Transformation of China's State Commercial Sector Governance:
A Case Study of China’s Largest Insurance Company, China Life

Abstract

This thesis seeks to detail and advance path-based explanations for the changing character and conduct of Chinese state sector governance at both evolving national and current leading firm level. The ruling Chinese party-state has expressed concern about how governance failings lower operational efficiency in the state sector over three decades while continuing to devise and implement different reforms in the process. However, empirical research often suggests that its gradualist or incremental approach to reform can also result in a mosaic of different transplanted governance institutions which are not necessarily fully or immediately compatible with China’s own unique context.
This thesis specifically examines the transformative dynamics of China’s state sector governance system through the prism of path based theory in order to provide a more holistic and in-depth understanding of how that context and leading Chinese actors’ own conduct both exert salient influences over governance practices. It uses a mixed-method strategy at both national and firm levels to derive a deeper and more holistic understanding than any one single method alone might do. Overall it finds governance reform to be characterized by a relatively unsynchronised and challengeable process of policy making and implementation which allows for some degree of flexibility and openness. Its more detailed findings also question path dependency type explanations' emphasis upon continued institutional stability and reproduction. These findings further suggest that the actual reform is not necessarily the collective and consensual quest for ever high levels of efficiency which certain financial economists typically assume. It can also depend upon the outcome of other competing pressures between increased marketization and competition on one hand, and different demands for maintaining extant governance structures and vested interests on the other. The former are no less legitimate and, in principle, urgent concerns for both policy makers and other leading stakeholders than the latter. Embedded characteristics cannot just be reduced to efficiency-technocratic considerations for inducing different competitive performance when these neglect how redistributive an economic governance system can be, and also the essentially mediated efficacy of certain transplanted mechanisms. Much of the convergence-divergence debate regarding national economic governance systems has nevertheless been conceived in efficiency and competition terms alone. However, this thesis suggests that the promulgation and transplantation of SSG reform policies needs to take the specific country context into greater consideration if it is to be both more meaningful and effective.