Disembedding Socialist Firms as a Statist Project: Restructuring the Chinese Oil Industry, 1997–2002

• Published in: Enterprise & society Vol. 7; no. 1; pp. 59 - 97
• Main Author: Lin, Kun-Chin
• Format: Journal Article
• Language: English
• Published: Cambridge, UK Cambridge University Press 01.03.2006; OXFORD JOURNALS OXFORD UNIVERSITY PRESS
• Subjects: Authoritarianism; Bureaucracy; Business structures; Central government; Centralization; Corporations; Debt restructuring; Decentralization; Economic crisis; Economic impact; Economic reform; Essays; Field study; Governance; Innovations; Market economies; Oil companies; Oil industry; Organizational change; Petroleum; Petroleum industry; Political behavior; Political economy; Politicians; Principal place of business; Public enterprise; Social impact; Social norms; Social sciences; Social structure; Social structures; Sociology; Sociopolitical factors; Studies; Subsidiary companies; China
• ISSN: 1467-2227; 1467-2235
• DOI: 10.1017/S1467222700003736

Crucial to the success of China’s transition to the market economy is the central government’s capacity for institutional innovation. Since 1997, Chinese politicians have sought to transform the governance of state-owned industries from decentralized administrator control to centralized corporate shareholder control. This essay examines the ideological, political, and institutional components of the central state’s strategy of “disembeddedness” that aimed to disrupt preexisting social norms and exchange relations of the planned economy. However, this authoritarian approach to organizational change has generated sociopolitical contentions and unintended economic outcomes that point to alternative conceptions of authority and exchange relations at industrial and firm levels. Focusing on the recent restructuring of the oil and petrochemical sectors into national oil corporations, I provide evidence of how certain types of informal social dynamics have shaped and constrained the implementation of asset control strategies and industrial policies favored by the state, with direct implications for the proper functioning of new market institutions.