Initiative for U.S.-China Dialogue on Global Issues

Before getting into your new book, briefly tell us a bit about your background and the path that led you towards researching China’s political economy and the intersection between politics and technology. 

I did my Ph.D. in political science at Stanford University, and initially, I thought I’d focus on U.S.-China relations. But everything changed when a casual conversation with a friend introduced me to China’s rapidly growing e-commerce market. It immediately sparked my interest in China’s digital economy and its broader implications. 

At the time, China’s emerging online market was largely overlooked by most Westerners. Alibaba hadn’t yet gone public in the United States, and most people hadn’t even heard of Jack Ma. China’s tech industry wasn’t in the spotlight, and there was a prevailing belief that China was simply a copycat with little innovation of its own. As a political science student, studying e-commerce felt risky and unconventional. But the phenomenon was so fascinating that I was willing to pursue it, even if it meant risking my degree. 

In retrospect, I suppose you could say that when facing two diverging roads, I chose the road less traveled. I wasn’t sure if it would lead to anything, but I was eager to see the unseen.

The Transformative Impact of E-commerce 

Give us the overall background behind the book and how it came together. 

My interest in e-commerce comes from its potential to bridge the rural-urban divide. My parents grew up in the countryside and were able to change their lives through education, but many of their relatives stayed in the village and lived modest lives. I visited my hometown every year as a child and saw the stark differences between city and village life. I always wondered whether there was a way to close that gap. The rural-urban divide in China has been a long-standing issue, and it’s a major challenge for the state. 

Through fieldwork in China, I saw how e-commerce transformed remote villages into thriving hubs. I became interested in whether e-commerce could democratize market access, allowing small vendors and rural peasants to reach national markets.

One of the most memorable interviews I had was with a fishmonger from Wantou village in Shandong. In addition to selling fish, he was helping his son manage customer service for an online e-commerce store that sold handicrafts. The interesting part was that this man had never used a computer before embarking on this venture. To handle customer service, he taught himself how to type. Despite being in his sixties or seventies, he only used one finger to type. His friends found it amusing and often joked, calling him a "kung fu master" practicing the “one-finger Zen.” This showed me how e-commerce could be truly transformative.

What are some of the most important takeaways from the book in terms of what it can tell us about China’s e-commerce industry and broader political economy?

One key takeaway is that China’s e-commerce boom should not be taken for granted. Many people assume that China’s huge demand for e-commerce was a natural result of its large population. But there was a real challenge in building trust in the market. About 20 years ago, China had weak rule of law, widespread counterfeiting, and low credit card usage. Consumers had little legal protection and were vulnerable to fraud, making them hesitant to shop online. It’s also puzzling why people would shift from offline shopping, where they can inspect products and receive them immediately, to online shopping. So it’s quite surprising that despite these challenges, China’s e-commerce market grew so rapidly, leapfrogging even developed economies with stronger institutions. 

China addressed these issues through what I call “institutional outsourcing.” The government effectively outsourced much of the responsibility for creating and enforcing institutions to digital platforms like Alibaba’s Taobao. There were two main factors at play. First, gaps in government institutions forced e-commerce platforms to create their own systems for contract enforcement, fraud detection, and dispute resolution. Second, despite the disruptive nature of these platforms, the authoritarian government tolerated, and even partnered with, these private companies. Rather than directly providing these institutions, the government allowed the platforms to operate with a high degree of autonomy. 

In my book, I explore how these platforms solved the trust issue and why the Chinese government, often seen as interventionist, allowed such powerful private platforms to rise. I also examine how the government and these platforms worked together to fill institutional gaps and foster the growth of e-commerce.

Institutional outsourcing goes well beyond e-commerce. The state has outsourced many institutional functions to digital platforms of various types, including social media platforms, ride-sharing companies, and other platforms. 

These platforms have formed extensive collaborative agreements with various levels of government and play a key role not just in economic governance, but also in social and political governance. 

For example, censorship is outsourced to platforms, and during the COVID-19 pandemic, the government asked big platforms to develop and maintain contact-tracing apps. In other words, state capacity isn’t always built by the state itself, even in a country like China where the government is very strong.

A Digital Path to Growth

Why should observers of China, whether they’re academics, policymakers, or businesspeople, care about China’s e-commerce industry? In other words, what are the broader implications of your research for deepening our understanding of China today?

In the preface to Civilization and Capitalism, French historian Fernand Braudel wrote that “the economic history of the world is the entire history of the world, but seen from a certain vantage-point—that of the economy.” Similarly, I view the e-commerce market as a lens through which to examine profound transformations in China’s economic and political landscape. The findings from this book have broader implications across four key domains: China’s growth trajectory, state-business relations, governance, and the politics of the internet. These themes are explored in detail in the final chapter. 

This book is not merely about a nascent technology, a growing market, or even China in isolation. Rather, it connects China’s technological advancements to enduring global challenges: the intricate relationship between institutions and growth, the long and uneven road to good governance, and the delicate interplay between public and private regulatory powers. 

More specifically, China’s e-commerce market matters because it exemplifies a digital path to growth. While the importance of government institutions is well-established—as underscored by many distinguished scholars, including the 2024 Nobel Prize winners in economics—it has become increasingly clear that firm-provided digital institutions are equally vital in today’s world. 

This book encourages readers to see digital infrastructures not simply as technological tools but as transformative forces reshaping governance, expanding market access, and influencing global development trajectories.

As demonstrated by China’s e-commerce market, private institutions and robust platform-based governance can emerge organically. These platforms have developed innovative solutions to complex governance challenges that governments often struggle to address effectively. However, the path to digital development is far from straightforward. This book also examines the limitations of these digital institutions and the challenges governments face in effectively regulating them. For instance, while government oversight is necessary to prevent platforms from abusing their power, overly stringent regulations can stifle innovation, undermining the platforms’ capacity to provide effective governance. Achieving the right balance between regulation and innovation is critical for sustainable development.

Now that you’ve finished your book, what’s top of mind for your research moving forward? What are some of the next projects that you’ll be working on?

I’m currently working on research related to multinational firms and intellectual property rights litigation in China. I’ve also been exploring a rather counterintuitive trend in China: despite increasing political centralization, there has been a wave of deregulation in certain parts of the economy. I’ve been trying to understand why this is happening, and my intuition is that, while the Chinese government is very powerful, there are limits to what it can control. Additionally, some of my other work focuses on U.S.-China trade, specifically how exports from Chinese firms differ from those of U.S. multinationals operating in China in terms of their political impact in the United States.