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China Perspectives
48 | july- august 2003 Varia
Electronic version URL: http://journals.openedition.org/chinaperspectives/132 DOI: 10.4000/chinaperspectives.132 ISSN: 1996-4617
Publisher Centre d'étude français sur la Chine contemporaine
Printed version Date of publication: 1 August 2003 ISSN: 2070-3449
Electronic reference China Perspectives, 48 | july- august 2003 [Online], Online since 31 July 2006, connection on 24 September 2020. URL : http://journals.openedition.org/chinaperspectives/132 ; DOI : https://doi.org/ 10.4000/chinaperspectives.132
This text was automatically generated on 24 September 2020.
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TABLE OF CONTENTS
Politics
A border opening onto numerous geopolitical issues The Yanbian Korean Autonomous Prefecture Sébastien Colin
Society
The Hazards of the Right to an Education A study of the schooling of migrant worker children in Chengdu Chloé Froissart
The Crucial Role of Local Governments in Setting up a Social Safety Net. Ding Kaijie
Economy
A Fresh Look at the Development of a Market Economy in China Rigas Arvanitis, Pierre Miège and Zhao Wei
General Public Policy and Development Strategy The Chinese state in perspective Chen Sheying
Book Reviews
Catherine Keyser, Professionalizing Research in Post-Mao China – The System Reform Institute and Policy Making M. E. Sharpe, New York 2003 Jon Sigurdson
Joe Studwell, The China Dream. The Elusive Quest for the Greatest Untapped Market on Earth London, Profile Books, 2002, 359 p. Jean-François Huchet
C. Riskin, R. Zhao and S. Li, eds., China’s Retreat from Equality—Income Distribution and Economic Transition M. E. Sharpe, 2001, 222 p. Sylvie Démurger
Adam Segal, Digital Dragon. High-Technology Enterprises in China Ithaca and London, Cornell University Press, 2003, 188 p., and Kellee S. Tsai, Back-Alley Banking, Private Entrepreneurs in China, Ithaca and London, Cornell University Press, 2002, 316 p. Gilles Guiheux
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Lo Shiu-hing, Governing Hong Kong: Legitimacy, Communication and Political Decay New York, Nova Science, 2001, XII+ 349 pp. Richard Baum
Sheng Lijun, China and Taiwan, Cross-Straits Relations Under Chen Shui-bian London & New York, Zed Books, 2002, 164 p. Gunter Schubert
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Politics
China Perspectives, 48 | july- august 2003 4
A border opening onto numerous geopolitical issues The Yanbian Korean Autonomous Prefecture
Sébastien Colin
NOTE DE L’ÉDITEUR
Translated from the French original by Philip Liddell
1 On September 3rd 2002, the Yanbian Korean Autonomous Prefecture celebrated the fiftieth anniversary of its founding.
2 Yanbian is located in the province of Jilin; of China’s thirty autonomous prefectures, it is the only one in the northeast (1). It is the largest administrative entity in the province, covering an area of 42,700 square kilometres; it is subdivided into six municipalities, Yanji, Longjing, Helong, Tumen, Dunhua and Hunchun, and two counties, Antu and Wangqing (see map). As the layout of the hydrographical network indicates, Yanbian is oriented towards China’s frontier with North Korea and towards the sea. The landscape is dominated by an arc of wooded mountainside cut across with valleys that come together at the level of Yanji and Tumen and then merge into a vast plain around Hunchun. Most of its people and its cultivated land are naturally concentrated along these valleys and on the plain. Despite everything, the prefecture has two outstanding geographical features: its shared frontier with Russia and North Korea, and its ethnic composition, which, at about 840,000 people, has the highest concentration of Chinese Koreans (Chaoxianzu) 1. On the scale of the prefecture itself, however, this ethnic Korean population is still in the minority: in 2000, it represented only 38.55% of Yanbian’s 2,184,000 inhabitants, set against the 58.54% of Chinese Han. Lastly, the population is unevenly distributed: the administrative entities close to the frontier with North Korea have higher proportions of Koreans than those further away, where the Han are in the majority (see map and Table 2).
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3 This distribution is historical in origin. Unlike many other mino rities, the ethnic Koreans came to Chinese territory as immigrants and not through territorial expansion 3. Migrating to a region that was virtually free of human settlement in the second half of the nineteenth century, the Korean peasants were thus able to settle on the plains within reach of the border.
4 The festivities organised in commemoration of the anniversary gave the central, provincial and local authorities the opportunity to celebrate the characteristic features of Korean culture and to re-emphasise the importance of economic development to the prefecture 4. The aim, as every September, was also to encourage harmonious relations between the various “nationalities” living within the prefecture 5. Even though the festivities were longer and more spectacular, this celebration of the anniversary would hardly have differed from the annual rejoicing had it not been introduced by the sanguan jiaoyu campaign, organised by the provincial government, supported by the central government and aimed at the Korean minority. Its main objective was to remind people of the importance of unity between the “nationalities” in the successful pursuit of development 6. The sanguan jiaoyu campaign (teaching the three principles governing relations between the minorities and the Han) demonstrates that the central government is keeping a careful eye on the behaviour of the Yanbian Koreans. Indeed, since the prefecture opened its frontiers to North Korea in the mid-1980s and South Korea in the early 1990s, the two neighbours are tending to pose new problems for the Chinese authorities.
