s unique
global economic presence may affect interdependence.136 Other countries’ re-
sponses to China’s party-state capitalism have already compromised princi-
ples of free trade and open borders.
China’s economic rise and its domestic economic transformation have had
an unsettling effect on global capitalism and the strategies of national political
economías. A growing literature in macroeconomics examines the “China
shock,” referring to how China’s entry into global markets has transformed la-
bor markets and political preferences throughout the world.137 The empirical
trends documented in this article suggest a research agenda that examines a
diferente, political form of a China shock, and one best studied by political sci-
entistas: how global and domestic actors have initiated or reshaped agendas
and preferences in light of the unique challenges presented by China’s political
economic model. Like other critical junctures or disruptions in the global polit-
ical economy—such as the oil crises of the early 1970s and the rise of knowl-
edge economies in the 1990s—a “China shock” refracted through domestic
electoral politics and social movements could upend long-held political com-
mitments and introduce novel responses that shape the political and economic
gestalts of a new era.138
136. Alastair Iain Johnston, “China in a World of Orders: Rethinking Compliance and Challenge
in Beijing’s International Relations,” Seguridad Internacional, volumen. 44, No. 2 (Caer 2019), páginas. 9–60,
https://doi.org/10.1162/isec_a_00360; and Weiss and Wallace, “Domestic Politics, China’s Rise.”
137. David H. Autor, David Dorn, and Gordon H. Hanson, “The China Shock: Learning from La-
bor-Market Adjustment to Large Changes in Trade,” Annual Review of Economics, volumen. 8 (Octubre
2016), páginas. 205–240, https://doi.org/10.1146/annurev-economics-080315-015041; see also the pa-
pers at the China Trade Shock project, https://chinashock.info/papers/. On populist backlash, ver
j. Lawrence Broz, Jeffry Frieden, and Stephen Weymouth, “Populism in Place: The Economic
Geography of the Globalization Backlash,” International Organization, volumen. 75, No. 2 (2021), páginas. 464–
494, https://doi.org/10.1017/S0020818320000314.
138. See Peter Hall, “The Electoral Politics of Growth Regimes,” Perspectives on Politics, volumen. 18,
No. 1. (2020), páginas. 185–199, https://doi.org/10.1017/S1537592719001038.
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