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Variegated Capitalism, Chinese Style: Regional
Models, Multi-scalar Constructions
Jun Zhang
a
& Jamie Peck
b
a
Department of Geography and Program in Planning, University of Toronto, Sidney Smith
Hall, 5025B, 100 St. George Street, Toronto, ON M5S 3G3, Canada
b
Department of Geography, University of British Columbia, 1984 West Mall, Vancouver,
BC V6T 1Z2, Canada. Email:
Published online: 09 Jan 2014.
To cite this article: Jun Zhang & Jamie Peck (2014): Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar
Constructions, Regional Studies, DOI: 10.1080/00343404.2013.856514
To link to this article: http://dx.doi.org/10.1080/00343404.2013.856514
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Variegated Capitalism, Chinese Style: Regional
Models, Multi-scalar Constructions
JUN ZHANG* and JAMIE PECK
*Department of Geography and Program in Planning, University of Toronto, Sidney Smith Hall, 5025B, 100 St. George Street,
Toronto, ON M5S 3G3, Canada. Email: zhang@geog.utoronto.ca
Department of Geography, University of British Columbia, 1984 West Mall, Vancouver, BC V6T 1Z2, Canada.
Email: jamie.peck@ubc.ca
(Received April 2012: in revised form September 2013)
ZHANG J. and PECK J. Variegated capitalism, Chinese style: regional models, multi-scalar constructions, Regional Studies. The paper
explores tensions between the varieties of capitalism framework and the heterogeneous particularities of the Chinese case. Rather
than forcing the Chinese model into analytical boxes derived, primarily, from analyses of European and North American
capitalism, this complex formation more appropriately can be understood to exist in a triangular relationship with the two
conventional poles of varieties scholarship, the US-style liberal market economy and the German-style coordinated market
economy. Furthermore, the substantial degree of internal (regional) heterogeneity evident in the Chinese case calls into question
those models of capitalism that focus narrowly on institutional coherence at the national scale. Illustrating this point, a range of
sub-models of Chinese capitalism is examined: regional styles of capitalist development that remain distinct from one another,
and deeply networked into a range of global production networks, and offshore economies, just as they remain, to some
degree, distinctively Chinese.
Varieties of capitalism Variegated capitalism Chinese capitalism Regional development
ZHANG J. and PECK J.

ZHANG J. et PECK J. Le capitalisme panach la chinoise: des modles rgionaux, des approches multiscalaires, Regional Studies. Cet
article examine les tensions entre les diffrentes structures du capitalisme et les particularits htrognes du modle chinois. Au lieu
de cloisonner analytiquement le modle chinois, principalement partir des analyses du capitalisme europen et nord-amricain,
on peut comprendre juste titre que cette forme complexe fait partie intgrante dune relation triangulaire avec deux ples
typiques dtudes, savoir lconomie de march librale lamricaine et lconomie de march coordonne lallemande.
Qui plus est, le haut degr dhtrognit interne (rgionale) qui est vident dans le cas chinois met en cause les modles du
capitalisme qui mettent rigoureusement laccent surtout sur la cohrence institutionnelle lchelle nationale. Pour illustrer ce
point, on examine une srie de sous-modles du capitalisme chinois: des formes rgionales de dveloppement capitaliste qui
demeurent distinctes, les unes des autres, et profondment relies dans une srie de rseaux de production mondiaux, et des
conomies offshore, tandis quelles demeurent jusqu un certain point typiquement chinois.
Formes du capitalisme Capitalisme panach Capitalisme la chinoise Amnagement du territoire
ZHANG J. und PECK J. Kapitalismusvielfalt chinesischer Art: regionale Modelle, multiskalare Konstruktionen, Regional Studies. In
diesem Beitrag untersuchen wir die Spannungen zwischen dem Rahmen der Varianten des Kapitalismus und den heterogenen
Besonderheiten des Falls von China. Das komplexe Gebilde des chinesischen Modells lsst sich besser verstehen, wenn es nicht
in analytische Schubladen gezwngt wird (die sich in erster Linie aus den Analysen des europischen und nordamerikanischen
Kapitalismus ableiten), sondern vielmehr im Rahmen einer Dreiecksbeziehung mit den beiden konventionellen Polen der
Variantenforschung der liberalen Marktwirtschaft nach Art der USA und der koordinierten Marktwirtschaft nach deutscher
Art aufgefasst wird. Darber hinaus weckt das im chinesischen Fall sichtbare erhebliche Ausma von interner (regionaler)
Regional Studies, 2014
http://dx.doi.org/10.1080/00343404.2013.856514
2014 Regional Studies Association
http://www.regionalstudies.org
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Heterogenitt Zweifel an Kapitalismusmodellen, die sich eng auf institutionelle Kohrenz auf nationaler Ebene konzentrieren.
Zur Verdeutlichung dieses Punkts wird eine Reihe von Submodellen des chinesischen Kapitalismus untersucht: regionale
Stile der kapitalistischen Entwicklung, die sich weiterhin voneinander unterscheiden und eng mit verschiedenen globalen
Produktionsnetzwerken und Offshore-konomien vernetzt sind, whrend sie zugleich in gewissem Ausma charakteristisch chi-
nesisch bleiben.
Varianten des Kapitalismus Kapitalismusvielfalt Chinesischer Kapitalismus Regionalentwicklung
ZHANG J. y PECK J. Capitalismo variado, estilo chino: modelos regionales, construcciones multiescalares, Regional Studies. En este
artculo analizamos las tensiones entre el marco de las variedades del capitalismo y las particularidades heterogneas del caso de
China. Podemos comprender mejor la compleja estructura del modelo chino si, en vez de un anlisis analtico forzado por secciones
(que proceden principalmente del anlisis del capitalismo europeo y norteamericano), la entendemos como una relacin triangular
entre los dos polos convencionales de la investigacin sobre las variedades: la economa del mercado liberal al estilo de los Estados
Unidos y la economa del mercado coordinado al estilo de Alemania. Adems, el grado substancial de la heterogeneidad interna
(regional), evidente en el caso de China, cuestiona estos modelos de capitalismo que se centran exclusivamente en la coherencia
institucional a escala nacional. Para aclarar este punto, examinamos una serie de sub-modelos de capitalismo chino: los estilos
regionales del desarrollo capitalista, que siguen siendo diferentes entre s y enlazados a fondo en una serie de redes de produccin
global, y las economas extraterritoriales, que siguen siendo, en cierta medida, tpicamente chinas.
Variedades de capitalismo Capitalismo variado Capitalismo chino Desarrollo regional
JEL classications: O18, P10, P17, P21
INTRODUCTION: INSCRUTABLE
CAPITALISM(S)
The varieties of capitalism (VoC) approach arguably
represents one of the most signicant analytical inno-
vations in the eld of heterodox political economy in
the past two decades. Born out of critiques of one-
world, free-market visions of capitalism and neoliberal
triumphalism, the origins of the VoC approach were
shaped by normatively styled defences of the integrity
of the European social model of capitalism in the
face of incipient Americanization. It was these defences
of European capitalism, as a viable alternative to the US
model, that placed the question of variety on the table.
This question would inspire an increasingly sophisti-
cated analytical alternative to the presumptive universal-
ism of both neoclassical economics and orthodox
globalization thinking. VoC scholarship has progress-
ively elaborated the claim, rst, that there are in fact
multiple pathways to long-run economic competitive-
ness, and second, that institutionally distinctive national
capitalisms represent an enduring rather than a transi-
tory or residual feature of the economic landscape,
even under conditions of deepening global integration.
The VoC approach has been the locus of program-
matic efforts at the borderlands of political science, com-
parative political economy, economic sociology,
institutionalist economics and, more recently, economic
geography. Its accompanying stylized facts concerning
the idealtypical concepts of the liberal market
economy (LME), modelled on the United States, and
the coordinated market economy (CME), modelled
on Germany have since earned widespread currency.
Somewhat more provisionally, the VoC debate has
also secured a measure of mainstream support for the
(pro)position, at the same time a methodological
principle and an ontological plea, that spatial variations
in the form of capitalist development represent more
than merely contingent noise around some global
universal norm, and that neither are they sequential
stages on a Rostovian escalator towards convergent
modernization. Instead, they stand for durable, qualitat-
ive, in-kind differences that really matter not only for
theory but also for politics and policy. The VoC
school has duly advanced the claim that institutions
matter in the development and differentiation of capital-
ism, since it calls attention to the ways in which econ-
omic behaviour (principally, of rms) is conditioned
on ensembles of institutional norms, incentives and con-
straints which are seen to cohere at the national scale.
In this respect, it also stakes an implicit claim that geogra-
phy matters, at least in terms of the conventional spatiality
of national institutional architectures, national economic
performance, national histories of development and so
forth.
PETER HALL and DAVID SOSKICEs signature contri-
bution, Varieties of Capitalism(2001b) which rened the
prevailing analytical framework, advancing a particular
style of rm-centric political economy and stabilizing
the LME/CME binary, around which variety would
be patterned in a bipolar fashion can be seen, in retro-
spect, as an inection point in the evolution of the VoC
research programme. The preceding decade of the 1990s,
when the programme rst developed, had been one in
which varieties scholarship were relatively eclectic, plur-
alist and open-ended, reecting a series of institutionalist,
regulationist and sociological currents (HOLLINGS-
WORTH and BOYER, 1997; COATES, 2000). The pro-
jects second decade, however, has not proved to be
one of consolidation, but instead one of diffusion and
even dissent. Some have pursued the HallSoskice path
towards rational-choice formalism, while the heuristics
2 Jun Zhang and Jamie Peck
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of LME- and CME-style capitalism have passed into the
mainstream; on the other hand, the principles and prop-
ositions of the VoC approach have been subjected to
intensifying rounds of critique some constructive,
others less so. Eclecticism remains a feature of the VoC
research programme, which has witnessed creative
attempts to initiate discussions around new registers of
variety at the regional and sectoral levels (CROUCH
et al., 2004, 2009; CROUCH and VOELZKOW, 2009b),
around forms of discontinuous institutional change
(THELEN, 2012), and around the balance of (enduring
and new) commonalities in capitalist restructuring
across varieties (STREECK, 2011). This said, there are
unresolved questions around whether the original
varieties framework should be reformed or replaced.
The purpose in this paper is not to revisit these
debates (HALL and SOSKICE, 2003; DEEG and
JACKSON, 2007; PECK and THEODORE, 2007;
STREECK, 2011), but rather to explore the issues of
capitalist variety, diversity and variegation purposively
beyond the usual tolerances of the VoC conversation.
It seeks to extend the discussion critically in two ways:
in spatial and scalar terms. Spatially, the paper confronts
the often confounding question of Chinese capitalism, a
self-evidently signicant case that has nevertheless
remained largely beyond the reach of most VoC
accounts, at least until recently. As will be shown
below, the Chinese case stresses received notions of
both capitalism and variety. In scalar terms, the dramati-
cally uneven development of the Chinese economy, the
less-than-transparent complexities of centrallocal
relations, and the geographically variable connections
that have evolved between the countrys numerous
regional capitalisms and the globalizing complex of off-
shore markets, supply chains and regulatory regimes calls
seriously into question received understandings of
variety that privilege, a priori, the national scale.
Accordingly, this paper rst explores how the Chinese
case has been handled within VoC scholarship,
moving on to problematize the variegated nature of
Chinese capitalism. The paper then turns to a more
grounded analysis of Chinese capitalism(s), distinguish-
ing for illustrative purposes some of its more notable
regional formations and commenting on the shifting
forms of uneven geographical development in which
these are embedded. The paper concludes with a discus-
sion of Chinese capitalism as a relational construct.
THE LIMITS OF VARIETY: VARIEGATED
CAPITALISM AND THE CHINESE CASE
If the foundations of the VoC approach were forged in
the context of a certain normative afnity with the
European social model of capitalism, at the same
time it has always oscillated around the conspicuous
alternative on the other side of the Atlantic, and the
American way of relatively liberalized capitalism. This
elemental, transatlantic distinction would nd its most
parsimonious expression in HALL and SOSKICEs
(2001a) stylized contrast between the LME and CME
models, which effectively reduced capitalist variety to
a bipolar universe, winnowing down difference to the
straitened and relatively orthodox terms dened by
the LME (as an institutionalized form of a highly
liberal, almost textbook neoclassical market economy)
versus a more regulated other (derived from a mash-
up of the Western European, Scandinavian and Japanese
economies). In principle this dened a continuum,
though in practice it was argued that intermediate pos-
itions were less viable, as a combination of institutional
complementarities and competitive synergies would
tend to drive national capitalisms towards one or other
of the two poles. In this two-solitudes vision of capital-
ism, the LME world revolves around market logics,
contractualized and competitive relationships, and
short-term price signals, while CMEs are spaces of
social coordination, negotiated settlements and strategic
partnerships. Conventionally, the two models are pre-
sented in idealtypical terms and rendered plausible
with illustrations from the US-American or German
economies respectively (JESSOP, 2012, p. 221).
