China’s New Social Governance Ketty A. Loeb A dissertation Submitted in partial fulfilment of the Requirements for the degree of Doctor of Philosophy University of Washington 2014 Reading Committee: David Bachman, Chair Tony Gill Karen Litfin Mary Kay Gugerty Program Authorized to Offer Degree: Department of Political Science © Copyright 2014 Ketty A. Loeb University of Washington Abstract China’s New Social Governance Ketty A. Loeb Chair of Supervisory Committee: Professor David Bachman Jackson School of International Studies This dissertation explores the sources and mechanisms of social policy change in China during the reform era. In it, I first argue that, starting in the late 1990s, China’s leadership began shifting social policy away from the neoliberal approach that characterized the first two decades of the reform era towards a New Governance approach. Second, I ask the question why this policy transformation is taking place. I employ a political economy argument to answer this question, which locates the source of China’s New Governance transition in diversifying societal demand for public goods provision. China’s leadership is concerned about the destabilizing impacts of this social transformation, and has embraced the decentralized tools of New Governance in order to improve responsiveness and short up its own legitimacy. Third, I address how China’s leadership is undertaking this policy shift. I argue that China’s version of New Governance is being undertaken in such as way as to protect the Chinese Communist Party’s monopoly over power. This double-edged strategy is aimed at improving the capacity consists of Social Construction, on the one hand, and Social Management Innovation, on the other. Social Construction aims to increase and diversity the supply of public goods provision by building the capacity of local governments and non-state organizations to address their own social problems. Social Management Innovation consists of parallel policies and institutions the party-state is creating to ensure its monopoly over social power in the face of Social Construction. The dissertation includes case studies of Beijing, Shanghai, and Guangdong. Table of Contents Introduction and Case Studies 1. Introduction: Transformation of China’s Social Policy………………………………………1 2. General Overview of the Chinese State and Case Studies………………………………..... 27 PART I: Origins of China’s New Social Governance 3. The State and Social Welfare Supply 1978-1998…………………………………………. 47 4. Transformation of China’s Social Policy Marketplace: Changing Citizen Demand & State Response…………………………………………….... 70 5. Initial Attempts to Rebuild China’s Social Policy Systems 1998-2012……………………. 97 PART II: Emergence of the New Social Governance Framework 6. Innovating China’s Social Policy: Towards a New Governance Approach……………… 117 7. The State Regulatory Environment and Underdevelopment of China’s Third Sector……………………………………………………………………… 143 8. Social Construction………………………………………………………………………... 169 9. Social Management Innovation……………………………………………………………. 218 10. Conclusion: China’s New Social Governance in Comparative Perspective & Suggestions for Future Research………………………………………… 258 Appendix A: Party-State Institutions Involved in Social Policy…………………………………. 276 Appendix B: Defining the Third Sector and Social Organizations in China………………….. 288 Appendix C: Interview Log…………………………………………………………………………… 294 List of Tables & Figures Table 1.1 The New Governance Paradigm…………………………………………5 Figure 2.1 Illustrating the Hierarchical Structure of Urban Governance………….32 Figure 2.2 Beijing Sub-Municipal Case Studies……………………….………….37 Figure 3.1 Decline in central state revenue 1978-1994……………………………55 Figure 3.2 Rebounding State (Center & Local) Revenue 1991-2007……………..56 Figure 3.3 Percentage of Central State’s Revenue Share vs. Expenditure Share (vis-à-vis local governments)……………………………………………...57 Figure 3.4 Percentage of Government Expenditures Made by Central vs. Local Governments, 1994-2005…………………………………......58 Table 3.1 Shares of Total Expenditure by Different Administrative Units, by Expenditure Category (percent) (2003)……………………………….58 Table 6.1 Estimated Number of Civil Servants 1978-1999 (millions)…………...123 Table 8.1 Building the Capacity of China’s Third Sector……………………...... 