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12 of 13 people found the following review helpful
5.0 out of 5 stars Comprehensive Analysis of Adaptive Informal Institutions in China, July 3, 2008
By 
Hubert Shea (Shanghai, China) - See all my reviews
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This review is from: Capitalism without Democracy: The Private Sector in Contemporary China (Paperback)
The book refutes the prevailing modernization theory that capitalism can lead to democracy. Findings from the study of private entrepreneurs in different regions in China supports Professor Tsai's proposition that the relationship between economic liberalism and political freedom is not definitely correlated.

Putting it in a nutshell, this book has contributed to three major findings in the study of political economy in China. First, economic liberalization in China since 1976 has not resulted in the emergence of democratic regime or the decline of the authoritarian state. According to Professor Tsai, private entrepreneurs in China are not nuts about democracy and researchers cannot view private entrepreneurs as a homogeneous class because of their diverse identities, interests, and values in politics. Second, widespread apathy amongst private entrepreneurs in China towards democracy does not mean that they have an acquiescent nature. They tend to adopt different coping strategies rather than instigate virulent opposition against the regime or demand regime transition when various formal institutions constrain their business activities. The so-called "coping strategies" result in a variety of "adaptive informal institutions" being established in different economic regions in China. Based on hundreds of in-depth interviews and nationwide survey of private entrepreneurs, Professor Tsai divides them into five key types; namely Wenzhou model, Sunan model, Zhujiang model, state-dominated model, and Limited development model. For instance, private entrepreneurs in Wenzhou engaged in a variety of innovative financing practices to set up and expand their businesses which were outside of the state banking system. Private entrepreneurs in Guangdong province sought to establish fake foreign enterprises in order to enjoy policy advantages including tax breaks and preferential access to land. Third, the near ubiquity of adaptive informal institutions becomes an endogenous force that has prompted the government to generate institutional change without regime change. However, such institutional change to react to the existence of adaptive informal institutions cannot be likely to become sources of democratization. Professor Tsai maintains that private entrepreneurs in China show no intention of agitating for democracy but capitalism can exist without democracy, provided that the Chinese government can attend to adaptive informal institutions that complement endogenous institutional change.

This book is highly recommended to readers who are interested in political economy and the development of private enterprises in China.
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4 of 4 people found the following review helpful
4.0 out of 5 stars Good Insights -, July 26, 2010
This review is from: Capitalism without Democracy: The Private Sector in Contemporary China (Paperback)
Conventional wisdom says that China's economic revival will eventually lead to democracy. Others see the rise of income inequality and increased corruption as rallying points. However, don't expect a "No taxation without representation" protest in China, says Tsai. The bulk of the book relies on over 300 interviews with Chinese entrepreneurs (peddlers to CEOs on the Forbes list of the wealthiest in the world), officials, intellectuals, and local bureaucrats over the 2001-2005.

Some of the outside hope for democracy is based on stores of private entrepreneurs helping out demonstrators at Tienanmen Square. Those instances, however, haven't grown or been sustained. Tsai believes that because Chinese entrepreneurs are such a diverse group (some were former farmers, others previously government officials) they will not likely unite on this issue. Further, they have proven much more likely to use informal channels for solving problems than the legal system or political participation. Only 5% regularly rely on more assertive modes of dispute resolution such as "appealing to local government or higher authorities" or "appealing through judicial courts."

Capitalists are now encouraged to join the CCP, and many have. Flexibility to overlook rules also relieves potential pressure for change from business people. Those with the resources to fund change, China's 106 billionaires, are diversifying overseas with both their investments and children's' education - eg. sending them to the U.S. with hopes that they will become white-collar professionals or government officials rather than continuing the family work as business owners.

The only movement that posed a potentially serious challenge to the regime was the short-lived China Democracy Party (CDP). In 1998 local party committees of the CDP were established in 24 provinces and cities. But authorities promptly detained, arrested, or exiled CDP leaders, which effectively thwarted further efforts to establish a central-level CDP. Similarly, the crackdown on Falun Gong in 1999-2000 and the repression of Tibetan protesters in 2008 provide compelling evidence that the CCP will control and eliminate political opposition.

Only 22% of Tsai's sample think the pace of reform in China has been too slow, while 51% think it has been just right.

Bottom Line: The belief that all regimes will at some point become liberal-democracies is a fantasy.
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5.0 out of 5 stars Very Satisfied.., November 1, 2014
This review is from: Capitalism without Democracy: The Private Sector in Contemporary China (Paperback)
received books as expected. Very Satisfied...
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4.0 out of 5 stars Four Stars, January 23, 2015
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This review is from: Capitalism without Democracy: The Private Sector in Contemporary China (Paperback)
Good!
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3 of 9 people found the following review helpful
5.0 out of 5 stars very good book, October 9, 2007
This review is from: Capitalism without Democracy: The Private Sector in Contemporary China (Paperback)
this book is a must read and goes in-depth into the emerging underground economy in China. I also recommend the first book Back-Alley banking by the same author.
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Capitalism without Democracy: The Private Sector in Contemporary China
Capitalism without Democracy: The Private Sector in Contemporary China by Kellee S. Tsai (Paperback - August 2, 2007)
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