Chinese dress up doubt in suit and tie

Dragon in a Three-Piece
May 19, 2000

This book's subtitle and jacket design (depicting a colourful Sunday crowd in present-day Shanghai) do the author no favours; it is a much more interesting and more significant work than these lead the reader to imagine. It is recognisably a "book of the doctoral thesis" and suffers from some of the usual problems, such as an excessively defensive tone regarding its theoretical approaches. It also has one of the main benefits of such works, however, in a substantial and very useful bibliography, albeit one biased towards the early 1990s. The interviews on which the findings draw were conducted in 1994-95 (mostly in Shanghai), but the long road to publication does not seem to have invalidated Doug Guthrie's findings, and his perspective as a sociologist offers particularly valuable insights into the firm-level consequences of China's transition away from the socialist command economy.

The title perhaps requires some explanation: Guthrie finds that Chinese firms and their managers are increasingly mimicking western business structures and practices - putting on the three-piece suit - not because any transcendental market push for efficiency compels them to do this, but as a response to prevailing uncertainty in their institutional environment,and in order to reassure actual or potential foreign joint-venture partners or investors that they are dealing with an organisation that is "on the same page" as they are in the management textbook. More interestingly, though, Guthrie goes on to explore the real consequences that these "mimic" changes are having on the practices of various economic actors in medium-to-large firms in four key industrial sectors in Shanghai (electronics, foods, clothing and chemicals), in areas including labour relations, wages and terms of employment, price setting, negotiations with joint-venture partners, relations between managers and administrators in the industrial hierarchy, and responses to changes in the legal environment of Chinese firms.

The form of ownership of these large firms is much less important to Guthrie than is the influence of their former position in the administrative hierarchy of Chinese industry. Outlining recent shifts in economic and administrative responsibilities between various levels, he develops convincing correlations between the degree to which firms have been "set adrift" from the old command economy and the extent to which they have adopted market-type practices such as fixed-term employment contracts for all employees. In doing so, he also provides an admirably clear and detailed exposition of who runs what in reform-era industry in China, complete with diagrams, which will be of great help to the postgraduate students and researchers, particularly those seeking to do comparative work on China and other economies in transition.

As well as the quantitative data he has collected on the firms surveyed, Guthrie also makes excellent use of the rich qualitative material produced by his many interviews with managers and officials in constructing a nuanced, human-scale and highly readable picture of how Chinese firms are coping with their new environment.

This book is essential reading for anyone interested in China's economic reforms and in transition economies more generally, and it will stand comparison with anything else in the field.

Jackie Sheehan is lecturer in 20th-century Chinese history, University of Nottingham.

Dragon in a Three-Piece: The Emergence of Capitalism in China

Author - Doug Guthrie
ISBN - 0 691 00492 7
Publisher - Princeton University Press
Price - £24.95
Pages - 302

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