Part II establishes the alternative law and political economy framework by unpacking the dynamics between politics and law in the process of China’s market reforms. It starts with describing the relationship between law and politics in constructing one of the primary mechanisms of macro control in China – China’s socio-economic development blueprint, the “Five-Year Plan.”

It then moves to a chapter-by-chapter analysis of the evolving roles of law during China’s market reforms, outlining a three-stage shift in the allocation of market governance authorities within the Party-state system through legal evidence.

Throughout this part of the book, the author examines the legal configurations of political-power dynamics through a systematic investigation of the vast body of market-related primary and secondary sources of law and Chinese Communist Party (CCP) documents that have been promulgated in China since the early reforms until the present day. This Part reflects how two functions of law – economic and political – have developed side by side, each supporting the other.

Chapter 4 examines legal configurations of political power dynamics during the Legal Modernization Era (ca. 1992–2010) – a golden age for legal reformers in China. The chapter reviews the development of significant national-level economic laws and regulations that gradually replaced many of the fragmented and probationary rules used earlier. The analysis of legal and policy documents suggests that the use of law in this period was consciously directed in two main directions: the use of law to structure and support the creation of markets (i.e., the economic function) and the use of law to reconfigure governance capacities and boost more centralized market regularity within the Party-state system (i.e., the political function). These two functions of law also set the foundation for what is known today as China’s state capitalism and its dominance in the domestic and international markets.