The now-voluminous VoC literature is largely com-
prised of national case studies, typically framed in hori-
zontal comparison with other national models, and
focused both on formal economic institutions (formally
associated with wage setting, education and training,
nance, etc.) and conventional measures of economic
performance (such as gross domestic product (GDP)
and employment). Within the mainstream VoC litera-
ture the outcome is usually an afrmation of received
categories of capitalism, albeit in more institutionally
granulated form, punctuated by occasional interventions
that seek to transcend methodological dualism, stretch-
ing or reworking the grid of difference itself (see,
especially, WHITLEY, 1999; SCHMIDT, 2002;
AMABLE, 2003; CROUCH, 2005a, 2005b; BECKER,
2009; CROUCH et al., 2009). Perhaps surprisingly,
China has rarely warranted much of a mention in this
literature, either as a case or even as an offshore presence,
until quite recently. It has been as if China along with
a range of other, more distant relatives of European and
American capitalism, such as those of Latin America,
South Asia and Africa were located off the grid of
capitalist difference itself.
The more recent round of Chinese applications of
the VoC framework has been creative and often sugges-
tive, but it has tended to yield inconsistent, if not diver-
gent, conclusions. The internal heterogeneity, cultural
complexity and sheer size of the Chinese economy
have of course long confounded imported theories,
lending credence to what has been an equally long tra-
dition of sui generis accounts of this ostensibly peerless
model. No surprise, then, that Chinese capitalism routi-
nely seems to exceed and exhaust the classicatory reach
of the VoC framework, which at its most elemental
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 3
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travels as a 2 5 analytical matrix: the CME and LME
ideal types dene the primary axis, while the dimensions
of difference are conventionally reduced to ve politi-
caleconomic realms: corporate structure; nancial
system; education and training regime; industrial
relations; and inter-rm relations. Encountered in
these terms, the Chinese variety of capitalism has
proved to be rather predictably difcult to place, an
intractably odd case that frustrates most readily avail-
able analogies by virtue of an apparent capacity to
creat[e] its own model of development (WITT, 2010,
p. 3; MCNALLY, 2006, p. 16; FLIGSTEIN and
ZHANG, 2011, p. 59; CONL, 2011). It would seem
that this globally signicant Asian case cannot be
squeezed into the boxes conventionally derived from
VoC analysis, boxes that have been largely dened
(and rened) mostly with reference to transatlantic
capitalisms.
Issuing all the appropriate caveats, WITT (2010)
endeavours to locate China on the CMELME axis
for each of the ve politicaleconomic domains priori-
tized in VoC analysis, positioning the country closer to
the LME pole on four, but nding its highly distinctive
nancial regime to be effectively unclassiable in these
terms. His conclusion, that China should be regarded
as a quasi-LME, is far from a casual one, drawing as it
does on a deep knowledge of Chinese business
systems (WITT, 2010; REDDING and WITT, 2009),
but it was one that in a parallel analysis, no less attentive
to either VoC criteria or the challenging specicities of
the case, has been safely reject[ed] (FLIGSTEIN and
ZHANG, 2011, p. 49). FLIGSTEIN and ZHANGs
(2011) contradictory conclusion diverges along the pri-
vileged axis in VoC analysis towards the kind of CME
economy awkwardly exemplied, in this instance, by
France. Dismissing the commonplace contention that
China is on a trajectory of market liberalization,
marked by gradually receding governmental roles,
they seek instead to place the Chinese model in the
CME camp, while recognizing that th[is] idea of orga-
nized or illiberal capitalism is more diffuse (p. 49).
With the assistance of conventional VoC categories
and institutionalist analytical manoeuvres, Witt, and
Fligstein and Zhang are able to rationalize the placement
of Chinese capitalism at opposite ends of the established
LMECME spectrum. Presumably, either the case is
being misread in one of these treatments or the axial
dimension of capitalist difference favoured in VoCscho-
larship is insufcient in this instance. This need not be
grounds, however, for pre-emptively dispensing with
the VoC approach. For his part, MCNALLYs (2006,
2007, 2008) varieties-style treatment of the Chinese
case is less conclusive but perhaps more constructive.
McNally works more exibly and creatively with
VoC categories in order to explore the constitutive
components of the Chinese model, understanding
that this will likely exceed the constraints of the
CMELME continuum. Nevertheless, he also
demonstrates the utility of an augmented comparative-
capitalist framework, for example, by exploring the con-
tinuities and discontinuities between the Chinese model
and East Asian developmental states. A companion
paper makes the argument that the problematics of
comparative capitalism, if not necessarily all the tools
associated with VoC-style institutionalism, raise provo-
cative and signicant questions about the Chinese tra-
jectory, its system integrity at the national scale and
its (changing) location within the evolving world
system (PECK and ZHANG, 2013).
A provisional conclusion might be that while the
comparative grid associated with orthodox VoC
studies can provoke important questions (for instance,
concerning the role of nancial governance and
labour regulation, and the synergies between them), its
received categories are unnecessarily restrictive if they
are forced into a simple form of binary alignment,
leading ultimately to a monochrome diagnosis. Cases
like China, which do not seem to t the black-and-
white distinctions between the LME and CME ideal
types, are likely either to be misconstrued or to be side-
lined as sui generis exceptions if the varieties sensibility is
deployed unreexively. It is possible that not even
shades of grey will sufce; some cases should prompt a
revisualization of the spectrum itself.
Some might interpret this as a licence for retreat into
exceptionalist, bottom-up or empiricist interpretation,
perhaps under the ample cover provided by the recur-
ring alibi that to press even a comparative capitalist analysis
in such a situation is once again, to borrow SAICHs
(2002, p. 99) words, like trying to t Chinese empirical
pegs into Western theoretical holes. With FLIGSTEIN
and ZHANG (2011), however, it is maintained here
that the idiosyncrasies of the Chinese case should not
render it immune from theorization, but there are reser-
vations about whether even a reformed VoCapproach is
equal to this task (PECK and ZHANG, 2013). Instead, a
potentially more protable line of enquiry can build
on emergent conceptions of variegated capitalism (PECK
and THEODORE, 2007; JESSOP, 2012), which privilege
the relational analysis of unevenly developed multi-
scalar and polymorphic capitalism over the search for
institutionally stabilized system integrity at the national
scale, and which hold elements of connectivity and
commonality across capitalism(s) in creative tension
with the search for geographical divergence and differ-
ence. Complementing an earlier paper that was con-
cerned with the reconstitution of Chinese capitalism at
the nationalglobal scales (PECK and ZHANG, 2013),
the present paper begins to elaborate a cross-scalar
interpretation of the variegated capitalism approach,
grounded in the tradition of geographical political
economy (PECK and THEODORE, 2007; MACKINNON
et al., 2009; SHEPPARD, 2011). Distinctive from,
although not diametrically opposed to, the VoC tra-
dition, some pertinent features of the variegated capital-
ism approach are summarized in Table 1.
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The variegated capitalism approach adopted here chal-
lenges VoCs methodological nationalism, with its
reliance on static and horizontal comparisons
between ostensibly self-contained entities competing
on (near) equal terms (PECK and THEODORE, 2007).
Conventional VoC approaches pay insufcient atten-
tion to what might be called the constitutive outsides
and insides of national capitalisms, the national being
the privileged scale at which coherence is sought
(and generally found). Substantively, this work has
made important contributions, but it also displays a
certain myopia in failing to take account of other
scales. The fact that some forms of capitalism (such as
export-dependent or highly nancialized systems) are
effectively predicated on others means that national
models, far from being autonomous and endogenously
driven, are actually co-dependent on other capitalisms,
indeed on other models. Furthermore, national patterns
of capitalist development internalize characteristic forms
of uneven geographical development, in regulatory as
well as socioeconomic relations, that are integral to
their very character. Regional capitalisms, in this sense,
are not just Russian doll-style mesocosms of a national
model; they display a spectrum of partwhole relation-
ships with the aggregate that is the national economy,
not to mention distinctive modes of connection with
transnational economies. Finally, the presumption of
tendential (institutional) coherence may be (increas-
ingly) out of step with the revealed dynamics of net-
worked, globalizing capitalism, if not an artefact of the
Atlantic Fordist pattern of development (cf. PECK and
MIYAMACHI, 1994).
None of this should be a licence for dismissing the
national as a scale of economic regulation and political
action, but it is to insist that national roles, functions
and institutional ensembles must be understood in
those multi-scalar terms through which they are pro-
foundly co-constituted. A predominantly national
optic, in which the sub-national appears as an hom-
ogenous surface while the offshore world is also strictly
demarcated, edits out far too much of the actually exist-
ing variegation in that unevenly developed capitalist
system that is, after all, the object of enquiry. And it sup-
presses both global and local dynamics in the face of
much that has been leant about the emergent spatialities
of capitalism (e.g., SCOTT, 2006; STORPER, 1997). It is
reiterated here that VoC approaches are not at fault for
taking the national scale seriously in substantive terms,
but their limitations are exposed when this scale is
granted an implicit explanatory monopoly and when
this restrictive methodological gaze throws other
forces and formations, and other politicaleconomic
processes, out of focus not least at the regional and
global scales.
Recent developments in VoC scholarship have
begun to move away from methodological nationalism,
recognizing the necessary incompleteness and partial
incoherence of national institutions, while adopting a
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Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 5
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less deterministic view of institutions (DEEG and
JACKSON, 2007; CROUCH and VOELZKOW, 2009b).
Eschewing the conceptual rigidity of the dualist
approach, CROUCH (2005a, 2005b) prefers to see
empirical cases as amalgams of ideal types, rather than
standing (in) for those types. He duly renes the govern-
ance approach developed by Rogers Hollingsworth and
other neo-institutionalists (e.g., HOLLINGSWORTH and
BOYER, 1997; HOLLINGSWORTH et al., 1994), which
has identied six ideal types of governance mechanisms
for coordinating transactions markets, (corporate)
hierarchies, states, associations, networks and commu-
nities all of which are recognizable in real contexts
and in particular (re)combinations. CROUCH et al.
(2009) further argue that large and small rms in
various localities and sectors are enveloped by a different
array of institutional layers (national, local, sectoral,
world-regional, global and others), which itself tends
to prompt a series of organization problems and
actions. From this perspective, a national system is no
longer solely comprised of those institutions established
at the national scale, but the panoply of institutions at
multiple scales to which domestic rms have access.
Relatedly, institutions are seen as frequently the
product of conscious design and political struggle,
rather than spontaneous, functional evolution, as
assumed by the complementarity thesis (cf. AMABLE,
2003; DEEG and JACKSON, 2007). Firms and other
actors, conceived here not only as rule-takers but also
as rule-makers, may move to establish a range of novel
(and sometimes incoherent) governance structures,
diverging from the national model but nevertheless
suiting their own needs (CROUCH and VOELZKOW,
2009a). Incoherent institutions, however, are not
necessarily counterproductive but can be even creative
because it is not only by conforming to, but sometimes
by diverging from, national institutions that companies
and localities can gain competitive advantage and
prosper (CROUCH et al., 2009). When internal diversity
produces a loose coupling of different institutional
spheres, autonomous subsystems and governance struc-
tures on the sectoral and/or local level become possible
(CROUCH and VOELZKOW, 2009a, p. 6).
