Swinging between centralisation and decentralisation: China Railway Express Service and its process of assets discovery and recovery

Abstract

This paper analyses a process of decentralisation and re-centralisation in China’s railway system between 1978 and 2013 (i.e. Ministry of Railways reform and its end). The Chinese government first decentralised the railway sector, encouraged business diversifications, and incentivised local cadres to mobilise idle productive resources. Many entrepreneurial initiatives, such as the railway express delivery service, have proved successful in adding new profit stream. Born as an ad hoc solution to fix soft budgetary constraints, later it metamorphosed into market-oriented state capitalism. The government later re-centralised the railway express services as the China Railway Express, and the newly recovered entity became a centralised enterprise (yanqqi 央企), venturing into an international competitive enterprise. The emergence of the China Railway Express suggests that decentralisation in China was not always an end to the property rights rearrangements, and that government was selective in converging to the parallel western privatisation model.