The purpose of this thesis is to understand the behaviour of Chinese State Capitalism in emergency events. More specifically how different types of business actors, including State Owned Enterprises and private firms, are coupled with the state actor; and what roles the Chinese state actors play in the Chinese state capitalism when there’s a public health emergency event.
Therefore, a case study from Chinese Government Policies for the Development of the Covid Vaccine and Chinese Vaccine Developer Companies is used to understand the behaviour of Chinese state capitalism. The study found that during the pandemic, SOEs and private firms had state support through different methods; even though protectionism exists in the domestic market for Chinese vaccine firms, it is still encouraged to have competition over price and quality between the domestic producers. As the study goes deeper, it is also found that some characteristics of state capitalism appeared in provincial government who has some autonomy.

CHAPTER 1: INTRODUCTION .............................................................................................. 4
CHAPTER 2: LITERATURE REVIEW .................................................................................. 6
2.1 What Is State Capitalism? ............................................................................................ 6
2.2 Chinese State Capitalism .............................................................................................. 7
2.2.1 A Brief History ..................................................................................................... 7
2.2.2 Characteristics of Chinese State Capitalism.......................................................... 8
2.2.3 More Than State Capitalism ................................................................................. 9
2.3 Theoretical Perspectives on State Capitalism .............................................................. 9
2.3.1 Managerial Agency ............................................................................................ 10
2.3.2 Political View ..................................................................................................... 11
2.3.3 Social View ........................................................................................................ 12
2.3.4 Institution-based view......................................................................................... 13
2.4 New Varieties of State Capitalism .............................................................................. 14
2.4.1 Wholly owned state-owned enterprises .............................................................. 15
2.4.2 State as majority investor ................................................................................... 15
2.4.3 State as a minority investor ................................................................................. 15
2.4.4 State strategic involvement ................................................................................. 16
2.4.5 State comparative Capitalism ............................................................................. 17
2.5 State Capitalisms in Emergency Events .................................................................... 17
CHAPTER 3: METHODOLOGY ........................................................................................... 20
3.1 Research Procedure .................................................................................................... 20
3.2 Case Study ................................................................................................................... 21
3.3 Research Background ................................................................................................. 23
3.3.1 Sinopharm .......................................................................................................... 24
3.3.2 Sinovac Biotech .................................................................................................. 24
3.4 Limitations ................................................................................................................... 26
CHAPTER 4: CASE ANALYSIS AND RESULT .................................................................. 28
4.1 Pre-Pandemic Chinese State Policies in the Pharmaceutical Industry .................... 28
4.2 State Level Co-ordinate After the Outbreak ............................................................. 29
4.2.1 China: Joint Prevention and Control Mechanism ................................................ 29
4.2.2 The United States: Operation Warp Speed ......................................................... 31
4.3 State Firm Coupling .................................................................................................... 32
4.3.1 Financial Support ............................................................................................... 32
4.3.2 Support on Research and Development .............................................................. 34
4.3.3 Sales Support and Market Protection .................................................................. 35
4.3.4 Domestic Competition and Social Responsibility ............................................... 37
4.3.5 Performance of the Vaccines .............................................................................. 39
4.4 Theoretical Perspective on State Capitalism During the Emergency ...................... 40
4.4.1 Theoretical Perspective on SOEs During the Emergency ................................... 40
4.4.2 Theoretical Perspective on Private Firms During the Emergency ....................... 41
CHAPTER 5: IMPLICATION AND CONCLUSION ........................................................... 43
APPENDIX ................................................................................................................................ 47
REFERENCES: ........................................................................................................................ 49

Adam, D. (2022). The pandemic’s true death toll: millions more than official counts. Nature. https://www.nature.com/articles/d41586-022-00104-8?error=cookies_not_supported&code=23cb1e47-efb7-413b-a41b-11a95056de3c
Aghion, P. (2011). Some Thoughts on Industrial Policy and Growth. Industrial Policy for National Champions. https://doi.org/10.7551/mitpress/9780262016018.003.0002
Alami, I., & Dixon, A. D. (2019). State capitalism(s) redux? Theories, tensions, controversies. Competition & Change, 24(1), 70-94. https://doi.org/10.1177/1024529419881949
Armitage, J. (2002). State of emergency: An introduction. In (Vol. 19, pp. 27-38): Sage Publications Thousand Oaks.
Bai, C.-E., & Xu, L. C. (2005). Incentives for CEOs with multitasks: Evidence from Chinese state-owned enterprises. Journal of Comparative Economics, 33(3), 517-539. https://doi.org/https://doi.org/10.1016/j.jce.2005.03.013
Bailey, W., Huang, W., & Yang, Z. (2011). Bank Loans with Chinese Characteristics: Some Evidence on Inside Debt in a State-Controlled Banking System. The Journal of Financial and Quantitative Analysis, 46(6), 1795-1830. http://www.jstor.org/stable/41409668
Blanchette, J. (2021). Confronting the Challenge of Chinese State Capitalism. Center for Strategic and International Studies. https://www.csis.org/analysis/confronting-challenge-chinese-state-capitalism
Boslaugh, S. (2007). Secondary data sources for public health: A practical guide. Cambridge University Press.