Such explorations of regional and sectoral VoC have
begun to open up new horizons for analysing capitalism
(s) at sub-national scales. In this respect, they begin to
complement characteristically multi-scalar approaches
to variegated capitalism. This said, a number of differ-
ences and indeed tensions remain. VoC approaches
remain closely tied to the business literature, echoing
its concern with economic competitiveness and techno-
logical innovation, and tend also to treat regions and
nations as (relatively) separate entities. Variegated capit-
alism approaches are generally devoted to explaining
spatially uneven development and polymorphic capital-
ism(s), rather than uncovering economic competencies
of discrete territories. The analytical focus is therefore
placed more on the co-dependence, co-constitution
and co-production of multiple capitalist formations,
rather than identifying best practices associated with
singular modal cases. Furthermore, a dening feature
of variegated capitalism approaches is an emphasis on
multiscalar rather than monoscalar forms of analysis.
This is not a receipt simply for replacing the national
gaze of the VoC approach with an emphasis on suppo-
sedly universal or convergent global logics, nor for
decomposing these into a multiplicity of regional
models. Multiscalar approaches are not merely additive
in the sense of adding to national-scale analyses; they
open up relational questions concerning how, for
example, regional-capitalist formations are, at the same
time, reciprocally embedded in national regimes and
constitutively connected to offshore economies and net-
works. These approaches consequently emphasize the
mutual interdependencies and cross-case connections
between national and local economies, rather than
privileging the separatist analysis of endogenous ration-
alities and internally coherent systems (at whatever
scale).
While the VoC literature has come to incorporate an
increasingly sophisticated reading of national and inter-
national political economy, it retains methodological
commitments to system integrity, coherence and equili-
brium. Even CROUCH and VOELZKOWs (2009a)
examination of creative incoherencies tends to treat
these as temporary and sporadic deviation from
general equilibria, while considering regional deviation
(s) from dominant national institutions as the exception
rather than the rule. Variegated capitalism approaches,
in contrast, place more emphasis on contradiction and
disjuncture than on any presumed tendency towards
(nationally scaled) institutional equilibrium. Their inves-
tigation of macro logics, rationalities, and institutiona-
lized conjunctures, does not privilege coherence per
se, but also calls attention to the presence of sources of
enduring conict and contradiction, and to the political
(mis)management of these conditions. It follows that the
variegated capitalism problematic is concerned with
cross-cutting and connective processes, such as those
associated with corporate integration, nancial disci-
pline or neoliberalization, not only as incipient logics
of unidirectional convergence, but as unevenly realized
tendencies and programmes of restructuring with vari-
able (and contested) outcomes. The conjunctural posi-
tioning and extra-local embeddedness of local
economies and localized practices assumes a particular
importance here.
Last but not least, while sharing with neo-institution-
alists the overarching objective of theorizing relatively
durable territorial economic patterns and dynamics, var-
iegated capitalism approaches move beyond institution-
alism. Territorial economic structures are considered as
co-evolutionary with, rather than determined by, insti-
tutional arrangements (SCHAMP, 2010). The evolution-
ary development of rms and industries is seen to unfold
across an historically inherited geographic surface
6 Jun Zhang and Jamie Peck
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unevenly endowed with tangible and intangible
resources, itself the sedimented outcome of cumulative
rounds of investment and politically mediated insti-
tutional building, both of which are tied to the historical
layering of social conicts and contestations locally and
across space (MASSEY, 1984, pp. 122123).
To summarize, in contrast to the methodological
parsimony and formulaic systematicity of the VoC para-
digm, variegated capitalism approaches are more likely
to be disruptive and dissenting in orientation, to empha-
size contradiction over coherence, and to be generally
resistant to rigorous codication. Differences and diver-
gences from VoC conventions can be seen as a source of
creative tensions; there is arguably much to be gained
from economicgeographical engagements with VoC
problematics, even as this is unlikely to lead to uncritical
adoption (PECK and THEODORE, 2007; DIXON, 2011;
PECK and ZHANG, 2013). It is in this spirit that this
paper engages here with the manifestly awkward case
of Chinese capitalism, holding evidence of its multi-
scalar dynamics in tension with more conventional
VoC formulations. Codifying the somewhat emergent
variegated capitalism rubric, whether in its own terms
or in extended conversation with the VoC tradition,
amounts to a programmatically ambitious agenda, need-
less to say. The present paper represents a hopefully
indicative step in this direction. Its focus, in the
context of this broader project, is a preliminary explora-
tion of what might be considered to be regional sub-
models of Chinese capitalism. In turn, this opens up
questions of sub-national variability and divergent
regional development, which have understandably
been marginal to the concerns of VoC scholars, but
which have important roles to play in the articulation
of variegated capitalism approaches.
CHINESE CAPITALISM AS A VARIEGATED
FORMATION
The objective in the remainder of this paper is to
explore what might be termed the patterned heterogeneity
of the Chinese model of capitalism. This is done not in
the interests of denying all forms of integrity, connec-
tivity or coherence in the national model of Chinese
capitalism, or with the intention of deconstructing this
model to the point of disintegration. Rather, as a comp-
lement to substantive, national scaled analyses of
Chinese capitalism (PECK and ZHANG, 2013), the
paper sets out here to explore what is seen as some of
the most pertinent sources and dimensions of variation
within and beyond this national model, focusing speci-
cally on regional sub-formations of capitalism and
their (constitutive) extra-local connections. It is reiter-
ated here that these do not represent autonomous or
free-oating phenomena, detached from the national
model, but neither are they merely smaller-scale ver-
sions of that model. Rather, what is understood by
Chinese capitalism has been jointly constituted with
a range of regional models of capitalism; it has been
constructed through particular patterns and processes
of uneven spatial development, which can themselves
be understood to be internal to the model, indeed
important characteristics of that model. Exploring
regional formations of Chinese capitalism is not, there-
fore, simply a matter of picking holes in, or highlight-
ing exceptions to, the national model, it is part and
parcel of understanding the (constitution of the)
model itself. For the future of this model is likely to
be shaped by the (inherently unpredictable) politics
and competitive interplay of these regional formations.
To take one example, the rise and (possible) fall of the
Chongqing model qua model is a case in point (THE
ECONOMIST, 2012c), which is discussed further
below. The Chongqing model was promoted not
only as a symbol of Western reindustrialization, but as
a renovated form of socialist-developmentalism,
married to the globalizing market economy. While
this was never simply reducible to the political personal-
ity of Bo Xilai, the scandal-drenched collapse of his
administration can itself be read as a revelation of the
intrinsic uncertainty surrounding the trajectories of
Chinese capitalism, given the erce but opaque political
struggles that have long characterized the upper eche-
lons of its party-state system. As one pole of Chinas
polycentric development model, some remnant form
of the Chongqing paradigm seems likely to persist. If
one thing is predictable, in this context, it is perhaps
that no singular model will predominate in this vast
and unevenly developed economy. Political perceptions
and ideological representations of these models also
clearly matter, such that the discursive realm is also a
site of continuing struggle over the meaning of
Chinese capitalism.
With this in mind, the point of departure is the
(somewhat fraught) conception of the national model
itself, which for heuristic purposes is provisionally posi-
tioned alongside the LME and CME models established
in VoC scholarship. This discussion is followed by a
more grounded exploration of ve of the more distinc-
tive regional sub-models of Chinese capitalism, each of
which for expositional purposes is tagged with a geo-
graphical signier: Guangdong, Sunan, Wenzhou,
Zhongguancun and Chongqing (Fig. 1). Of course,
the development styles and trajectories that characterize
these sub-models are hardly exclusive to the regions in
question, but they do nevertheless nd distinctive
expressions there. And for present purposes, they call
attention to what is regarded here as some of the
more pertinent dimensions of regional differentiation
within the Chinese model of capitalism. So for present
purposes is not to anoint one or other of these regional
formations as an ascendant national model in waiting,
but instead to open up the question of extra-national
variegation, since the local character of each of the
ve models is in turn related to what are unique relative
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 7
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positions both within the domestic political sphere and
with respect to global production chains and trade con-
nections. Before sketching the regional models them-
selves, this section begins with the still-intractable
question of Chinese capitalism.
Chinese capitalism: between variety and variegation
Attention has been drawn here to some of the problems
associated with attempts to position China on the singu-
lar LMECME axis, as if the Chinese case could be
located somewhere between Germany and the
United States. Without making such a presumption,
for heuristic purposes some of the distinctive features
of Chinese capitalism, relative to the stylized models
of the CME and LME, are highlighted in Table 2. Posi-
tioning the Chinese model, in effect, as a category of its
own enables a rudimentary form of triangulation
between the two well-documented models from the
VoC literature and this rather disruptive case. It also
allows some of the dimensions of capitalism with
Chinese characteristics to be highlighted in their own
terms, rather than as derivatives of received, LME- or
CME-style formulations, since in some respects the
Chinese case really does appear to be hors catgorie,
effectively beyond conventional categorization. On
the other hand, it could be argued that there is intrinsic
value in placing Chinese capitalism in a comparative
frame, as well as in interrogating, stress-testing and revis-
ing the VoC framework across such terrae incognitae.
Rather than reiterate the specic contents of Table 2,
it is opted instead to draw four lines of notable distinc-
tion. First, with respect to the pattern of industrial
relations, labour unions are neither systemically strong
(as in the German/CME model of stakeholder nego-
tiation), nor weak (as in the LME/US model of
market-disciplined marginalization), but different:
unions operate with the consent of the Chinese Com-
munist Party (CCP), playing roles in workplace legiti-
mation and the channelling (or containment) of
conict, while generally lacking industrial muscle and
independent sources of bargaining power (PRINGLE,
2011). At the same time, the Chinese system of indus-
trial relations is marked by a volatile combination of
repression and restiveness.
Second, the education and training system is neither
strongly institutionalized, along the lines of the voca-
tionally oriented German model, with its emphasis on
advanced technical competence, nor is there a well-
developed, market-based model, as in the United
Fig. 1. Sub-models of Chinese capitalism
Source: Authors
8 Jun Zhang and Jamie Peck
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States; rather, Chinas traditionally rather fragile system
has been developing apace, under varying degrees of
state control and market exposure, while in many
areas seriously lagging fast-moving patterns of demand
at the enterprise level (where on the job training is
uneven at best), causing endemic problems of skill short-
age and mismatch (LI et al., 2011b).
Third, with respect to inter-rm relations, there is a
pattern of heterogeneity that arguably exceeds the tol-
erances of both the LME and the CME models, since it
spans conditions of extreme competitive exposure (in
some export sectors) to effective state control (in
pillar industries of strategic importance), while there
is also extensive recourse to interpersonal, guanxi net-
works in both commercial and governmental trans-
actions, in a form (and on a scale) largely absent from
the LME and CME models (REDDING and WITT,
2007). One-sided characterizations of the Chinese
model as state capitalism or guanxi capitalism, or
even as suppressed/insurgent laissez-faire, consequently
misrepresent what is a constitutively heterogeneous
system.
Fourth, the Chinese form of corporate governance
and nancing is also a diversied one, with state-
owned banks playing major roles, alongside a heavy
presence of foreign investors and rapid growth in over-
seas stock market listing, a bundle of characteristics that
again is quite distinctive from the stakeholder/patient
capital tradition in many CMEs, as well as from the
shareholder-value model more typical of Anglo-
American capitalisms (KANG et al., 2008).
Such is the idiosyncrasy and heterogeneity of the
Chinese model not to mention its multidimensional
patterns of transformation, which are hardly American-
izing or Europeanizing in any sustained or generalized
sense that its sprawling hybrid form repeatedly exceeds
and confounds the bounded coherence assumed in
orthodox readings of the LME and CME models,
while hardly sitting comfortably, either, in any inter-
mediate position in between. Of course there are
echoes of foreign forms of capitalism in China, just as
there is evidence of neoliberalizing models of develop-
ment, but these more familiar features are often
found in unusual combinations, sometimes coexisting
with (notionally) antithetical forms, like heavy-handed
bureaucracy and political corruption. Ironically, while
the Chinese model sits awkwardly with the supposedly
functional ideal types of the LME and CME, according
to many measures it has recently been out-performing
both. It may work, however, largely despite itself
despite the tensions and contradictions emanating
from an unlikely marriage between export-oriented
capitalism and the authoritarian rule of the party-state,
between resilient forms of state control across key
sectors of the economy and the pattern of liberalized
foreign investments and transnational engagements
enabled by the open-door policy, and between blister-
ing rates of urbanization and the enduring legacies of
what remains largely an agrarian society (PECK and
ZHANG, 2013). If this is a model, it is one capable of
containing a wide array of ostensibly contradictory fea-
tures, and one that has repeatedly frustrated attempts of
simple categorization let alone functional essentializa-
tion. Coherence does not seem to be a notable feature.
