On Georgetown University’s McDonough School of Business Week: E-commerce is a big deal in China.
Lizhu Liu, associate professor, discusses why.
Lizhi Liu is an Assistant Professor at Georgetown University’s McDonough School of Business and the author of the award-winning book From Click to Boom: The Political Economy of E-commerce in China (Princeton University Press, 2024). Her research on the politics of trade and technology has earned multiple awards and funding from prestigious institutions, including the Gates Foundation. Her work has been featured in Bloomberg, WIRED, the WIRE China, and the South China Morning Post. Notably, her book was recognized by the China-Britain Business Council as one of the “Best Books on China of 2024” and won a silver medal in the 2025 Axiom Business Book Awards (International Business/Globalization category), in addition to receiving two prestigious dissertation awards for its earlier draft.
The Political Economy of E-Commerce in China
In just two decades, China has built from scratch the world’s largest e-commerce market—boasting over 800 million users and accounting for half of global online retail sales.
But here’s the puzzle: China’s e-commerce boom didn’t happen in ideal conditions. It took off during a time when fake products were everywhere, credit card adoption was low, and the legal system was weak. In short, it wasn’t the kind of place where you’d expect people to trust online shopping. So how did trust emerge?
In my book, I argue that the answer lies in institutional outsourcing—a model in which the Chinese government relies on private tech platforms to fill governance gaps. These platforms don’t just sell products; they build and enforce the rules that make markets work.
Take Alibaba’s Taobao, often described as China’s eBay. To win consumer trust, it developed its own enforcement tools: mandatory escrow payments, return shipping insurance, credit scoring systems like FICO, online hearings for rule changes, and even online juries of ordinary users to resolve disputes. These systems often surpassed their Western counterparts—not because of better technology, but because Chinese platforms had to build trust from the ground up.
At first, the Chinese government tolerated these private systems. But over time—especially after the tech crackdown—it began signing formal agreements with platforms, granting them quasi-public roles in legal enforcement and governance.
That’s why in China, e-commerce isn’t just about shopping—it’s about how the state governs.
Read More:
[Princeton University Press] – From Click to Boom: The Political Economy of E-Commerce in China
