Taxation has been front and center in studies of state capacity and public finance. The Chinese state, however, has proven able to finance itself without building a full-fledged tax state. Instead, it has built a series of state monopolies. For the past quarter century, a state land monopoly has been central to China’s public finances. In my two-volume book project, I examine the origins and impacts of China’s state land monopoly, noting parallels with other “monopolist states.”
The first volume, The Monopolist State: Building China’s State Urban Land Monopoly, 1982-2005, shows that the central government was the driving force behind building China’s state land monopoly. Whereas the scholarly consensus has emphasized the importance of decentralized policy innovation during Reform and Opening, I lay out a model of Chinese political economy in which national leadership politics and its responses to economic crises drives change at the local level. Much as in monopolist states everywhere, the state bureaucracy was reorganized to repress competitors and extract profit by buying low and selling high. Conceptualizing China’s Reform and Opening as a period of state building rather than the product of a watered-down planned economy, this book challenges prevailing assumptions about the strength of the Chinese state.
The second volume, Addicted to Land, will examine how real estate expanded to dominate the Chinese economy. China’s economic growth model shifted abruptly from export-oriented manufacturing to real estate and infrastructure in the wake of the 2008 Global Financial Crisis. As in other monopolist states, state-society relations came increasingly to revolve around the state monopoly: a broad pro-real estate growth coalition emerged, spanning from local governments and bankers to homeowners and peri-urban villagers. Ultimately, a massive real estate bubble developed. The Chinese real estate bubble was unusual in two key respects: it persisted despite widespread recognition that it was a bubble and despite the persistent efforts of the government to rein in the bubble. This book explores why real estate remained the focus of the economy for so long, and asks why the real estate bubble finally did burst when it did.
These findings draw on nearly a decade of research. I collected detailed information on urban development in individual cities through interview, participant observer, and documentary research. I have also drawn extensively on published and internal government documents, as well as newly opened government archives. This eclectic methodological approach allowed me to construct a detailed political history of urban development in China that also sheds light on Chinese politics more broadly.
You can find an article-length version of my research on related topics here or here. Comments and suggestions are of course welcome!