Brand Finance. (2021). Global Soft Power Index: China in Top 10. https://brandfinance.com/press-releases/global-soft-power-index-china-in-top-10-but-stunted-by-covid-19
Brand Finance. (2022). Global Soft Power Index 2022: USA bounces back better to top of nation brand ranking. https://brandfinance.com/press-releases/global-soft-power-index-2022-usa-bounces-back-better-to-top-of-nation-brand-ranking
Bremmer, I. (2010). Article Commentary: The End of the Free Market: Who wins the war between States and Corporations? European View, 9(2), 249-252. https://doi.org/10.1007/s12290-010-0129-z
Brewster, R. (2009). Unpacking the State's Reputation. Harv. Int'l LJ, 50, 231.
Bridge Consulting. (2022). Tracking China’s COVID-19 Vaccine Distribution. https://bridgebeijing.com/our-publications/our-publications-1/china-covid-19-vaccines-tracker/#China8217s_Vaccines_by_Manufacturers
CanSino. (2020). Kang Xi Nuo Sheng Wu Yu Shang Hai Yi Yao Qian Shu Zhan Lue He Zuo Xie Shou Tui Jin Yi Miao Chan Ye Guan Tong Ji Gong Ying Bao Zhang [CanSino Biologics and Shanghai Pharmaceuticals Sign Strategic Cooperation to Promote Vaccine Industry Integration and Supply Guarantee]. CanSionBIO. https://www.cansinotech.com.cn/html/1///179/180/647.html
Chun Miao Xing Dong [Spring Sprout]. https://cmxd.work
Cimoli, M., Dosi, G., Nelson, R. R., & Stiglitz, J. (2006). Institutions and policies shaping industrial development: an introductory note.
Coase, R. H. (1937). The Nature of the Firm. Economica, 4(16), 386-405. https://doi.org/10.2307/2626876
Coe, N. M., Dicken, P., & Hess, M. (2008). Global production networks: realizing the potential. Journal of Economic Geography, 8(3), 271-295. https://doi.org/10.1093/jeg/lbn002
Dai, R. F. (2022). Ke Xing Qu Nian Yi Tian Zhuan 15 Yi [Sinovac made 1.5bn (NTD) a day in the past year]. Economic Daily News. https://money.udn.com/money/story/5604/6283024?from=edn_related_storybottom
Dharwadkar, R., George, G., & Brandes, P. (2000). Privatization in Emerging Economies: An Agency Theory Perspective. The Academy of Management Review, 25(3), 650-669. https://doi.org/10.2307/259316
Dixit, A. (2002). Incentives and Organizations in the Public Sector: An Interpretative Review. The Journal of Human Resources, 37(4), 696-727. https://doi.org/10.2307/3069614
Du, B. (2021). Xin Guan Yi Miao Bei Hou De Jin Rong Li Liang: Beijing Yin Hang Ke Ji Jin Rong Zhu Li Ke Xing “Ke Guan Xing Dong” [The financial power behind the covid-19 vaccine: Bank of Beijing's technology finance assists Kexing's "Overcome Covid Action."]. Financial News. https://www.financialnews.com.cn/yh/shd/202106/t20210618_221290.html
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of management review, 14(4), 532-550.
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of management journal, 50(1), 25-32.
Firth, M., Fung, P. M. Y., & Rui, O. M. (2006). Corporate performance and CEO compensation in China. Journal of Corporate Finance, 12(4), 693-714. https://doi.org/https://doi.org/10.1016/j.jcorpfin.2005.03.002
Girma, S., & Gong, Y. (2008). Putting people first? Chinese state-owned enterprises' adjustment to globalisation. International Journal of Industrial Organization, 26(2), 573-585. https://doi.org/https://doi.org/10.1016/j.ijindorg.2007.04.003
Gostin, L. O., Sapsin, J. W., Teret, S. P., Burris, S., Mair, J. S., Hodge Jr, J. G., & Vernick, J. S. (2002). The Model State Emergency Health Powers Act: planning for and response to bioterrorism and naturally occurring infectious diseases. JAMA, 288(5), 622-628.
Grosman, A., Wright, M., & Okhmatovskiy, I. (2016). State control and corporate governance in transition economies:25 years on from 1989. Corporate Governance, 24, 200-221.
Grossman, G. M., & Helpman, E. (1992). Protection for sale. In: National Bureau of Economic Research Cambridge, Mass., USA.
