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INTRODUCTION
THE extensive market-oriented reform of the Chinese economy over the past quarter century raises the question of how, in terms of institutions and norms, the Chinese party-state is choosing to govern its markets. The Chinese government clearly will retain a significant role in the market system, and not solely because of its tradition of central planning. Political economy scholarship has argued persuasively that, in even the most market-oriented systems, firms rely extensively on governments using consistent regulatory systems to foster conditions for successful markets.1 Even the economic deregulation that has swept through much of the world in the past two decades involves creating a new role for the state-new institutions, new rules-rather than eliminating its influence.2 Moreover, as countries deepen their integration into international markets, as China has done, the role of states remains far from minimal.3
The question surrounding the governance of China's markets, then, is not whether the government will remain involved but, rather, what form the new "regulatory state" will take. The subject is important because the institutions and norms now taking root in China will constitute the foundation for the state's role in the economy for the foreseeable future. This article examines one crucial set of industries toward which the Chinese leadership has turned its regulatory sights: the strategic industries regarded as the "commanding heights" (jingji mingmai, or literally, "economic lifeline") of the domestic economy. Since 1992, the State Council (the PRCs executive arm) has established new regulatory organizations for major industries in infrastructure and financial services. In formulating its regulatory system for these industries, the Chinese government has been keenly aware of the international model that has become hegemonic in the past decade: the "independent regulator" model. Indeed, the government has initiated many changes that appear to adhere to this model. Yet how closely do the new organizations actually approximate the independent regulator model, both institutionally and normatively? Do they confirm that a new political economy of regulation is emerging in China, as suggested by some recent work?4 Or are these organizations merely old wine in new bottles; in other words, do they suggest patterns that conform more closely with the largely discredited model of the East Asian "developmental state"?
The answer lies somewhere in between these two extremes....