From rent-seeker to power-broker - Why do Chinese officials "Xiahai"?

Abstract

In recent years, many Chinese officials, who worked in diverse government departments, left their official positions and turned to business sectors to seek another career. This phenomenon of xiahai raises an intriguing question: why did officials in an authoritarian regime like China choose to leave the government and join the business? Combining macro-level and micro-level analysis, this study explains the dynamics of xiahai phenomenon and tries to complement the existing researches on the issue of elite transformation in transitional societies. Based on the empirical evidences from fieldwork, this study finds that xiahai results from the changing context of China and the utilization of social networks by officials. This study suggests that the elites from the redistributive system have not lost their advantages in market transition as some researches predicted. Some political elites are still able to capture the opportunities created by the partial reform and re-establish their status of elites in the market economy.