The economic sociology of China`s market transition: A Conceptual Analysis

Despite central importance of the market under China's reform context, astonishingly little attention has been paid to the question of what exactly the market is and what constitutes “marketization. ” This paper seeks to remedy the limitations of previous literature on China's market transition by specifying the definition of markets and their underlining organizational and structural diversity. Instead of undifferentiated, abstract notion of the market as an amorphous price-making mechanism in the mainstream economics, the paper adopts a view of the market as defined in economic sociology: that the market is a concrete social institution, more or less embodying diverse organizational principles that evolved under different historical context, and socially constructed by actors embedded in a web of institutional affiliations and networks of social ties. From this conceptual background, I derive propositions regarding different connotations of “marketization” and the path dependent nature of market formation in the context of China s transition away from bureaucratic allocation.