Hirschman, A. O. (1958). The strategy of economic development. Yale Economic Press.
Howard, M. C., & King, J. E. (2001). ‘State Capitalism’ in the Soviet Union. History of Economics Review, 34(1), 110-126. https://doi.org/10.1080/10370196.2001.11733360
Hu, Y., & Chen, S. (2021). What can we learn from COVID-19 vaccine R&D in China? A discussion from a public policy perspective. Journal of Travel Medicine, 28(4). https://doi.org/10.1093/jtm/taab026
Inoue, C. F. K. V., Lazzarini, S. G., & Musacchio, A. (2013). LEVIATHAN AS A MINORITY SHAREHOLDER: FIRM-LEVEL IMPLICATIONS OF STATE EQUITY PURCHASES. The Academy of Management Journal, 56(6), 1775-1801. http://www.jstor.org/stable/43589962
Karásková, I., & Blablová, V. (2021). The logic of China’s vaccine diplomacy. The Diplomat, 24.
Khanna, T., & Palepu, K. (2000). The Future of Business Groups in Emerging Markets: Long-Run Evidence from Chile. The Academy of Management Journal, 43(3), 268-285. https://doi.org/10.2307/1556395
Klein, P. G., Mahoney, J. T., McGahan, A. M., & Pitelis, C. N. (2013). Capabilities and Strategic Entrepreneurship in Public Organizations. Strategic Entrepreneurship Journal, 7, 70-91.
Kogut, B. (1991). Country Capabilities and the Permeability of Borders. Strategic Management Journal, 12, 33-47. http://www.jstor.org/stable/2486640
Lazzarini, S. G., & Musacchio, A. (2014). Reinventing State Capitalism: Leviathan in Business, Brazil and Beyond. . Cambridge University Press.
Lin, J. Y., Cai, F., & Li, Z. (1998). Competition, Policy Burdens, and State-Owned Enterprise Reform. The American Economic Review, 88(2), 422-427. http://www.jstor.org/stable/116960
Lin, J. Y., & Tan, G. (1999). Policy Burdens, Accountability, and the Soft Budget Constraint. American Economic Review, 89(2), 426-431. https://doi.org/10.1257/aer.89.2.426
Lin, L.-W., & Milhaupt, C. J. (2013). We Are the (National) Champions: Understanding the Mechanisms of State Capitalism in China. Stanford Law Review, 65(4), 697-759. http://www.jstor.org/stable/23530170
Loo, B. P. (2004). Telecommunications reforms in China: towards an analytical framework. Telecommunications Policy, 28(9-10), 697-714.
McMenamin, M. E., Nealon, J., Lin, Y., Wong, J. Y., Cheung, J. K., Lau, E. H. Y., Wu, P., Leung, G. M., & Cowling, B. J. (2022). Vaccine effectiveness of two and three doses of BNT162b2 and CoronaVac against COVID-19 in Hong Kong. medRxiv, 2022.2003.2022.22272769. https://doi.org/10.1101/2022.03.22.22272769
McNally, C. A. (2012). Sino-Capitalism: China's Reemergence and the International Political Economy. World Politics, 64(4), 741-776. https://doi.org/10.1017/S0043887112000202
McNally, C. A. (2013). Refurbishing State Capitalism: A Policy Analysis of Efforts to Rebalance China's Political Economy. Journal of Current Chinese Affairs, 42(4), 45-71. https://doi.org/10.1177/186810261304200403
Merriam, S. B., & Tisdell, E. J. (2015). Qualitative research: A guide to design and implementation. John Wiley & Sons.
Murphy, K. M., Shleifer, A., & Vishny, R. W. (1989). Industrialization and the big push. Journal of political economy, 97(5), 1003-1026.
Murray, A., & Meyer, D. (2020). The Fortune Global 500 is now more Chinese than American. https://fortune.com/2020/08/10/fortune-global-500-china-rise-ceo-daily/
Musacchio, A., Lazzarini, S. G., & Aguilera, R. V. (2015). New varieties of state capitalism: Strategic and governance implications. Academy of Management Perspectives, 29(1), 115-131.
Nölke, A. (2014). Multinational corporations from emerging markets: State capitalism 3.0. Springer.
North, D. C. (1990). Institutions, institutional change and economic performance. In. Cambridge: Cambridge University Press.
Peng, M. W., Bruton, G. D., Stan, C. V., & Huang, Y. (2016). Theories of the (state-owned) firm. Asia Pacific Journal of Management, 33(2), 293-317. https://doi.org/10.1007/s10490-016-9462-3
Pollock, F. (1941). State capitalism: its possibilities and limitations. Zeitschrift für Sozialforschung, 9(2), 200-225.