Accounting for the Chinese model, in all its actually
existing complexity, means confronting these many idio-
syncrasies and paradoxes, along with what are enduring
sources of internal heterogeneity, rather than importing
what may, after all, be somewhat ethnocentric interpret-
ations of institutional coherence at the national scale. In
the Chinese case, of course, literal scale is also an issue: in
population and, increasingly, in GDP terms, China now
dwarfs most of its competitors. The combination of the
vast, continental scale of its economy in some respects
closer to sub-global than conventionally national
and correspondingly high degrees of internal heterogen-
eity clearly contributes to Chinas well-known
inscrutability in the face of (Western) attempts at classi-
cation. The clich that there are many Chinas may
consequently hold the greater truth. While some parts
of the country boast development indicators comparable
with those of Sweden and Singapore, there are others for
which the analogy of Sudan or Honduras is more appro-
priate (cf. HEILEG, 2006). Global rates of inequality and
differentiation are therefore internal features of Chinese
capitalism, as Fig. 2 illustrates. How might these differ-
ences be approached more systematically?
Recent neo-institutionalist work is beginning to
explore the coexistence of variable state and business
forms within China. CONL (2011), for example, por-
trays China as a complex system internalizing a core
component, based on a dominant developmental state,
along with two peripheral sub-systems each governed
by business-corporatist states, one marked by a relatively
passive involvement in economic development and the
other more collaborative in form. In order to develop a
taxonomy of Chinas regional models, he further ident-
ies three institutional layers according to geographic
proximity and functionality: a macro-regulatory frame-
work consisting of competition policy, intellectual
property rights and industrial policy; a meso-layer gov-
erning the markets for rms knowledge, labour and
capital inputs; and a complex of private networks, at
the micro-level, providing rm-specic input factors.
Accordingly, Conl classies Chinas sub-national
models on the basis of region-specic state functions
and network congurations.
In a parallel vein, the starting point for understanding
the spatial heterogeneity of Chinese capitalism is the
scale and diversity of the countrys industrial economy.
This can be characterized as a three-tier structure
rather than a monolithic whole (ERNST and NAUGH-
TON, 2008). The rst tier comprises large, monopolistic
state-owned enterprises (SOEs). Accounting for around
one-third of GDP, SOEs dominate basic and strategic
industries like power and energy supply, resource
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 9
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Table 2. Comparison of coordinated and liberal capitalisms with the Chinese model
Coordinated market economies Liberal market economies A Chinese variety of capitalism?
Industrial relations Coordinated of wage determination across key industries (involving
employer associations and unions)
Employee-elected bodies and representative bodies play key roles in
company decision-making
Company-based, uncoordinated wage bargaining
Institutionally weak unions with limited
workplace presence
Company-based, uncoordinated wage bargaining
Party-controlled unions
Sharp urbanrural divide
Education and training Strong systems of vocational education and training, with stakeholder
involvement
Limited post-compulsory/higher education
Market-oriented; weak systems of vocational
training; limited company involvement
Strong post-compulsory/higher education
Emphasis on general skills, weak vocational training; skills
mismatches
Low enrolment rates in further and higher education
Brain drain/circulation
Interrm relations Consensus-based standard setting
Business associations regulate relational contracting
Close relations between business associations and research/education
institutions
Mitigated of competition in domestic markets; open competition in
export markets
Market-based standard setting
Strong anti-collusion policies
Underdeveloped institutional framework for
technology diffusion
Weakly regulated relational contracting
Managed competition in strategic technological sectors
favouring national champions
Foreign dominance and open competition in export-
oriented sectors
Dominance of family and guanxi networks, plus patron
client ties, in private economic coordination
Weak legal enforcement and limited protection of
intellectual property rights
Corporate nancing
and governance
Stable stakeholder arrangements, with banks playing a monitoring role
Reluctance to nance higher risk ventures and technologies
Industry-based monitoring
Hostile takeovers difcult
Unstable shareholder arrangements
Orientation to higher risk capital markets
Hostile takeovers permitted
Corporate nancing dominated by state-owned banks
Financially starved private rms coexist with spoiled
state-owned enterprises
Soaring overseas stock market listing of domestic rms
Large-scale foreign direct investment in technologically
advanced sectors
Examples Germany (paradigmatic case); Japan, Austria, Switzerland, Italy,
Belgium, the Netherlands, Denmark, Sweden and South Korea
United States (paradigmatic case); UK,
Canada, Australia and New Zealand
China (extra-paradigmatic case)
Source: Adapted from PECK and ZHANG (2013).
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extraction, media and telecommunications, transpor-
tation, construction, and banking. The SOEs, which
exemplify the traditional big-is-better model of indus-
trial organization, have the benet of ready access to
state-owned bank nancing, in addition to dense webs
of political connectivity. The second tier consists of
mostly medium-sized rms operating in competitive
markets, albeit exhibiting diverse forms and origins:
Fig. 2a. Internal worlds of Chinese capitalism
Source: Authors rendering of data from THE ECONOMIST (2013)
Fig. 2b
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 11
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this group includes foreign-owned companies, smaller
players in the state sector, domestic Chinese start-ups
and their many hybrids. The high-technology com-
ponent of this sector, which often with close ties to
local politicians and collaborative links to foreign
rms, represents one of the most dynamic parts of the
Chinese economy today. Finally, the small-scale sector
forms a third tier, with a plethora of mostly privatized
township and village enterprises (TVEs) and small
family-run private rms, most of which occupy
Fig. 2c
Fig. 2d
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relatively low technology, labour-intensive sectors.
These various tiers are characterized by different owner-
ship forms, sources of nance and patterns of labour
utilization.
Since the late 1970s, the Chinese economy has
experienced an unprecedented wave of privatization
and liberalization, yet its industrial system remains in a
process of dynamic evolution. It could be argued,
however, that the Chinese economy has exceeded a
series of critical thresholds such that it can now be
reliably referred as a form of capitalism, even if not
one of the standard ones (PECK and ZHANG, 2013).
The tripartite system has become more or less stabilized
under the existing political regime, itself reecting a
unique marriage of a single-party Leninist state and an
escalating programme of market reforms. The ruling
party has maintained a precarious balance of economic
openness and political control, so far, by way of a
sprawling web of nancial relays and patronage relations
(NAUGHTON, 2008). Chinas almost peerless marriage
of political continuity and transformative economic
change positions the country as an idiosyncratic case in
the global family of capitalisms, but it also means that
this is something of an outlier in the cluster of post-
socialist transition economies (LANE, 2007), since
China has not been subject to shock treatment or struc-
tural adjustment, while its ruling elites have fashioned
their own version of transitology quite different from
those developed in the Soviet Bloc.
This distinctive economic system has evolved in
concert with, while also contributing to, the deep geo-
graphical divides found in China, between urban and
rural areas, and inter-regionally. The historically sedi-
mented and regionally uneven pattern of industrial
development has been further reinforced by durable
regional disparities in the distribution of key resources
(in terms of universities, research institutions, and
human capital), as well as a pattern of highly variable lin-
kages to the outside world. The Chinese inter-regional
system is thus characterized by immense, enduring dis-
parities many of which are still widening in
natural endowments, industrial structures, living stan-
dards, educational attainment, technological capacities,
market orientations, capital intensity, investment pat-
terns and exogenous connectivity (ZHOU et al., 2011).
These geographical divides have been the drivers of
massive migration ows for several decades now, on a
scale unprecedented in human history (FAN, 2008),
out of regions of rural poverty and into the high-
growth zones, especially the major cities and the indus-
trialized belt along the south-eastern seaboard, although
the global crisis initiated return ows on a large scale
(ZHANG, 2014). When China embarked on its capitalist
transformation, in the late 1970s, nearly 80% of its
population resided in rural areas, being primarily
engaged in agriculture. A rolling programme of
reforms of the rural economy not only raised agricultural
productivity, but also displaced a vast reserve of
oating labour, which would be put to work mostly
in the coastal factories of the Pearl River Delta (PRD)
and Yangtze River Delta (YRD), exibly and at a frac-
tion of the cost of urban workers (LEE, 2007; HUDSON
et al., 2010). In this respect, the Chinese model was
predicated, from the start, on uneven spatial
development.
Even today, China remains an archipelago of
capitalist urban formations within a sea of rural underde-
velopment. Ofcial estimates of the oating population
mostly peasants living outside their registered home
regions reached 261 million by 2010, an 81% increase
over 2000, which exceeds the total volume of inter-
national migration worldwide (NATIONAL BUREAU
OF STATISTICS (NBS), 2011; INTERNATIONAL
ORGANIZATION FOR MIGRATION (IOM), 2010).
While the growing coastal regions, especially Guang-
dong province, have been the principal destination for
migrant workers, the main sending areas have been
the poor and densely populated interior provinces,
such as Henan, Sichuan and Chongqing. In this
context, Chinas hukou regime (the household
registration system), which links various entitlements
including pensions and access to education and
healthcare to the home region has effectively fostered
a situation of dualized economic citizenship (CHAN,
2009; FAN, 2008), sharply segmenting the labour
market and depriving migrant workers of both social
rights and meaningful access to services. By maintaining
this form of second-class citizenship by permitting
peasants to work in cities only as temporary migrants,
through the denial of urban hukou the Chinese state
has fashioned a migrant labour regime uniquely tailored
to low-cost, labour-intensive industrialization and urban
development, largely at the expense of the migrant
workforce itself. In its separation of the production
and reproduction of labour, moreover, the hukou
system renders urban workplace organization and even
community stability much more difcult to achieve
(CHAN, 2010).
The high rates of economic development that China
has registered in recent years, and the vast inter-regional
movements of labour and capital that these have
entailed, have all taken place in the context of
entrenched forms of uneven geographical development
literally thousands of years in the making. After 1949,
Chinas historically uneven regional economic pattern
was reinforced by the Maos insistence on regional
self-reliance, which stunted the process of interregional
functional integration, fostering what has been called a
cellular economy (DONNITHORNE, 1972). Through-
out the history of the Peoples Republic of China, econ-
omic policies have been framed, correspondingly,
around various forms of regional specialization, from
Maos programme of heavy industry-led development
and the Third Front Project,
1
through Dengs strategy
of experimental liberalization, focused on the coastal
areas, to the most recent rounds of Western
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 13
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industrialization (WEI, 2010a; ZHANG, 2014). The
overall effects of these macrospatial programmes have,
in a profound sense, been cumulative; successive
reform efforts have been layered on their predecessors.
In marked contrast to the post-communist transitions
of Soviet sphere that took the much more radical form
of shock treatment, substantially destroying and then
selectively rebuilding institutional capacities, the
Chinese path of institutional transformation has been
an incrementalist and a spatially targeted one. The
resulting ability to sequence reform, and to manage
carefully forms of political or socioeconomic fallout
that might threaten the regime, has meant that the pro-
digious capacities of the MaoistLeninist state have been
retained largely intact as China has moved towards an
increasingly market-developmental posture. Today,
political power remains rmly concentrated in the
hands of the CCP, the far-reaching powers of which
speak to a form of national territorial integrity, at least
as a durable political fact. At the same time these
powers are constituted through a complex of central
local relations which again often confounds received
understandings of centralized planning or bottom-up
development. The Chinese model of centrallocal
relations is both but neither of these: it combines centra-
lized party discipline and entrepreneurial localism,
hydraulic redistribution with institutionalized
GDPism (a system of interregional resource allocation
pegged to local economic growth rates), dirigiste devel-
opment and deregulated marketization. What has been
characterized as a regionally decentralized authoritarian
(RDA) system combines authoritarian political control
at the centre with considerable economic autonomy at
the local scale (LANDRY, 2008; XU, 2011). This
system, the logic or coherence of which resides
neither at the national or local scale in a singular way,
but is established between them (i.e., relationally), rep-
resents the basic institutional architecture within which
Chinas network of regional capitalisms are embedded.
This is much more than (regional) variation around a
(national) norm, since experimental heterogeneity and
interregional competition are integral to the systems
rationale. In organizational terms, then, there is variety
within variety (cf. DEEG and JACKSON, 2007).
