What explains China's rapid economic development and its recent
slowdown? This book answers through a relational perspective, focusing on the
evolving relationship between the party-state and the private sector. I argue
that authoritarian regimes face a cultivation-control dilemma: they need a
private sector dynamic enough to generate growth yet docile enough not to
threaten their rule. When the regime was economically weak, cultivation
dominated, and state-business interactions were personal. Officials co-opted
individual businesspeople by offering political positions, while entrepreneurs
built networks with officials through revolving-door recruitment. These two-way
personalized exchanges gave rise to collusion. As personalized relations
empowered private entrepreneurs and expanded their influence, the pressure for
control mounted. In response, the party-state re-centralized authority through
the anti-corruption campaign, dismantled the local networks on which the old
coalition rested, and rebuilt state-business relations on an impersonal
foundation of strategic state investment and centrally directed crackdowns. The
two modes of state-business relations lead to different economic consequences.
Personalized ties fueled local growth, but at the price of pervasive
corruption. Impersonal ownership harnesses the private sector but softens
budget constraints at the cost of economic efficiency.