Reuters. Mainland China: the latest coronavirus counts, charts and maps. Reuters. https://graphics.reuters.com/world-coronavirus-tracker-and-maps/countries-and-territories/china/
Robson, C., & McCartan, K. (2016). Real World Research (4 ed.). Wiley.
Rodrik, D. (2004). Industrial policy for the twenty-first century. Available at SSRN 666808.
Rodrik, D. (2007). One Economics, Many Recipes
Globalization, Institutions, and Economic Growth. Princeton University Press. https://doi.org/10.2307/j.ctvcm4jbh
Sinopharm. (2020). Quan Qiu Shou Jia Xin Guan Bing Du Mie Huo Yi Miao Huo De Guo Jia Yao Jian Ju Lin Chuang Shi Yan Pi Jian Guo Yao Ji Tuan Zhong Guo Sheng Wu Yan Fa Chu Yi Qing Fang Kong Zu Ji Jue Zhan Jue Sheng “Sha Shou Jian” [The world's first inactivated vaccine against COVID-19 has obtained clinical trial approval from the State Food and Drug Administration Sinopharm Group has developed a "killer" for the decisive battle of epidemic prevention and control]. SASAC. http://www.sasac.gov.cn/n2588025/n2588119/c14327398/content.html
Sinovac. (2008). Ke Xing: Wei Ren Lei Xiao Chu Ji Bing Ti Gong Yi Miao [SINOVAC: Sinovac: Provide vaccines to eliminate diseases for human beings]. http://www.sinovac.com/news/shownews.php?id=98
Song, W. (2021). Covid-19 vaccines: Has China made more than other countries combined? BBC News. https://www.bbc.com/news/58808889
Stevenson, A. (2022). Why China Doesn’t Have an mRNA Vaccine for Covid. The New York Times. https://www.nytimes.com/2022/02/18/business/china-coronavirus-vaccines.html?_ga=2.216248085.2021527794.1654628299-2085421596.1654443364
The Economist Intelligence Unit. (2021). What next for vaccine diplomacy?
The State Council Information Office (SCIO). (2020). Fighting COVID-19: China in Action. http://www.scio.gov.cn/zfbps/32832/Document/1681809/1681809.htm
U.S. Department of Defense. (2020). Trump Administration Announces Framework and Leadership for 'Operation Warp Speed'. https://www.defense.gov/News/Releases/Release/Article/2310750/trump-administration-announces-framework-and-leadership-for-operation-warp-speed/
Walter, A., & Zhang, X. (2012). Understanding variations and changes in East Asian capitalism. In East Asian Capitalism: Diversity, Continiuity and Change (pp. 247-280). Oxford University Press.
Wang. Q, & Long, J. (2011). Guanggu Sheng Wu Cheng [Biolake in the “Optics Valley”]. www.sciencenet.cn. https://news.sciencenet.cn/sbhtmlnews/2011/10/249761.shtm
Wright, M., Wood, G., Musacchio, A., Okhmatovskiy, I., Grosman, A., & Doh, J. P. (2021). State capitalism in international context: Varieties and variations. Journal of World Business, 56(2), 101160.
Wu, W. (2020). Ke Ji Bu: Cong Si Ge Fang Mian Fa Li Que Bao Ying Ji Ke Ji Gong Guan Xiang Mu Shi Shi [Ministry of Science and Technology: Make efforts from four aspects to ensure the implementation of emergency scientific and technological projects]. People.Cn. http://health.people.com.cn/n1/2020/0403/c14739-31661278.html
Yan, Y., & Han, Q. (2021). Zhi Xu Yao Da Yi Zhen Ji De Xin Guan Yi Miao Yi Zai Shang Hai Jie Zhong Bu Tui Jian Liang Zhong Yi Miao Tong Shi Jie Zhong [The covid vaccine that only needs one injection has been introduced in Shanghai. It is not recommended to53
vaccinate two vaccines at the same time]. people.cn.
http://sh.people.com.cn/BIG5/n2/2021/0517/c176737-34729357.html
Yin, R. K. (2009). Case study research: Design and methods (Vol. 5). sage.
Zhu, F.-C., Li, Y.-H., Guan, X.-H., Hou, L.-H., Wang, W.-J., Li, J.-X., Wu, S.-P., Wang, B.-S., Wang, Z., & Wang, L. (2020). Safety, tolerability, and immunogenicity of a recombinant adenovirus type-5 vectored COVID-19 vaccine: a dose-escalation, open-label, non-randomised, first-in-human trial. The Lancet, 395(10240), 1845-1854.
Zhu, Y. (2022). Wo Guo Xin Guan Bing Du Yi Miao Zhi Chu Fei Yong 1200 Yu Yuan [State's Covid-19 Vaccine Expenditure Cost More Than 120 Billion Yuan]. People’s Daily. http://www.gov.cn/xinwen/2022-04/03/content_5683325.htm