Deng Xiaoping initiated a new round of centrally
coordinated regional specialization and institutionaliza-
tion. His incremental reforms rested heavily on the prin-
ciples of devolution and experimentation, opening up
selected regional enclaves for prot-driven production,
often in conjunction with overseas Chinese capital,
and deploying zoning technologies like Special Econ-
omic Zones (SEZs) as means for trialling new business
arrangements and governance models (ONG, 2004;
ZHANG, 2012). Zoning became emblematic of nation-
alist reform thinking, dening the spatial template for
reformist economic planning and industrial develop-
ment, establishing laboratories for new forms of
market-oriented development, and incubating new
styles of decentralized reform leadership. In addition to
the seven ofcially entitled SEZs, the Chinese state has
created literally thousands of zoning initiatives, includ-
ing free-trade zones (FTZs), export-processing zones
(EPZs), high-technology industrial development zones
(HIDZs), industrial parks, free ports, and enterprise
zones each with a distinctive focus and rationale,
and each endowed with its own pattern of preferential
policies and institutional autonomies (ZENG, 2010).
Crucially, this means that the coastal-industrial enclaves,
which for many dene Chinese capitalism, and which
are now being imitated by the fast-developing inland
regions, were never rolled out in accordance to a singu-
lar, overarching model, but emerged through the exper-
imental (co)evolution of a number of models, in effect as
a loosely coordinated, sub-national network of regional
capitalisms.
No less signicant than the internal geographical,
social and regulatory differentiation of the Chinese
economy, however, are the particularities of the
unique global conjuncture within which the countrys
development has been constitutively embedded. The
starting point for the contemporary evolution of
Chinese capitalism was outside capitalism itself. Politi-
cally, Chinas development was facilitated by its late
Cold War embrace by the United States, as a counter-
weight to the Soviet Union, following the Nixon
Mao rapprochement of 1972, which ended decades of
cultural and economic isolation. Economically,
Chinas policy of selectively opening up to offshore
trade and investment, from the late 1970s, coincided
fortuitously with the extension of global supply chains
beyond the Asian tigers, in search of lower-cost
locations, while at the same time drawing on the organ-
izational capacities and capital reserves of a complemen-
tary form of diasporic capitalism the overseas Chinese.
And in macro-regulatory terms, this was also the begin-
ning of a long-term (neo)liberalization of international
nancial, trade, and investment ows, signalling the
emergence of a capital-centric mode of global growth
that was not only broadly compatible with but highly
opportune for Chinas development strategy, even as
the CCPs posture would remain a loose hug rather
than an intimate embrace of the neoliberal model as a
template for internal reform (LIEW, 2005, p. 349).
The historical singularity of the Chinese development
path has been such that it seems unlikely ever to furnish
an analytically convenient, unitary model. Its transition
to polycentric capitalism (initially, but as many would
argue residually) within a socialist integument, occurred
in the context of an abnormally high degree of path
dependency, reected in a measure of institutional and
political robustness rare in the post-communist world.
Dengs incrementalist and experimental policy of
crossing the river by feeling for stones shrewdly side-
stepped the risks of gambling on a single development
model. The array of globally connected and regionalized
neo-capitalisms that subsequently bloomed, variably
14 Jun Zhang and Jamie Peck
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facilitated inter alia by offshore connections to Chinese-
diaspora capitalists, by the liberalization of global
trading regimes, and by the competitive vulnerabilities
of mass production economies in Western Europe and
North America, must therefore be understood as com-
ponents of a heterogeneous whole, not as offshoots of a
singular model. It is in this context that the specicities
of some of Chinas regional sub-capitalisms, to which
this paper now turns, should be appreciated. Pursuant
to the argument here that the frame of nationally
scaled institutional coherence is unproductively restric-
tive in the Chinese case this paper begins in deliberately
provocative terms, in cross-border territory, with the
offshore precursors-cum-enablers of Chinese capitalism:
Hong Kong and Taiwan. In the early stages of the coun-
trys market transition, these formations of Chinese
capitalism outside China were vital stepping stones in
what was a still-uncharted journey across the river. Fol-
lowing this, this paper provides capsule descriptions of
ve of the most prominent regional sub-models of
Chinese capitalism Guangdong, Sunan, Wenzhou,
Zhongguancun and Chongqing (Fig. 1) with particular
reference to the analytical dimensions emphasized in
VoC studies, namely labour relations, education and
training systems, interrmrelations, and corporate nan-
cing and governance.
Hong Kong and Taiwan: extra-territorial Chinese capitalisms
While actively facilitated by reform politics, Chinese
capitalism was hardly home grown; in fact, it began as
a substantially imported model, assembled onshore
in other words a cross-border construction. Chinas
economic takeoff during the reform era was duly con-
centrated around the coastal export-oriented regions,
themselves positioned at the nexus of the reform pro-
gramme and the relocation of manufacturing capacity,
investment capital and business expertise from the so-
called China Circle, especially Hong Kong and
Taiwan (NAUGHTON, 1997). The open door policy
largely worked by virtue of what was on the other
side of the door. In this sense, Chinese capitalism, in
its offshore form, pre-existed and then facilitated the
onshore model, the latter being a transnational and
regionalized construction from the start.
Under British colonial rule, Hong Kong had been
transformed from a barren rock to the Pearl of the
Orient, an entrept handling Anglo-Chinese trade as
well as a signicant nancial centre (SO, 2004).
Heavily represented among the islands business class
were those industrialists who had ed from Shanghai
after 1949, later to be joined by a massive inux of refu-
gees from China in subsequent years. Hong Kongs
rapid rise since 1950s as an export-driven manufacturing
centre was predicated on this fortuitous match between
a savvy entrepreneurial class, international political
economic connections, and an abundant supply of
cheap and diligent refugee workers. The cluster of
overwhelmingly small, guanxi-based, and Chinese-
owned private rms pioneered and perfected a contract
production system during the 1960s and 1970s, strongly
oriented to the global market (TAO and WONG, 2002).
As the Chinese economy was selectively opened after
1978, many of Hong Kongs land- and labour-intensive
production activities were rapidly relocated to neigh-
bouring Shenzhen and Dongguan, along with other
cities in the PRD, securing signicant cost savings
with minimal disruption of management and control
functions (SO, 2004; SIT and YANG, 1997). Hong
Kong has thus transformed from a manufacturing
centre to a servicing and coordination hub dominated
by manufacturing-related producer services, a head-
quarters location for Asia-Pacic multinationals, par-
ticularly from the Chinese mainland, as well as an
offshore venture capital centre for Chinese enterprises.
Once described by Milton Friedman as the worlds
greatest experiment in laissez-faire capitalism (THE
ECONOMIST, 2010a), Hong Kong has long exhibited
proto-neoliberal state forms, with little by way of indus-
trial policy and trade control. The labour regime has also
remainedheavily market oriented, eschewing centralized
wage-setting, compulsory collective bargaining, and
even minimalist industrial relations institutions, at least
until very recently.
2
Although Hong Kong boasts
several top universities in Asia and a strong record in
general education, this has never been coordinated
with concerted efforts to drive productivity and quality
improvements across the enterprise sector, or to
upgrade technological capabilities (TIPTON, 2007).
Hong Kong has remained a trading and services-
dominated society, falling short in research and develop-
ment (R&D) capacity and technological innovation. The
island was instrumental in shaping a distinctive, cross-
border pattern of economic transformation, enabling
the rapid growth of an imported form of industrial capit-
alism on the mainland by way of a blend of plant reloca-
tion, external control and offshore capitalization, albeit
mostly in the absence of skills or technological upgrading
(CHIU and WONG, 2004; YANG, 2007).
Taiwans experience has been vastly different,
though in its own way ultimately complementary. Its
founding government comprised the retreating Repub-
lic of China (ROC) administration, which ed Nanjing
in 1949, together with some 2 million soldiers and a sig-
nicant political, intellectual and business elite. A rolling
programme of industrialization policies began in the
1950s, which saw Taiwan emerge as one of the paradig-
matic developmental states, with a state-owned banking
system and a small and medium-sized enterprise (SME)-
dominated industrial structure (WADE, 1990). The
ROC government has remained a staunch ally of the
United States since the Second World War, capitalizing
on close ties with the American political and economic
establishment. Among the countrys landmark initiatives
in state coordination are the Industrial Technology
Research Institute (ITRI), established in 1973 and
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 15
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modelled after Stanford Research Institute, and the
Hsinchu Science-based Industry Park, formed in 1980
as a variant of the Stanford Industrial Park, where
dynamic clusters of foreign and domestic high-technol-
ogy rms operate in close proximity to leading-edge
research laboratories (ERNST, 2010). A domestic
venture capital industry was subsequently developed,
also following the Silicon Valley model, after the mid-
1980s (SAXENIAN, 2006).
Since the early 1960s, global production networks
(GPNs) have been extending rapidly across East Asia
(HENDERSON et al., 2002). The US semiconductor
company Fairchild established a factory in Hong Kong
in 1961; and Philips of the Netherlands opened a plant
in Taiwan the same year (WADE, 1990). Since that
time, both Hong Kong and Taiwan have gained entry
to global technology markets through original equip-
ment manufacturing relationships with electronics retai-
lers. With the support of its developmental state, Taiwan
developed an elaborated regime of hierarchical subcon-
tracting, the satellite assembly system (HAMILTON,
1997, p. 284), comprising several tiers of production sub-
contracting across layers of small and medium-sized man-
ufacturers. The integrity and the competitiveness of this
system were predicated on guanxi-networks and trust
relationships, facilitating uid communications, together
with the sharing of orders, production facilities, and
personnel (FIELDS, 1995).
Taiwans economic liberalization process has been
relatively cautious. The economys managed opening
reects a prevailing politicaleconomic ideology that
can still be characterized as developmental paternalism
(DEYO, 1989; HAN and CHIU, 2000). The country has
developed a remarkably strong tertiary education
system, in the process training a large cadre of engineers
equipped not only to capitalize on imported technol-
ogies but to advance and develop these in the service
of domestic rms (WADE, 1990). Since the 1960s, the
acquisition of higher degrees from leading US insti-
tutions has become a rite of passage for students from
the Taiwanese elite, especially in the elds of science
and engineering (SAXENIAN and HSU, 2001).
3
Between 1986 and 1996, more than 40000 overseas
Chinese returned to Taiwan from the United States
(SAXENIAN, 2006, p. 148). These returnee engineers
and entrepreneurs were instrumental in the develop-
ment of Taiwans world-leading semiconductor and
venture capital industries during the 1980s and 1990s.
The now well-established Silicon ValleyHsinchu
relationship consists of countless formal and informal
collaborations between investors, entrepreneurs,
SMEs, along with the divisions of large companies
located on both sides of the Pacic (SAXENIAN, 2006,
p. 135). SAXENIAN (2006) has coined the term brain
circulation to call attention to the mutually benecial
effects of this reciprocal relationship.
Under hostile geopolitical environment of cross-strait
tensions with China, Taiwanese investment on the
mainland was forbidden by the ROC government
until 1988. However, under relentless pressure by
global brand marketers to reduce costs and time to
market, most Taiwanese information technology manu-
facturers began to relocate manufacturing activities to
China once the investment ban was lifted (ERNST,
2010). This has allowed Taiwan to secure the status of a
second-tier player in the global information technology
industry, and a key node in the technology-based
GPNs, propelling the country to second place (behind
only Hong Kong) in the league table of foreign investors
in China, with a pattern of investment heavily focused, as
discussed below, on the Suzhou region (CHEN, 2002). In
contrast to Hong Kongs locked-in position with low
value-added, buyer-driven supply chains, Taiwanese
rms have been upgrading proactively, although they
still must operate on razor-thin prot margins barely suf-
cient to support investment in R&D, intellectual-prop-
erty creation and branding (ERNST, 2010). The country
has therefore played a distinctive role, alongside Hong
Kong, as a shaper of initially extra-territorial and later
cross-border models of regionalized Chinese capitalism,
initiating an ongoing process of restless, mutual trans-
formation. There could be few clearer illustrations of
the need for varieties-style scholarship to reach beyond
the boundaries of the nation-state, in order to appreciate
how (new) capitalist forms are being forged translocally
and transnationally.
Guangdong: dormitory regime in transition
By the same token, the Guangdong model and indeed
the wider PRD region exhibits geographically distinc-
tive pattern of development which is predicated on
external networks and hierarchical relations. This
regional formation is functionally inseparable both
from Hong Kong (with which it shares linguistic and
cultural similarities, as well as tight economic linkages
and spatial propinquity) and from Beijing (in light of
the 1979 policy decision to establish three of the rst
four SEZs in Guangdong, which set the terms, and in
many ways the rules, for its subsequent development).
