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China's Regulatory StateA New Strategy for Globalization$
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Roselyn Hsueh

Print publication date: 2011

Print ISBN-13: 9780801449956

Published to Cornell Scholarship Online: August 2016

DOI: 10.7591/cornell/9780801449956.001.0001

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Dismantling Central Control of Textiles in the Pre-WTO Era

Dismantling Central Control of Textiles in the Pre-WTO Era

(p.129) 6 Dismantling Central Control of Textiles in the Pre-WTO Era
China's Regulatory State

Roselyn Hsueh

Cornell University Press

This chapter examines China's deregulation of the textile industry in the pre-WTO era. In 1993, the central government dismantled the Ministry of Textile Industry, forty-four years after its creation. This represented a milestone in post-Mao market liberalization and foreshadowed the relinquishing of state control in textiles, a nonstrategic industry. Administrative restructuring and regulatory reform further undermined state control between 1993 and WTO accession in 2001. The Chinese government completely liberalized foreign direct investment (FDI) and private entry. Local governments and business stakeholders governed textile manufacturing, creating a vibrant private sector. But although the central government relinquished regulatory control of textiles, state control varied across subsectors according to a strategic value logic and shaped by textiles' structural sectoral attributes. Related central ministries intervened to promote technical subsectors that contribute to construction, aviation, and high technology industries and have military applications. Moreover, the government retained centralized management of raw material inputs and apparel exports due to their impact on the rest of the economy and China's foreign economic relations, respectively. The lower strategic value of textiles, however, meant that the state delegated licensing and quota distribution authority to provincial branches of the trade bureaucracy.

Keywords:   state control, textile industry, industry regulation, deregulation, liberalization

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