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How Elite Networks Shape Private Enterprises’ Social Welfare Provision in Rural China

In a context of increased state expectations that Chinese private enterprise will “give back to society,” this article argues that the way that locally developed private enterprises engage in welfare and poverty relief in rural China is decisively shaped by the social networks of the owners. Three very different industrial structures located near to each other in Fanhua County, Shandong Province, are compared. These are: a small group of large conglomerates situated near the county seat, a networked cluster of over 3,000 mostly small and micro furniture companies, and a cluster of midsize companies that produce sheet steel. Industrial structures have shaped the owners’ social networks in each of these three industries. The norms embedded in the businesspeople’s social/business networks, which are affected by the influence on the networks of political authority, factory-owner peers, and ordinary locals, orient the private enterprise owners toward providing or not providing social welfare in particular ways.