170 Table 8.2 Establishment of China’s Third Sector Research Institutions………….195 Table 9.1 Social Management Innovation………………………………………...219 for Paul slayer of minotaurs Preface When I first started research for this dissertation, my intended project was much different than the one your will read in the following pages. In 2011 I traveled to China to research the role that Chinese Social Organizations were playing in environmental policy implementation. When I arrived, however, I found that the relationship between state and society was undergoing a significant transformation. The regulatory framework for Chinese Social Organizations was in flux, and, indeed, the boundaries between traditional state functions and those of Chinese civil society seemed to be blurring. In other words, the rules of the game were changing, and there seemed to be more players on the board. In my effort to understand what was happening, I stumbled across a new concept that Chinese policy makers and academics were heatedly discussing. In 2011, then President Hu Jintao had presented a major speech imploring the party, state, and people of China to pursue something called “Social Management Innovation.” As I began looking into this concept, I found it to be a murky one. With it, President Hu seemed to be simultaneously promoting the empowerment of Chinese society and also advocating that new control mechanisms be employed by the party-state. Meanwhile, I stumbled across the work of Karla Simon, Jessica Teets, and Jing Yijia, whose excellent studies of the growing practice of State- Social Organization goumai fuwu (purchase of service contracting) revealed an important part of the story, as well as Fu Tao and Shawn Shieh’s excellent journalistic work at the China Development Brief, which was chronicling a whole range of exciting civil society developments popping up around China. Finally, my work with Global Women-Partners in Philanthropy brought me into contact with an amazing network of Chinese social entrepreneurs and leaders who are hard at work building a support infrastructure to help build the capacity of China’s third sector. The activities being undertaken by these groups diverged from my understanding of how civil society works in China (that is, it suggested greater freedom and agency to organize than I had previously though existed). I thus set out to discover what was really happening in China. In the spring of 2012, I interviewed party and state officials, academics, thought leaders, and leaders of Social Organizations in Beijing, Shanghai, Shenzhen, and Guangzhou. While all agreed that major policy changes were afoot, and while most were able talk about how these changes were affecting their work, few had knowledge about the broader context of these changes. Indeed, more than one interviewee drew a parallel between themselves and the parable of the blind men touching the elephant. Many of my interviewees also asked for a copy of this dissertation and what it might tell them about the larger picture of social policy transformation in China. It is my sincere wish that these findings will help bring China’s New Social Governance into focus. *** I would like to express my gratitude to those who have supported me throughout this challenging project. Many thanks to my committee members David Bachman, Tony Gill, Karen Litfin, and Mary Kay Gugerty, as well as Susan Whiting for their guidance and support. My Committee Chair David Bachman spent a great deal of time and effort helping me to sift through the many iterations and drafts of what I called “the compost pile.” Thank goodness for your patience. I am also grateful to Professor Yuan Ruijun and the faculty and graduate students at Peking University’s Center for Civil Society Research, without whose sponsorship and introductions the case studies would not have been possible. This dissertation would also not have been possible if not for the Blakemore Foundation and US Department of Education’s FLAS program, whose language fellowships supported my study of Mandarin. Also, if not for the excellent language training I received at IUP Beijing, ICLP Taiwan, and the Chinese Languages & Literature department at the University of Washington, I could not have conducted this research. I am also extremely grateful to the UW’s Chester Fritz Fellowship, Keats & Gail Garman, Catherine & Mike Doherty, and Debby & Michael Garman for providing crucial funding that enabled me to conduct my fieldwork in China during the Spring of 2012. In addition, I would like to thank several individuals for their support during this challenging process. First of all, my profound gratitude goes to my parents Catherine, Keats, Gail, and Mike—and to my beloved M. Zissou. I could not have done this without you! My thanks also go out to Emily Krieger, Corin Mochnick, Ines Eben v. Racknitz and to the team at Global Women-Partners in Philanthropy (Colleen Willoughby, Susan Heikkala, Robin Groth, Sonja Ling, Yuting Li, and Emily Weaver) for their support. Many thanks to Kam Wing Chan (the best GSR ever), Stephan Harrell, Zhang Changdong, Bao Ning, Lin Ying, Kitty Poundstone & Bing Han, Molly Coddle, and my many fabulous colleagues in the Department of Political Science. I would also like to