New book looks at Chinese state capitalism

Columbia Law News

The domestic and global significance of Chinese state capitalism is examined in-depth in “Regulating the Visible Hand? The Institutional Implications of Chinese State Capitalism,” a new book edited by Columbia Law School Professors Benjamin L. Liebman and Curtis J. Milhaupt ’89 that provides the first comprehensive study of the legal consequences of China’s transformative development under state capitalism.

 Columbia Law School Professors Curtis J. Millhaupt and Benjamin L. Liebman are the editors of "Regulating the Visible Hand? The Institutional Implications of Chinese State Capitalism."

Illuminating this emerging field of study — and with contributions from leading scholars in China and the U.S. — Milhaupt and Liebman, directors of the Parker School of Foreign and Comparative Law and the Center for Chinese Legal Studies, respectively, explore the institutional underpinnings driving China’s evolving economy.

“Regulating the Visible Hand?” first examines the domestic governance of Chinese state capitalism, looking at institutional design and regulatory policy in areas ranging from the environment and antitrust to corporate law and taxation. It then analyzes the global consequences for the regulation of trade, investment, and finance.

Despite the emergence of a strong private sector, the editors note the continuing influence of state control that permeates all levels of Chinese business. The state finds itself in the conflicting roles of “designer” of the economy and the “enforcer” of the rules that regulate it.

 Columbia Law School Professor Katharina Pistor, together with two Chinese authors, wrote a chapter that traces China’s development from state-controlled to hybridized finance over the past two decades and draws parallels to U.S. and European experiences. Karl P. Sauvant, a Law School lecturer and resident senior fellow, wrote about China’s rising outward foreign direct investment, its reception in host countries, and implications for international investment law and policy.

The book grew out of a June 2014 workshop held at Columbia Law School that convened a group of scholars in diverse fields who later contributed papers to the collection. “With a focus on what state capitalism means for China, leading scholars from law, political science, and economics presented important cross-disciplinary work on a range of topics,” said Liebman, the Robert L. Lieff Professor of Law.

Over the course of two days, academics and practitioners from China, the U.S., Canada, the U.K., and Brazil shared their work and engaged in high-level dialogue on issues including how state-owned and state-invested enterprises (SOEs) influence the formation and enforcement of regulation, how state capitalism may constrain opportunities for private sector business formation, and how the Chinese system influences global governance regimes and norms.

“Very little analysis has been devoted to the impact of Chinese state capitalism on institutional development — for China domestically and in the realm of global trade, investment, and antitrust regulation,” said Milhaupt, the Parker Professor of Comparative Corporate Law and Fuyo Professor of Japanese Law. “Our new book examines how extensive state intervention and participation in the economy influences legal development in China in areas such as the environment, labor and corporate law, and the conundrums Chinese state capitalism poses for global economic governance.”

Liebman is recognized as one of the world’s leading scholars of Chinese law, and he has consulted with both the United States and Chinese governments. He advised Vice President Joe Biden and senior officials of the Obama administration on Chinese legal development in preparation for the 2012 visit to the United States by Xi Jinping, then the incoming president of China. Before joining the Columbia Law School faculty in 2002, he was an associate in the London and Beijing offices of Sullivan & Cromwell. He also served as a law clerk to U.S. Supreme Court Justice David Souter.

Milhaupt is a member of Columbia University’s Weatherhead East Asian Institute, the American Law Institute, and the European Corporate Governance Institute. His research focuses on the legal systems of East Asia, state capitalism, and the relationship between legal institutions and economic development. His scholarship has been featured in The Economist, The Financial Times, and The Wall Street Journal. He has testified before a Congressional commission and advised U.S. executive branch agencies on the national security implications of bilateral trade and economic relations between the United States and China.
The book is published by Oxford University Press.