Double Embeddedness and Subnational Development: Pathways toward Capitalism in China

Wen Xie, University of Chicago

Why do regions differ in their trajectories of development, even though they are in one state? Drawing on data from four case studies of Chinese regions, this article contributes to the literature of economic sociology and development. It first identifies four regional pathways of China’s market-oriented economic development: (1) the workshop for global capitalism (Dongguan), (2) the center of indigenous entrepreneurship (Wenzhou), (3) the state-guided formation of a global city (Shanghai), and (4) socioeconomic involution (Shenyang). It then explains the variations by using a theory of “double embeddedness” from two directions: that is, the local socio-economic architecture from below and the macro-architecture, especially the national policy domain from the above. Tightly entangled with the history of the region, the local socio-economic architecture conditions market transformation by defining what kind of actions are politically legitimate, socially acceptable and economically beneficial. More autonomously, the central state—as part of the macro-architecture—provides available policy opportunities and resources for a region to develop, grow, and participate in the global division of labor. The interactions between these two levels of embedded economic actions reconfigure the local power structure, form new growth alliances, refashion the rhythms and patterns of local development, and thus shape the regional trajectories of market transformation.

No extended abstract or paper available

 Presented in Session 86. New Frontiers in Comparative Development