Marketization and Party-State Transformation How the Communist Party of China Outmaneuvered the Washington Consensus

1 Introduction: China as a Post-Cold War World Outlier  2 A Proposed Framework: Marketization and Party-State Transformation  3 The Making of a Socialist Developmental State: Endogenous Talent Reallocation and Statecraft of Marketization  4 Technocrats, Technopols, and the Politics of Market Reform: Commission Rivalry and the Forging of the Socialist Developmental State  5 Fostering Quality Market Institutions: The Central Advisory Commission and the Four Modernizations of Cadres   6 Conclusion: Possible Future

Biography

Kezhou Xiao is Assistant Professor at the Institute of Guangdong, Hong Kong and Macao Development Studies, Sun Yat-sen University. His research examines the political economy of China’s reform and development, focusing on state-business relations, cadre policy, and party-state transformation. He received his Ph.D. in Economics from the London School of Economics and Political Science.

“Why did China’s party-state thrive while communist regimes elsewhere collapsed? Kezhou Xiao argues that the Communist Party of China outmaneuvered the Washington Consensus by embracing its economic program while rejecting its political prescriptions — transforming itself into a Socialist Developmental State. Two cadre policy instruments proved decisive: the Central Advisory Commission, which retired the revolutionary old guard, and the Four Modernizations of Cadres, which installed market-oriented technocrats. Combining formal theory, original biographical data, and quasi-experimental evidence, this book shows that organizational self-transformation, not liberalization alone, powered China’s economic takeoff — with profound implications for theories of development, transition, and authoritarian resilience.”

Yuhua Wang, Ford Foundation Professor of Modern China Studies, Harvard University

“China demonstrates a strong case of how a party-state system could possibly engineer a market transition? By tracing how China’s cadre system reform restructured the incentives and capacities of the officials, and rebuilt the organizational foundations through which pro-growth policy was designed, contested, and implemented, Kezhou Xiao’s book offers a rigorous and compelling account of how political change enabled economic change.”

Zhang Jun, Professor of Economics and Dean, School of Economics, Fudan University

“Few questions matter more for understanding China than how its cadres were remade. With rich empirical analysis, this book shows how marketization transformed the recruitment, composition, and logic of the party-state from within — and why that legacy shapes governance in the Xi Jinping era. Clear, original, and essential reading for students of contemporary Chinese politics.”

Cheng Li, Professor of Political Science and Founding Director, Centre on Contemporary China and the World, The University of Hong Kong

“For a generation, the Washington Consensus shaped how outsiders understood — and misunderstood — China’s development. Kezhou Xiao’s Marketization and Party-State Transformation offers a long-overdue corrective grounded in original data. Through meticulous analysis of commission rivalry, cadre selection, and the Four Modernizations, Xiao demonstrates that China’s market transition was not a concession to neoliberal orthodoxy but a product of deliberate party-state transformation. This book reframes the central debate in China’s political economy at exactly the moment when that debate matters most.”

Cui Zhiyuan, Professor of Political Economy, School of Public Policy and Management, Tsinghua University

“Students of state-business relations have long sought to explain how China’s party-state managed market transition without the institutional blueprints prescribed by Western development economics. Kezhou Xiao’s Marketization and Party-State Transformation provides a compelling answer. Through careful analysis of commission rivalry and cadre selection, he reveals the specific political mechanisms through which reform consensus was built and implemented from within the party-state. For scholars of political-business interaction and local governance in China, this is essential and illuminating reading.”

Dongya Huang, Professor and Associate Dean, School of Government, Sun Yat-sen University