Dengs open-door policy actively facilitated, indeed
encouraged, the colonization of Shenzhen, Dongguan,
Guangzhou and many other cities in the PRD by
Hong Kong capital, nance and production networks
(ZHANG, 2012). With remarkable speed, an export-
oriented, front shop-back factory model of develop-
ment was forged, in which the PRD functioned as the
production base while Hong Kong controlled market-
ing and nance (SIT and YANG, 1997).
4
Hong Kong
investors characteristically operated as merchant entre-
preneurs, mainly concerned with securing short-term
nancial returns (YANG, 2007), displaying no interest
developing those more enduring relationships with sup-
pliers and customers usually deemed necessary to pro-
ductive upgrading and sustained innovation.
16 Jun Zhang and Jamie Peck
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The PRDs export-oriented production regime was
developed on the basis of low-skill, labour-intensive
activities. Dependency on price-sensitive export
markets and foreign capital has been associated with
sub-par levels of R&D investment and labour-pro-
ductivity growth (ZHOU et al., 2011). However, by
virtue of Shenzhens special status, as Dengs signature
zone for experimental reregulation, the city has
enjoyed rst-mover advantages in terms of political con-
nectivity, regulatory accommodation and strategic
public investments. Selected as the site for one of
Chinas two stock exchanges, Shenzhen has also been
able to capitalize on an unusually high degree of local
policy-making autonomy, including the right to initiate
local legislation. This has enabled the city to be much
more successful than the PRD region as a whole in tran-
sitioning from the original export-processing model to a
pattern of technological upgrading, based on enhanced
R&D capacities. Shenzhen now boasts some of the
most prominent information and communication tech-
nology (ICT) enterprises in the country, including
Huawei, ZTE and TCL (WANG and LIN, 2008).
Since the mid-1990s, foreign investment ows have
become increasingly diversied: although Hong Kong
remains the single most important source, investors
from Taiwan, Japan, Singapore, the United States and
South Korea now all play much more important roles
(ZHAO and ZHANG, 2007). Nevertheless, low-technol-
ogy, labour-intensive, export-orientation remain den-
ing features of the Guangdong model.
Guangdong has also remained the most attractive
destination of interprovincial migration (FAN, 2008).
Its dormitory labor regime, in which migrant
workers are accommodated in or near the factory com-
pound, facilitates a near-complete form of labour
control. Managers are therefore able to impose exi-
bility on a unilateral basis, to suppress wages and to
extend the length of the working day (PUN and
SMITH, 2007). Temporary migrants, in this context,
possess very little bargaining power (LEE, 2007).
Voice and exit is more common than voice and
stay, as workers nd it easy to move to other employers
in the region. High labour turnover rates mean that
workplace organization and community stability are
both difcult to achieve. This has begun to change,
however, with the intensication of labour unrest
among migrant workers, protests having become
increasingly tactical, coordinated and indeed radical
over time even as workplace union organization
remains impeded by the absence both of the right to
free association and effective means of institutional
support (CHAN, 2010; PRINGLE, 2011).
The widely publicized string of suicides in 2010 at
the Shenzhen operations of Foxconn, the Taiwan elec-
tronics manufacturer, coincided with a surge in worker
radicalism and international condemnation of working
conditions (BARBOZA, 2010). Double-digit wage rises
across the region have in turn triggered a wave of
closures among low-margin factories, with the tacit
approval by Beijing, in light of the strategic goal of
upgrading the export-led economy (GAPPER, 2011).
Central government policies now favour regional
wage growth in an effort to boost domestic consump-
tion, while a major effort is also underway to transfer
labour-intensive industrial operations from the coastal
zones to inland zones in the West, such as Chongqing.
This has unleashed a process of creative destruction
across Guangdongs sprawling industrial cities: some
companies are investing, in situ, in value-adding strat-
egies; some are closing down; and many are relocating
to lower-cost sites either inland or offshore, to countries
like Bangladesh and Vietnam (YANG, 2012; ZHANG,
2014).
Sunan: transnational technology complex
Sunan was Chinas original industrial region, being well
established as a manufacturing centre by the late 19th
century (WEI et al., 2009; WEI, 2010b). Sunan com-
prises that part of Jiangsu Province to the south of the
YRD which includes the cities of Suzhou, Wuxi and
Changzhou. Densely populated and agriculturally
advanced, Sunan stagnated during the Mao era,
though it developed robust socialist institutions while
retaining a tradition of small-scale handicraft production
in the countryside, which would evolve into a network
of communal enterprises during the late 1950s (ZHANG,
2008, pp. 3334). After 1978, with the aid of powerful
and proactive local governments, this sector matured
into a prototypical model for Chinas TVEs (VEECK
and PANNELL, 1989). These collectively managed
TVEs received guaranteed loans from local govern-
ments and other types of preferential treatment, estab-
lishing the basis for a Sunan model conceptualized by
Jean Oi (OI, 1999) as local state corporatism. While
the TVE sector expanded, however, the private sector
remained relatively underdeveloped; nancing and
regulatory arrangements both favoured collective enter-
prises (TSAI, 2007). The rapid expansion of TVEs trans-
formed a large number of local farmers into factory
workers, pioneering a model of industrialization
without urbanization, or what became known as
leaving the soil without leaving hometown (FEI,
1989).
In the 1990s, Beijing began to shift the focus of econ-
omic reform efforts away from the PRD region and
towards the YRD, establishing Pudong as a New
Open Economic Development Zone, with a view to
positioning Shanghai as the dragon head of the YRD
and an economic locus for China as a whole. In this
context, the Sunan TVEs have been progressively priva-
tized (or transformed under multiple ownership
arrangements), becoming increasingly integrated into
GPNs led by Singaporean and Taiwanese investors in
sectors like information technology and advanced
machinery (SHEN and MA, 2005). The Sunan model
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has therefore transitioned from rural industrialization to
rural internationalization (ZWEIG, 2002). Following
Dengs 1992 southern tour and the opening of the
Pudong New District, local governments in Sunan
began appropriating farmland for industrial parks for
joint venture initiatives, offering foreign investors a
variety of concessionary inducements. Prototypical of
the Sunan model, the municipality of Suzhou has
been transformed into a globalizing city, spearheaded
by the ChinaSingapore Suzhou Industrial Park (SIP)
(WEI et al., 2009). By 2009, Sunan had established ten
national-level economic development zones and 38
provincial ones (ZHOU, 2009). Given its proximity to
Shanghai and its tradition of more business friendly
and administratively competent local states than the
PRD, Suzhou has become a major destination for
foreign investment, especially in the Taiwanese infor-
mation technology sector (ZHAO and ZHANG, 2007;
WANG and LEE, 2007).
By the early 2000s almost all the leading rms in the
major sectors of Taiwans information technology indus-
tries had located manufacturing facilities in the Greater
Suzhou Area (YANG and HSIA, 2007). The hen
brought little chickens together is how HSU (2006,
p. 240) describes the strategy of Taiwanese investors: this
involved the wholesale relocation of the satellite assembly
system, including all its suppliers, from Taiwan to
Suzhou. This was predicated, rst, on high levels of
local-state capacity and organizational expertise, legacies
of the socialistcorporatist past unavailable in regions
like the PRD(YANG, 2007), and second, by the extensive
use of Taiwanese investors associations (TIAs), present in
many of Suzhous major cities, which proactively shape
development agenda setting while bargaining collectively
with government agencies, in contrast to the Guangdong
pattern, which is based on the interpersonal networks of
Hong Kong investors (HSU, 2006; YANG, 2007).
Following this massive inow of foreign investors,
the demand for migrant workers has been rising in
Suzhou, but their share in the total workforce remains
signicantly lower than that in the PRD. In contrast
to Hong Kongs merchant entrepreneurs, the Taiwa-
nese are regarded as industrial entrepreneurs, compet-
ing more on quality than on price (YANG, 2007). This
has been associated with more benevolent and progress-
ive capitallabour relationships than the archetypical
dormitory regimes of Guangdong. The Taiwanese man-
ufacturing sector has evolved from a system of strict
shop-oor control to one based on technological
upgrading and the promotion of local managers (HSU,
2006). Similarly, Singaporean investors have also left
an imprint on the industrial relations culture at Sunan.
SIP has developed a unique social-welfare system imi-
tating Singapores provident fund model. Migrants to
SIP are permitted admission to local hukou; they experi-
ence lower levels of institutional discrimination and
higher rates of participation in social insurance than else-
where (LI et al., 2011a).
There is a growing sense, however, that the absence
of highly ranked domestic universities and research insti-
tutions in Sunan has begun to hinder the development
of local technological capacities (WEI et al., 2009).
R&D activities remain dependent on transnational cor-
porations (TNCs) or external institutions, with limited
spillovers into the regional economy. As a result,
supply linkages between foreign-owned and local
rms are generally weak, though this is beginning to
change (WEI et al., 2009). Suzhou is making concerted
efforts to attract and cultivate human resources, and to
develop indigenous R&D capacities. For example, a
higher education district was created to host local
branches for universities and research institutions,
including a new jointly founded international university
by Xian Jiaotong University of China and the UKs
University of Liverpool. As a result, although the
Sunan model has been under pressure from rising
labour and land costs, this has been less severe than in
Guangdong.
Wenzhou: Marshallian development in crisis
A hilly and geographically isolated coastal city in Zhe-
jiang province, Wenzhou struggled economically
during the Maoist era while retaining a long tradition
of handicraft and mercantile skills, latent capacity
which was later converted into a sustained, post-1978
growth pattern, based on private, family-run TVEs,
organized in specialized industrial clusters (WEI et al.,
2007). Located at the periphery of the socialist state
and often overlooked by Beijing, Wenzhous local gov-
ernment had neither the resources nor the capacity to
develop collectively owned enterprises. Wenzhous
private entrepreneurs, however, were quick to take
advantage of a laissez-faire local state and to seize the
vast domestic market opportunities in consumer pro-
ducts that opened up during the reform era. Today,
for example, Wenzhou produces more cigarette lighters
and spectacles than anywhere on earth (ANDERLINI,
2011). Combining petty commodity production and
large markets, these clusters resemble Marshallian indus-
trial districts in some respects, albeit with the distinction
of integrating specialized production systems with local
marketplaces (WEI et al., 2007).
Many of these markets have since internationalized,
partly enabled by extra-local conditions: the active out-
migration of Wenzhou people during the reform period
contributed to the formation of commercial networks
across the country and overseas.
5
Network ties of the
Wenzhounese are strong partly due to the unique
local dialect, which is incomprehensible even to
people from neighbouring prefectures. Strong kinship
and community ties further facilitated private petty-
commodity production in Wenzhou, enabling a
network of underground nancial institutions, such
as large-scale rotating credit associations, unregulated
moneylenders and private banks disguised as other
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entities, although investment in xed assets in Chinas
rural enterprises came mainly from bank loans and
internal accumulation (TSAI, 2002). In Wenzhou,
network ties are further assisted by voluntary and auton-
omous grassroots business associations, which are
playing active roles in both the economic and political
arenas, in contrast to Sunan, where the heavy presence
of government and public enterprises reduced the
scope (and need) for such bottom-up mobilization
(ZHANG, 2008, pp. 173, 195).
