Digital Corporatism: State-Business Dynamics of Digital State Capacity Building in China

Abstract

Digital state capacity has served as a critical dimension of contemporary governance worldwide, yet the foundational processes and determinants that building digital state capacity remain understudied. With a special focus on China that contributes to a unique digital leapfrogging scenario, this paper explores the digital state capacity based on information mechanisms and explores the key demand–supply dynamics underlying the state capacity-building process. Through analyzing 56,900 government procurement records from 2018–2022, we find that China’s digital state capacity building follows a supply-driven model led by state actors rather than social actors. Moreover, we demonstrate how digital corporatist relationship, indicative of the state’s increasing control of data, combined with traditional clientelist and developmentalist interactions, has created a distinctive pattern of state-business relationship in China’s digital transformation. This study contributes to understanding the institutional foundations of digital state capacity and provides new insights into how technological revolution reshapes state-business relationship for digital governance.