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.

The chapter, termed Legalized Politicization Era (2010–present), examines the role of law in securing a new political–economic equilibrium. In this era, the consequences of state capitalism, China’s economic turning point, and a legitimacy crisis in the Party-state’s rule, advanced the use of law in two directions: intensifying the presence of the regulatory state in the market on the one hand while shifting market governance powers directly to the CCP itself on the other. The chapter describes how in these developments the law has been assigned a meaningful and more explicit role in steering capital flows and structuring markets. It argues that taking notice of the two functions of law has become ever more relevant.