The making of government-business relationships through state rescaling: a policy analysis of China’s artificial intelligence industry

Developing artificial intelligence (AI) is a priority on China’s state agenda, yet the constitutive state roles in AI development are understudied. Against the background of the coexistence of authoritarianism and market liberalism in the governance of the Chinese economy, state rescaling is a useful lens to understand how China is developing this new strategic sector. This paper proposes an analytical framework reifying vertical and horizontal scalar relations via the rescaling lens and three state roles (owner, promoter, and supervisor) to explore how government-business relationships are made. More than 100 Chinese AI policy documents have been collected from central, provincial, and city levels for a systematic multi-scalar policy analysis. As a result, this paper captures both downscaling/upscaling within the state hierarchy and statization/destatization between state and non-state actors in China’s AI development. A series of intertwined state rescaling practices manifest themselves in the state roles figuring in three functionalities of government-business relationships (sponsorship, cultivation, and disciplining). It is argued that the state roles are not pre-given modalities in a setting of a specific industry. The restructuring and even revolutionizing effects of AI in the socio-economic systems prompt non-state actors to respond proactively, which shapes the variegated functionalities of government-business relationships.