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This special issue of American Behavioral Scientist examines the irregular transactions and informal institutions that constitute the essential underside of the Chinese economy. Contributors with a range of disciplinary backgrounds explore shadow banking, social welfare and rural development by private enterprise, NGO financing, the credit/debt cycle of informal international trade, and offshore investment by Chinese state-owned enterprises. The question posed by all contributors is as follows: How, in China through the 2010s, do irregular or nonlegal financial transactions influence political authority? Institutions, the rules and norms by which we live, are found to be key. This "Introduction" sketches the conceptual links between money, rules, and ruling in the context of the heightened authoritarianism and institutional formalization of the 2010s—the Xi Jinping era. [ABSTRACT FROM AUTHOR]

To what extent has governance of China's state-owned economy changed under Xi Jinping? Against the background of momentous shifts in the political arena since 2012, some observe a decisive departure in Xi's approach to managing state-owned enterprises (SOEs): towards tight centralized control by the Chinese Communist Party and away from gradual marketization. Analysing the main aims and methods of SOE governance over the last two decades, we find that SOE policy under Xi exhibits a deepening of pre-existing trends rather than a departure. First, the essential vision of SOE functions articulated under Xi is strikingly consistent with that of his predecessors. Second, his administration's approach to governing SOEs is not novel; it relies on established mechanisms of bureaucratic design, the cadre management system, Party organizations and campaigns. While Xi has amplified Party-centred tools of command and control, this appears to be an incremental rather than a radical shift in approach. [ABSTRACT FROM AUTHOR]

There has been a debate on how the state-driven anticorruption movement during the Xi Jinping administration has influenced state-owned enterprises (SOEs). Research has examined the relationship between corruption and economic development at the country level in Asia and has found paradoxically that economic growth and high corruption levels can coexist. However, the "Asian paradox" that appears at the country level may be a transitional phenomenon of the short term. Not many researchers have empirically compared individual firm-level performance before and after a strong anticorruption drive, drawing on relevant comparison groups. This study tests whether Xi's 2012 anticorruption campaign improved SOEs' performance. With a difference-indifferences method, it explores whether the anticorruption campaign had different effects on the financial performance of SOEs and non-SOEs (private companies). We find that the anticorruption initiative improved SOEs' financial performance and benefited SOEs more than non-SOEs. [ABSTRACT FROM AUTHOR]

Individuals who take advantage of global networks to flee abroad with allegedly corrupt proceeds comprise an important yet understudied group of corruption suspects. We characterize them as "globalized corruption fugitives" and, using the case of China, investigate how they take advantage of international loopholes. Under President Xi Jinping, China actively began to pursue such suspects. Our analysis of their backgrounds and how they evade repatriation to China is based mainly on a list of China's 100 wanted fugitives issued through Interpol Red Notices, supplemented with interviews and documentary data. We find that (1) unexpectedly, government officials did not comprise the majority in the sample; rather, state-owned companies and financial institutions, especially those based in coastal regions, seem to breed fugitive corruption suspects; (2) a tremendous amount of capital has been laundered; (3) Western countries are the most popular destinations of these fugitives, due in part to the protection against repatriation of these countries' legal systems; and (4) Hong Kong serves as a distinct transit point for fugitives from the PRC's justice system. This research highlights the transnational dimension of such corruption cases. [ABSTRACT FROM AUTHOR]

Rampant corruption among China’s party members suggests that the existing system of party discipline is too fragile to function effectively. The question now is how the central leadership reinforces party supervision over leading cadres in both government and state firms. The Chinese leadership, after some period of experimentation, has introduced new institutions, named zhongyang xunshizu (central inspection groups), to complement the existing discipline system. This article examines how these central inspection groups complement the existing groups institutionally and normatively, and explores the Chinese Communist Party’s institutional engineering efforts to maintain legitimacy, organizational integrity and sustainability. This article considers these initiatives from the view of institutional complementarity and compensation. Theoretically, the application of institutional complementarity to China’s party discipline inspection should expand the scope of analysis into China’s institutional reform of party discipline. Empirically, the central inspection groups are the least known, but perhaps most significant, direct channel for central supervision of leaders in both local government and key state-owned enterprises. By comparing the rationale and operation of disciplinary inspection commissions (DICs), this article attempts to explain how the central inspection groups complement the supervision of local DICs in terms of scope, structure and methods of control. [ABSTRACT FROM PUBLISHER]

The article discusses Chinese domestic politics as of September 2013. Particular focus is given to the expectations for political and economic reforms associated with Chinese President Xi Jinping and people in his team, including People’s Bank of China governor Zhou Xiaochuan, Chinese finance minister Lou Jiwei and deputy director of the Chinese National Development and Reform Commission (NDRC) Liu He. The Chinese Communist Party (CCP) and the role of state-owned enterprises are also discussed.