Legitimizing State Capitalism: Nationalism and Public Support for State Ownership in China
Why do citizens support state ownership despite its widely perceived inefficiency? Existing explanations emphasize material interests and socialist legacies; this paper identifies a powerful but overlooked ideational source of legitimacy — nationalism — that sustains public support for China's state-capitalist system. Drawing on a large corpus of party newspapers (1990–2024), I show that the Chinese state has actively reframed state-owned enterprises (SOEs) as symbols of the nation through propaganda. Using nationally representative surveys (2001–2025) and a factorial difference-in-differences design, I find that nationalism is one of the strongest predictors and likely a causal driver of support for state ownership. A conjoint experiment further reveals the mechanism: outgroup animosity, or the perception of SOEs as shields against external threats, primarily drives the effect of nationalism on support for the state-capitalist system. These findings suggest that authoritarian regimes can sustain the legitimacy of state-led development not only through material performance but through symbolic and emotional appeals, pointing to an affective foundation of economic legitimacy under authoritarianism.