A considerable amount of research has been published on the parts played by Taiwanese entrepreneurs (Taishang), Chinese officials and migrant labour in the export-oriented industrialization of China since the launch of its reform and opening policy. Wu Jieh-min, a research fellow at the Institute of Sociology, Academia Sinica, in Taiwan, has himself regularly published on this topic since the 1990s. However, the present book – originally published in Chinese in 2019 – represents a politico-economic history spanning 40 years of China's development, thanks to an analysis rooted in first-hand data collected throughout the period, and in a comprehensive theoretical framework. One can presume that the audience of such a lengthy book is confined to the academic sphere, including students. But in the future, anyone wishing to go beyond simplistic formulae summarizing the narrative of China's so-called economic miracle will have to read this detailed, nuanced, yet overarching research.
In its structure, the book goes from the general to the particular – i.e. the author's main illustrative data – and back to a comparative perspective on China. Drawing on the existing literature, chapter one states the focal point of this research – the embedded relationship between foreign investors and the local institutional structure – and describes the sources and research methods. Chapter two offers an overview of the origins and development of the so-called Guangdong model. Chapters three and four provide an in-depth description of a Taiwanese leather goods manufacturer's business activities, in Taiwan and subsequently in China. The manufacturer experienced three stages of development: first, it was a Taiwanese trading company (1979–1988); second, it rented a building and established a factory in Dongguan, Guangdong (1989–1994); and third, it built its own factory, enhanced product quality and production capacity, and was taken over by the second generation of management until it stopped doing business in China (1995–2010). These two central chapters offer empirical data supporting the main argument of the book, namely that the operational mechanism of economic rent motivated Chinese local governments and officials to actively attract outside investment and to cooperate with the development of foreign-invested enterprises on a basis of mutual agreement or tacit approval. Chapter five proposes an institutional logic of Chinese-style exploitation: situated in a system of differential citizenship, the migrant working class suffers the double exploitation of the state and capital. While chapter six discusses the transformation of the Guangdong model, chapter seven proposes a theory of the rent-seeking developmental state anchored in a comparison with the historical experiences of other East Asian states (Japan, South Korea and Taiwan).
Summarizing the book does not do it justice, since its main argument is not breaking new ground. Rather, Wu's major contribution lies in deciphering non-linear processes supported by empirical data. Even though the term “model” – the Guangdong model, the China model, etc. – is omnipresent, the analysis revolves around historical experiences. This leads Wu to call into question numerous presuppositions, such as the so-called foreign direct investment enclaves which, in fact, were only a surface phenomenon and which became gradually embedded in local society. The book provides long quotes from interviews that the author subsequently analyses to show the ambivalence of micro-processes. Also, when analysing how Taiwanese entrepreneurs formed special political–business relationships with local governments, Wu explains in detail the calculation of the various taxes and related fees paid by Taiwanese entrepreneurs and how the so-called head tax – the highest fee – was the price the manufacturer paid for official protection (pp. 163–176). But in so doing, the author is quick to show that such government–business relationship networks are embedded in a specific policy and structural environment, and as soon as the external institutional environment changes, the cooperation or collusion between government and business is bound to be affected and then adjusted. Wu also closely recounts how each institution emerges in the structural interstices and then how it vanishes. In other words, the explanation of rent-seeking and economic growth provided in this book is far from one of linear cause and effect.
Certainly, the focus of the book is on the relationship involving both cooperation and conflict between Taishang and Chinese local governments – rival partners. Yet, one can regret that the Sino-Taiwanese political background is only alluded to in the introduction, when the author states that Taiwanese investors’ preferential treatment was granted for the sake of the United Front strategy towards Taiwan and its rent value was consequently derived from political status; therefore, the collective identity of Taishang depreciated at the height of cooperation between the Chinese Communist Party and the Kuomintang (p. 18). That said, as long as China maintains its objective of annexing Taiwan, Beijing's “business model as united front” toward Taiwan will not change (p. 19). It remains that the major and long-lasting contribution of this book is to dissect the contribution of Taishang to China's development trajectory.