The Wenzhou model is classically characterized by a
relatively at class structure, due to the predominance of
small businesses and self-employed people. Roughly
one-fth of the local population comprises business
families with access to productive assets (ZHANG,
2008, p. 117). The majority of factory and service
workers in Wenzhou, however, are migrants. Wenz-
hous local governments have been notorious for their
poor infrastructure and service provision, although
with rapid economic growth, they have assumed more
active roles. Wenzhous characteristic form of petty
capitalism has conventionally been a laggard in training
and technological development, and R&D is usually
externally derived, reecting the absence of upscale uni-
versities and research institutes (SMART and SMART,
2005). The exclusivity of the regions inter-rm net-
works, coupled with increasingly tight staterm
relations, has also reduced the attractiveness of
Wenzhou as a foreign direct investment target (WEI
et al., 2007). Rigidifying webs of interpersonal relations,
centred on kinship and place, have in turn locked out
external collaborators, leading to the calcication of
statebusiness networks, rent seeking and local
protectionism. Once something of a trend-setter, the
Wenzhou model has recently faltered into low-road
development path based on the exploitation of family
labour and low-technology manufacturing; large-scale
relocation and branch-plant growth across inland
regions have become commonplace (ANDERLINI,
2011; WEI et al., 2007). These relocation trends have
exacerbated capital outows, making it more difcult
for Wenzhou to attract skilled workers or to improve
local R&D capacities. Worse still, shrinking prot
margins in local manufacturing and the proliferation of
underground banking have together driven investment
into real-estate speculation. Slowing global demand for
cheap Chinese exports, rising production costs, the tigh-
tening of monetary policy and more recently a stagnat-
ing real-estate market have combined to crush some of
the countrys most celebrated entrepreneurs. In one
tragic case, the owner of a Wenzhou shoe factory, in
debt to the tune of over US$63 million, committed
suicide, while more than 90 other bosses have ed,
according to state media (ANDERLINI, 2011). This has
triggered widespread anxiety about the future of the
Wenzhou model in particular, and more generally the
low-road development model which the region has
come to symbolize.
Zhongguancun: Silicon Valley East?
As the Wenzhou model has faded, it has been rudely
eclipsed by Zhongguancun (ZGC) Chinas Silicon
Valley, located in the northern suburbs of Beijing
(ZHOU, 2008). As the nations capital and its primary
higher-education hub, Beijing has unparalleled advan-
tages in human resources and guanxi networks. These
knowledge-economy capabilities were instrumental in
igniting Chinas rst wave of indigenous high-technol-
ogy companies in the countrys inaugural technology
zone ZGC Science Park, established in the early
1980s. ZGC would soon become Chinas leading incu-
bator of nongovernmental high-technology companies.
In a manner reminiscent of the Taiwanese model of
development, the ZGC economy has matured into a
major node in brain circulation circuits, especially
since the mid-2000s, in part because the ZGC-based
Tsinghua and Peking universities have become the top
two feeders of doctoral programmes in the United
States (ZHOU, 2008; ZHOU and HSU, 2011). Returnee
entrepreneurs have built robust and highly protable
technological and venture capital links between
Beijing and other innovative regions such as Silicon
Valley, Taipei and Singapore (SAXENIAN, 2006).
While the seed money for rst-generation ZGC entre-
preneurs largely came from their mother institutions and
local communities, in the last decade Beijing has
emerged as Chinas venture-capital capital, with an
abundant presence of both domestic and foreign funds
(ZHANG, 2011).
As a result, Beijing has consistently been the most
technologically advanced region in China, with substan-
tially higher rates of labour productivity, R&D invest-
ment and new product development than other
regions (ZHOU et al., 2011). The still-expanding ZGC
Science Park is now the undisputed heartland of
Chinas ICT industry; it is home to some 20000
high-technology companies, with particular depth
in software, computer and internet services (THE
ECONOMIST, 2012a). Many of the leading rms in
these sectors are now publicly listed at NASDAQ or
on the stock exchanges in Hong Kong. Rather like
Silicon Valley itself, the focus here is on high-end,
value-adding services, like design, R&D, marketing
and coordination. ZGC is not a manufacturing centre,
being constrained by water and land shortages, and the
countrys strictest internal migration controls (ZHOU
et al., 2011). The labour supply in ZGC in particular
(and Beijing in general) is dominated by graduates
from local universities and elite overseas returnees, in
contrast to the reliance on rural migrant workers
typical of many other high-growth regions. For this
reason, ZGC enjoys the most benign capitallabour
relations of all Chinese regions.
ZGCs ICT industry is domestically oriented, reect-
ing its service orientation, even though Beijing hosts the
largest number of headquarters of foreign enterprises
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(ZHOU, 2008). ZGC companies, however, are deeply
networked into both local and international circuits of
technological expertise. Cooperation with foreign com-
panies enables ZGC companies to access new ideas and
to enter markets with new products, whereas
cooperation with universities is used mainly to design
new products (LIEFNER et al., 2006; ZHOU and
TONG, 2003). Although strategic alliances, subcontract-
ing relationships and other forms of cooperation do exist
in ZGC, interrm cooperation is generally weak.
However, foreign-owned rms are more often predis-
posed towards collaborative arrangements like partner-
ships and information sharing. Home-grown Chinese
rms tend to be sceptical of collaboration, favouring
in-house development of technology or multinational
licensing arrangements, reecting low levels of trust
and weak institutional accountability (ZHOU, 2008;
ZHOU et al., 2011). Relatedly, although Beijings
white-collar workers enjoy the best training opportu-
nities in the country, publicly funded training systems
are generally weak, while on-the-job training in the
private sector is hampered by rapid job hopping and
short employment tenures (LI et al., 2011a). High
levels of employee turnover and excessive poaching
also deter in-house training, so Chinas Silicon Valley
has some way to go before it can emulate the virtuous
circuits of knowledge circulation pioneered by the
original.
Chongqing: capital of Maonomics, interrupted
Other than ZGC, if there is another regional model that
in recent years has staked a credible claim to the mantle
of the next China, that is Chongqing (THE ECONOM-
IST, 2010b). Remote and isolated, Chongqing had for
many years languished on the margins of the national
economy. With a population of 32 million roughly
equivalent to the size of Canada Chongqing remains
a predominantly rural region, with 70% of its residents
living in poverty-stricken conditions in villages and
small towns. In common with many other inland
regions and industrial centres, the region experienced
a state-dominated model of development during the
Mao era (TSAI, 2007, p. 161). As the countrys
wartime capital, between 1938 and 1945, Chongqings
manufacturing capacity was built around the defence
industry, augmented by Third Front programmes
during the 1960s (NAUGHTON, 1988). Yet this did
little to improve living standards, and this remote
capital of Chinas militaryindustrial complex was to
fall even more out of step with the development priori-
ties of the post-1978 reform era, which favoured export
sectors along the coast. Its limited political and nancial
resources were absorbed by the burdens of maintaining,
and later reforming, an inherited cluster of giant old-
economy SOEs, Chongqing had little scope to
promote the development of the non-state, market-
oriented sector (HONG, 2004). As its economy
stagnated, the region duly became a major source of
migrant labour-power, destined for coastal regions like
Guangdong, from the early 1980s.
This long-run pattern of structural decline, however,
was disrupted in 1997 when Chongqings municipal
administration (formerly part of Sichuan province) was
designated as the fourth of the PRCs new generation
of directly controlled municipalities. This positioned
the region at the apex of central government efforts to
develop the west (HONG, 2004). Beijings decision to
assume direct control of the municipality of Chongqing
itself reected a sea change in national development pri-
orities, as the region was repositioned as a role model for
the programme of redirecting industrialization efforts
from the coast to targeted inland areas, challenging
what have become deeply entrenched geographical
inequalities in income levels and development pro-
spects. In this respect, the Chongqing model represented
a political imperative for the CCP, just as much as it
stood for a particular strategy of regional economic
development. Conrmation of the political signicance
of the Chongqing experiment came in 2007, when Bo
Xilai, a Politburo member and son of a legendary revo-
lutionary leader, was appointed as the regions Commu-
nist Party Secretary.
These circumstances meant that the Chongqing
model had for some time been calling out for and
arguably deserving attention. But attention of a
quite different kind was generated in March 2012,
when Bos spectacular fall, amid charges of corruption
and alleged complicity in the cover-up of a murder
case involving his wife, caused an international sen-
sation. These events not only stigmatized the Chongq-
ing model, but also triggered an international discussion
about its possible demise (THE ECONOMIST, 2012b).
Bo Xilai had certainly attempted to personify, while at
the same time taken credit for, the regions development
model, which he would link to amboyant acts of pol-
itical stagecraft. Amongst his most (in)famous campaigns
were the so-called chang hong da hei (singing red songs
and busting maa gangs). In the service, ostensibly, of
restoring red morals, the red-song campaign arguably
had more to do with fortifying Bos own political stand-
ing while diverting attention from untended social and
political problems (CUI, 2011; THE ECONOMIST,
2012c). Although the loudly publicized crackdown on
maa gangs and organized crime resonated with large
parts of the Chinese public, there are credible allegations
that this entailed the use of brutal methods of suppres-
sion, extending to accusations of torture and the arbi-
trary seizure of assets (JI, 2012). Some argued that Bos
stated goal of helping the poor and guiding the rich
was translated, in practice, into helping the poor by
extorting the rich (cf. HU, 2011).
The Chongqing model, however, cannot be reduced
to chang hong da hei or indeed to Bos audacious political
programme. The seeds of the model were sown by Bos
predecessor, Wang Yang, who went on to become
20 Jun Zhang and Jamie Peck
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Guangdongs party chief. Arguably, the true initiator of
the Chongqing model was the municipalitys mayor,
Huang Qifan, a long-time strategist who served under
both Wang Yang and Bo Xilai, who to this day
retains a signicant policy-making role. With extensive
prior experience with development initiatives in Shang-
hai Pudong, Huang was appointed as Chongqings vice-
mayor in 2001. The Pudong model pioneered a land
infrastructureleverage paradigm, which was rapidly
emulated by an enormous number of local governments
across the country, effectively as a party-state version of
the urban growth machine (TSUI, 2011). This approach,
predicated on immense state power over land, exploits
windfall land revenues, supplemented by loans from
state-controlled banks, to nance massive infrastructure
investment and industrial expansion. It was Huang who
rst brought the Pudong model of land nancing to
Chongqing, with an especially heavy reliance on
SOEs and property developers in the initiation of
public infrastructure projects (HUANG, 2011).
Similarly, the Chongqing government can be seen to
have behaved in much the same way as other local gov-
ernments around the country in promoting and com-
peting for inward investment, though its efforts here
were measurably bolstered by Bos deep political con-
nections and resources (HUANG, 2011). Vast areas of
undeveloped land, abundant supplies of locally available
cheap labour, together with a generous package of
nancial, infrastructural and institutional inducements,
made Chongqing an almost irresistible location for
rms seeking to cut costs by distancing themselves
from coastal hotspots. Brand-name enterprises like
Hewlett-Packard and Cisco, along with the outsourcing
service giant Foxconn, have relocated major operations
to Chongqing. Riding this tide, Chongqing was
selected to host no fewer than four national-level devel-
opment zones, along with some 36 municipal-level
industrial parks, in the process securing its position as a
leading-edge manufacturing economy, focused on the
information technology sector and on a massive logistics
and civil-aviation complex (HUANG, 2011). For a time,
this was reciprocally sustained by favoured positions in
national policy regimes. For example, in early 2011,
the State Council chose Chongqing as the site for one
of three National Industrial Relocation Zones
(ZHANG, 2014). In these and other ways, the region
has witnessed vigorous development across both the
public and the private sectors. What was distinctive,
however, about Chongqings version of the land
infrastructureleverage paradigm was its explicit link
to Bos bombastic revival of socialism (CUI, 2011;
HUANG, 2011). This placed the region, for a while
anyway, at the centre of experiments for more inclusive
approaches to development. The Chongqing govern-
ment was the rst to take signicant steps to alleviate
the chronic conditions confronting migrating peasant
workers. The city also piloted bold reforms of the
land-tenure system, opening up channels for rural
migrants to access to urban education, healthcare and
pensions. Three million farmers were promised
Chongqing urban-hukou by 2012, rising to 10 million
by 2020 (for those willing to give up their rural resi-
dency rights). Chongqing has also set an ambitious
goal of housing 3040% of the population in public
apartments, initiating a massive construction programme
in 2009 with the intention of accommodating more
than 2 million low-income residents. This prompted
Beijing to make the case for similar projects nationwide
(THE ECONOMIST, 2012c). The designation, therefore,
of Chongqing as Chinas red capital, or the capital of
Maonomics (NAPOLEONI, 2011), is not without sub-
stance. And for a while its precocious model of liberal
socialism was being interpreted as an alternative
and, for some, a putative successor to the coastal
regime of neoliberal capitalism, epitomized by Guang-
dong, and its alleged betrayal of socialism (CUI, 2011).
