Download Building Trust in Government in China

Changes in Economy, Central-Local
Relations, and the Emergence of Civil
Society in China
Hairong Lai
Deputy Director and Senior Fellow
China Center for Comparative Politics and Economics
CCTB, CC of CCP
Overview: 30 years of moving
away from “totalitarianism”
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Changed and Changing:
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Smaller State and Bigger Society
Power distribution within the shrinking state power:
decentralization or devolution
Emerging Check and Balance
Institutionalization of peaceful power transfer
Reconfiguration of the Ideology: goals, perceptions,
strategies, instruments
Changed citizenry
Changes in Economy:
Marketization and Privatization
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Absolute withdrawal of the state in intervening the
economy:
 Freeing pricing: mid-1980s (dual track pricing),
mid-1990s (converging to the market)
 Canceling production and marketing plans for
SOEs
 Privatizing SOEs and TVEs: 1992 on, Upward
spreading (small to large scale, from county to
provincial levels, and partial privatization of
centrally subordinated: listed)
Relative withdrawal: Mushrooming of Privately
Owned Enterprises, Foreign Direct Investments, Joint
Ventures
Accelerated Privatization: changing
ownership structure of GDP
State sector
Private sector
1978 (Yan, 2005)
99.1%
0.9%
1997 (Yan, 2005)
75.8%
24.2%
2006 (Li, 2007)
35%
65%
2010 (prediction)
20%
80%
Remaining State-Owned
Industries
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Oil, Railway, Aviation, Telecommunication,
Electricity (except for hydropower in a few
provinces)
Banking (emerging competition) : little
accessibility to small- medium- scale privately
owned enterprises
Education, Health Care (emerging
competition), Traditional Media (weakly
emerging competition)
Increasing Liberty in the
Society
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No longer controlled by the state: migration,
education (study abroad), employment,
housing, transportation, and consumptions…
Emergence and expansion of private sphere:
diversified values, life style, moral codes.
The Chronologically Changing Battle
Fields for the Interaction between the
State and the Society
Years
Fields
Early 1980s
Cloth, Hair-style
Late 1980s
Pop music, Pop arts,
Literature
Sexuality
1980s and 1990s
Emerging Civil Society
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Civil society organizations: 3 millions (> 300,000
registered and > 2.6 millions unregistered) (Yu
Keping, 2007)
Two examples: A Village Education Charity Fund, A
Car Club for Tourism
The citizen: resourceful, independent, and Internet
as a communication platform (1995-2005)
The State: struggling with cooperative/subversive
perception
Still very weak, but developing fast
Unexpected show-up: 2008 Sichuan earth quake
alleviation efforts
Political System: simplified
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Five levels: Center, Provinces (34-3),
Prefectures (330), Counties (2,600),
and Townships (38,000)
Loosely connected to the party-state:
villages (620,000)
Unitary system directed from top down
Decentralization within the
Shrunk State Power
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Fiscal federalism: from bargaining to
institutionalization (1994)
Economic activities administration:
registration, investment projects
Social life administration: social security,
health care, education, passport granting
Decision making: city planning, public utilities,
infrastructure
Increasing Role of Localities in
Promoting Reform
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Initiatives taken by localities without central plans:
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1)privatization (1992)
2)semi-competitive election (mid-1990s)
Pattern of reform in 1980s (e.g. Special Economic
Zones): centrally driven
Pattern of reform since 1990s: central initiatives +
local initiatives
Motivation for local initiatives: locality’s lack of
resources to hold responsibility; competition among
localities (private sector promotion, FDI attraction).
Path Dependence of Relatively
Decentralized Command Economy: Maoist
Version of Stalinization
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1949-1957: centralization
1958-1960 (Great Leap Forward): decentralization
1961-1965: centralization
1966-1978 (Cultural Revolution): decentralization
(irreversible)
1978-1993: continued decentralization
1994 on: partial recentralization of fiscal revenues,
expenditure responsibility and accompanying
decision-making power further decentralized
Institutionalization of Power
Holding and Transfer
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Before 1990s: no terms, no limitations
After 1997: term of office—5 years; Limited terms—2
Peaceful transfer of highest power:
 1) 1997 (unprecedented in socialist China),
 2) 2002 (unprecedented in 2000 years of China),
 3) 2007 (consolidation)
Real Existing socialist states (party-states): either died at office
(life-long) or demoted through harsh power struggle;
The Magnitude of Peaceful Power
Transfer (generational) since 1997
Standing
Committee of the
Politburo (7 or 9
members)
Politburo
(20-25
members)
Central
Committee
(around 190
members)
Alternate
Members of
the C.C.
(around 130)
1997
2/7
50%
n.a.
n.a.
2002
6/7(including
general secretary)
70%
~50%
~ 50%
2007
4/9
40%
~50%
~50%
2012
(predictable)
2/9 (including
general secretary)
~50%
~50%
~50%
Conditions for the Institutionalization
of Power Holding and Transfer
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Elite: lessons from Cultural Revolution and early
disasters
Critical Actor: Deng Xiaoping
Societal Condition: 1)separation of politics and
economy, 2)separation of state and society
Power change and the society: limited influence to
each other
Elite: no need to invoke and mobilize the society.
Society: little interest to engage the power transfer.
Challenges in China: mixture of
conflicting elements
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Inconsistency among norms
Inconsistency between norms and
actual life
Inconsistency among levels, regions,
social stratus, different elite…
Biggest Challenge: managing the
increasing participation in political
process
Looking Ahead
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No change was linear and will never be
Changing values among different
generations
Changing state power and structure
Strengthening civil society
Deeper integration into the world
community
Time Matters
Thanks!
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