Bo Xilais popularity, in this sense, was not accom-
plished by acts of political sleight of hand alone. The
combination of progressive social policies and rapid
economic growth lay at the heart of the Chongqing
model. In the ve years of the Bo regime, regional
GDP growth surged to an average 15.8% per year, well
in excess of the national average of 10.5% per year
(ORLINK, 2012). Of course, there was always a question
of whether this was sustainable. In fact, Chongqings
public debt, much of which is backed by inated land
values, reached 1 trillion yuan, or 100% of its GDP, at
the end of 2011 (ORLINK and WEI, 2012). It should
be noted, however, that massive debt and lavish spending
are by no means conned to Chongqing. Indeed, Bos
economic strategy was largely endorsed by the central
leadership, and his ambitious attempts to narrow the
yawning inequality gap in many ways anticipated what
have become priorities for the new leadership in
Beijing (THE ECONOMIST, 2012b). Ultimately, it was
Bos unseemly and rather open challenge to the estab-
lished order, and his correspondingly transparent
attempts to harness popular support for the benet of
his own political advancement, that secured his
undoing. In the fallout, the advance of the Chongqing
model has certainly been interrupted, and the collateral
damage is considerable. But the model itself seems des-
tined to survive, albeit in a less explicitly politicized form.
Chongqing may well prove to be consequential in
other, yet more fundamental ways. Bo Xilais ouster
laid bare the erce power struggles that have been
raging through upper echelons of the party, exposing
the most damaging split in the CCP leadership since
the Tiananmen Square events of 1989. Moreover, the
downsides of the Chongqing model include the
absence of checks and balances against the enormous
power of local party leaders and a continuing lack of
meaningful judiciary independence (JI, 2012). Conse-
quently, the new leadership in Beijing is confronted
by daunting challenges, not least concerning the main-
tenance of political legitimacy in the context of
Variegated Capitalism, Chinese Style: Regional Models, Multi-scalar Constructions 21
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slowing rates of economic growth. In this respect,
Chongqing also highlights the implicit contradictions
in the current mode of development especially
between the goals of continued growth and spiralling
rates of inequality, and the unstable tradeoffs that have
been struck between prosperity and democracy
thereby feeding into deep-seated anxieties concerning
Chinas political and economic future.
CONCLUSION: THE COMPLEX UNIVERSE
OF CHINESE CAPITALISM
China, as NAPOLEONI (2011, p. 323) has observed, is
itself a complex universe. By way of an excursion
through some of the regional subspecies of Chinese
capitalism, summarized at Table 3, this paper has endea-
voured to illustrate here some aspects of the multi-polar
and multi-scalar complexity of this still-perplexing for-
mation. The preceding regional economic vignettes do
not, of course, come close to cataloguing the complexity
of the Chinese mode of capitalism, though it could be
maintained that they do call attention to some of its
more pertinent dimensions of internal differentiation
and complexity. While nominally internal or sub-
national, what is notable about all these regional
models is that neither their developmental essence nor
their institutional integrity is a straightforwardly
endogenous achievement. In as far as they exhibit any
measure of cross-institutional regional coherence, this
is achieved at the nexus of centrallocal regulatory
relations, on the one hand, and transnational economic
connections, on the other. Distinctive conjunctural
locations have clearly played catalytic roles in the devel-
opment of many of these models, be this in the shape of
the rst-mover (de)regulatory advantages enjoyed by
Guangdong, as the site where Hong Kong capital
engaged with the oating workforce of interregional
migrants, or in the radically different pattern exhibited
in Chongqing, where more recent rounds of foreign
investment, oriented to emerging domestic markets,
were married with large-scale intraregional urbanization
under the banner of a unique form of retro-socialist lib-
eralism. The fact that readings of the supposedessence of
Chinese capitalism, not to mention contending visions of
its future, are often articulated through one or other of
these regional models (e.g., neoliberal Guangdong
versus socialist Chongqing) speaks to both the
distinctiveness of these formations and their political
salience.
Substantively, this paper has focused on sub-
national variation within the Chinese model of capital-
ism. Exploring causally signicant differentiation at the
regional or sub-national scale is, of course, but one of
the methodological manoeuvres necessary for a truly
multi-scalar analysis of capitalist variety. It need hardly
be emphasized that nding such regional differences
is merely a prelude to seeking explanations for their (re)
production in the context of ongoing scalar transform-
ations of capitalism, though this is a task that must
remain for future work. Sufce it to say that regional
variability is a feature of all national capitalisms, and
that a case can be made that these geographies are con-
stitutive of all such models (in as far as every national
model internalizes particular congurations of uneven
geographical development), while also highlighting het-
erogeneous forms of regional articulation with globaliz-
ing networks, ows and circuits. The sense, then, is that
there is little to be accomplished by merely downscal-
ing the VoC apparatus for deployment at the regional
level, even though this does have a role as a heuristic
or sensitizing device, bringing into focus some of the
distinctive features of these sub-national models.
Rarely, if ever, is the logic of these models endogenous,
of course, so their relational positioning within business
networks, political circuits, migration ows and so
forth assumes considerable explanatory signicance.
By implication, the case for taking regional formations
of capitalismseriously should not be dismissed as a decon-
structionists charter. Rather, the challenge must be to
theorize across scales, not to privilege, a priori, one scale
of analysis over another. In order to achieve traction in
explanatory terms, such a multi-scalar approach must in
its own way be causally selective it cannot be a
theory of everything or an unprincipled collection of
models from everywhere. Regional models, to
warrant the label, must be shown to display a measure
of distinctive institutional-cum-developmental integrity,
and they must be more than chips from the national
block. It must remain a fact of life that multi-scalar the-
ories of variegated capitalist transformation will never
be as parsimonious and vivid as those stylized formu-
lations and ideal types derived from mainstream VoC
scholarship. However, they are arguably more suited to
the demanding task of accounting for the kinds of
complex transformations that for some time now have
been evident in the world(s) of unevenly globalizing
capitalism. Here, internationalization and regionalization
are proceeding not in zero-sum opposition but in
tandem, while at the same time nationally scaled func-
tions have undergone far-reaching, qualitative forms of
reorganization and reconguration.
While perhaps it can be taken as given that the one-
world convergence models of orthodox globalization
theory can, by now, be safely eschewed, it would be
unfortunate if legitimate concerns around the ideal
typical parsimony of the mainstream VoC framework
should give licence to an indiscriminate hunt for a
(nother) capitalism under every bush. On the contrary,
sources of spatial variegation in contemporary capitalism
must be rigorously theorized, in dialogue with an
expanding array of concrete cases, in ways that are atten-
tive to the structural, connective, systemic and recurring
features of capitalism itself (STREECK, 2011; JESSOP,
2012; PECK, 2013). The VoC approach has been
remarkably effective in stimulating, rst, a research
22 Jun Zhang and Jamie Peck
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Table 3. Regional subspecies of Chinese capitalism?
Guangdong: dormitory regime in
transition
Sunan: transnational technology
complex
Wenzhou: Marshallian
development in crisis ZGC: Silicon Valley East?
Chongqing: capital of Maonomics,
interrupted
Industrial relations Dominance of Hong Kong-
based FIEs
Dormitory labour regime, reliant
on rural migration
Strong outward orientation
From collective TVEs to FIEs
Relatively lower reliance on rural
migrant workers
From inward orientation to
hybrid, regional-transnational
model
From private TVEs to larger
private enterprises
Substantial but relatively limited
rural migrant workers
Limited FDI
Inward orientation
Dominance of local-grown
information technology rms
Locally educated, white-collar
workforce
Relatively benign labourcapital
relations
Inward orientation
Historical dominance of SOEs;
emerging FIEs
Booming rural migration to FIEs
Traditionally inward orientation rapidly
externalizing
Education and
training
Intra-regional disparity in access
to universities and research
institutions
Paucity of training for low-skilled
migrant workers
Developing local universities and
research institutions
Relatively substantial training of
skilled workers
Absence of local universities and
research institutions
Minimal in-house training
Top-ranked universities and
research institutions
Relatively substantial training of
skilled workers
Brain circulation
Little presence of local universities and
research institutions
Limited labour training
Interrm relations Deeply embedded in GPNs,
especially via Hong Kong
Growing pressure to upgrade of
local rms; limited so far
Deeply embedded in GPNs,
especially via Taiwan and
Singapore
Limited knowledge and
technology spillovers to local
rms
Strong family- and guanxi-based
networks among local rms
Limited inter-rm collaborations
Deep linkages between local rms
and transnational corporations
(TNCs)
Relatively isolated SOEs
Emerging embeddedness in GPNs
Corporate
nancing and
governance
Dominance of Hong Kong
investors
Highly active nancial sector and
growing stock market in
Shenzhen
From local state-coordinated
nancing to foreign corporate
sourcing
Endogenous sources mutual
nancial assistance and active
underground
Informal nancing; impeded
access to credit sources
Emerging centre of Chinese the
venture capital industry
Large number of domestic and
overseas initial public offerings
(IPOs)
Dual structure of bank-based nancing
for SOEs and exogenous nancing of
FIEs
Note: FDI, foreign direct investment; FIEs, foreign-invested enterprises; GPNs, global production networks; SOEs, state-owned enterprises; TVEs, township and village enterprises.
Source: Authors; informed by TSAI (2007).
V
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programme and, more recently, a productive debate
around the problematic of institutionally legible vari-
ation across a selective group of national economies,
yet both its sampling strategy and its ontological vision
have been restrictive in spatial, scalar, and substantive
terms. The VoC tradition remains vulnerable to the cri-
tique that it has been methodologically nationalist, resi-
dually Eurocentric and institutionally functionalist. The
fact that it is no longer possible to dismiss Chinese capit-
alism as an offshore curiosity represents a serious chal-
lenge to VoC orthodoxy, which for some time has
been experiencing its own kind of reformist pressures.
Even if the house of comparative national capitalisms
has many rooms, the metaphorical elephant that is the
Chinese economy does not easily t into any of them.
And while recent attempts to place Chinese capitalism
in dialogue with VoC rubrics have been provocative
and sometimes productive (MCNALLY, 2008; WITT,
2010; FLIGSTEIN and ZHANG, 2011; cf. PECK and
ZHANG, 2013), this effort must not be reduced to one
of accommodating the Chinese case within an unmo-
died framework. After all, this is a case that plainly
overows the VoC framework in both substantive and
scalar terms: it can be seen as a nationally orchestrated
model, constructed through an ongoing and selective
process of sub-national regulatory experimentation by
a reforming socialistdevelopmental state in a manner
designed to exploit the imperatives and opportunities
of neoliberalizing and globalizing capitalism. As such,
it redenes received notions of institutional coherence
at the national scale, to say the least. No doubt there are
Chinese ways of capitalism, but these must be under-
stood to be plural rather than singular and they
often nd expression, as it has been argued here, in dis-
tinct regional formations, each of which is embedded
within different congurations of extra-local relations.
The fate of Chinese capitalism may even be decided
by an Oriental war of capitalism against capitalism (cf.
ALBERT, 1993), perhaps between Guangdong- and
Chongqing-style patterns of development, even as it
will surely remain impossible for any regional model
to secure a monopoly position.
Acknowledgements The authors thank Alexander
Ebner and the anonymous reviewers for comments and sug-
gestions on an earlier version of this paper. They also thank
Lili Cai for her cartographic support. Jamie Peck gratefully
acknowledges the support of the Lim Chong Yah Professor-
ship at the National University of Singapore.
Funding Jamie Peck gratefully acknowledges the research
grant programme of the Social Sciences and Humanities
Research Council of Canada.
NOTES
1. The Third Front refers to a large-scale programme,
launched in 1964, to develop a series of large-scale indus-
trial sites in Chinas remote yet strategically secure hinter-
land, largely in response to Cold War insecurities (cf.
NAUGHTON, 1988).
2. Since 1997 the role played by the state has steadily
increased, including the introduction of a compulsory
pension scheme and a statutory minimum wage (THE
ECONOMIST, 2010a).
3. Taiwan sent more doctoral candidates in engineering to
the United States during the 1980s than any other
country (SAXENIAN, 2006, p. 134).
4. A 2002 survey revealed that for every employee engaged
in Hong Kong, 24 were employed in mainland China
(ENRIGHT et al., 2003).
5. It is estimated that about 1.8 million Wenzhou people,
equivalent to one-fth of its total population, have
migrated across the country, establishing some 30000
enterprises in other parts of the country, along with count-
less Wenzhou villages, Wenzhou streets and Wenzhou
towns (ZHANG, 2008, p. 42).
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