5 The decision to open up Yanbian was made for two reasons. The first was a matter of foreign policy: Yanbian and the Korean minority were to be incorporated within China’s new strategy towards the Korean peninsular, the objective of which is to encourage the reunification of the two Koreas. The second consideration was domestic: frontier security was to be assured by favouring the economic development of the prefecture. These two strategic concerns gave birth to an ambitious development policy in the first half of the 1990s. However, the consequences were not quite those anticipated. In fact, economic growth slowed during the second half of the 1990s, aggravating the economic and social unrest within the Korean population, among whom some individuals maintain relations with the two Koreas that have raised problems for the Chinese central government. Peking is embarrassed in particular by the many Chaoxianzu who have emigrated to South Korea and by the complicity of some in the smuggling of North Korean refugees into Peking and South Korea. These activities, which at the local level are possible causes of destabilisation, also raise diplomatic tensions between China and the two Koreas. Faced with these new problems, the central government has recently been attempting to reinvigorate the development of Yanbian. Opening up Yanbian at the end of the 1980s: what was at stake?From the founding of Yanbian to the opening up of the frontier: a historical reminder 6 In the beginning, Yanbian was a former clearance area that the Qing government created at the end of the nineteenth century to accommodate the many Korean peasants who were emigrating from the provinces in the northeast of Korea. Following this opening of the frontier, Japan’s take-over of Korea, first as a protectorate in 1905 and then by annexation in 1910, led to new waves of Korean immigration into Yanbian. Between 1881 and 1931, the Korean population of Yanbian swelled from 10,000 to
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396,850 people. On the eve of the Japanese defeat, it had reached 635,000 people, which represented 74% of the total population 7.
7 Yanbian was founded for reasons of foreign policy. The Qing rulers needed to respond both to the pressure of Han and Korean immigration and to the threats posed by Russia and Japan. In 1858 and 1860, two treaties were signed that drew the frontier between the Chinese and Russian empires: China lost an immense sweep of territory, including its access to the East Sea (Sea of Japan). The meeting point of the Russian, Korean and Chinese frontiers was then fixed on the northern bank of the Tumen river about 15 kilometres from the coast 8. At the same time, Han and Korean peasants, from the Chinese provinces of Shandong and Hebei respectively, and from the northern provinces of Korea, began to settle illegally in the Yanbian region 9. This illegal immigration into Chinese territory, on the fringes of Korea and Russia, greatly troubled the Qing court. Indeed, while it helped to populate the frontier regions, this immigration nevertheless had to be controlled, lest it be exploited by the Russians and the Japanese whose influence in Korea was growing 10. Lastly, by welcoming the immigrants, China could show that it offered protection to the Korean population and could thus increase its influence in the domestic affairs of the peninsular, which the Korean authorities were finding increasingly hard to control, and fend off its Russian and Japanese enemies.
Table1: Han and Korean populations in Yanbian’s municipalities and districts (2000)
Source: Yanbian tongji nianjian 2001, Yanji, Yanbian renmin chubanshe, 2001, pp.67-68 and 73.
8 However, when Japan established its domination of Korea, at the start of the twentieth century, it took the large Korean population in the clearance area as a pretext for justifying new territorial ambitions. For Japan, these people, just like those on the peninsular, had to be afforded its “protection”. The Korean population of Yanbian then became a real issue between the Chinese and Japanese authorities, with each government attempting to win its support 11. Even though a section of the Yanbian Koreans aligned itself with Japan—which moved into Yanbian as early as 1907 and then into the rest of Manchuria in 1931—most of them joined the communist camp and struggled against the invader.
9 The large proportion of Korean people on the edge of the Chinese territory and the role the Koreans played in resisting not just the Japanese but also the Kuomintang regime, were the main reasons that qualified Yanbian for autonomous status.
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The Yanbian Korean Autonomous Prefecture
10 The “Yanbian Korean Autonomous Region” (Yanbian Chaoxianzu zizhiqu) was founded on 3 September 1952. However, despite its title of zizhiqu, a term also used to designate autonomous regions at the provincial level, Yanbian remained subordinate to the province of Jilin. After the 1954 Constitution was published, which converted autonomous regions under the jurisdiction of provinces (zizhiqu) into prefectures (zhou), the State Council officially promulgated in April 1955 the creation of the “Yanbian Korean Autonomous Prefecture” (Yanbian Chaoxianzu zizhizhou) 12.
11 Between 1952 and 1957, regional autonomy was put into genuine practice in Yanbian. The Korean minority was strongly represented in the various authorities of the Chinese Communist Party (CCP) and local government, and the Autonomous Prefecture was considered by the central government to be a “model of autonomy”. It was the most advanced autonomous administrative entity in China: in fact, the standard of living enjoyed by the Koreans and their levels of education were even higher than those of the Han. The autonomy granted to Yanbian did not, unfortunately, last for long. The Great Leap Forward and the Cultural Revolution witnessed the imposition of an assimilation policy. The prefecture’s shared frontiers with the Soviet Union and North Korea added greater intensity to these campaigns of repression. The Sino-Soviet schism of 1959 and the ups and downs that affected China’s relations with North Korea between 1958 and 1970 made Yanbian a very sensitive region. During the Cultural Revolution, Yanbian even became totally militarised, dominated by the People’s Liberation Army, with Mao Yuanxin, Mao Zedong’s own nephew 13 at its head.
12 It was not until Deng Xiaoping had come to power, and not until the 1982 Constitution and the May 1984 “Law on the Autonomy of Regional Nationalities” had both been promulgated, that policy towards the national minorities was to become more lenient and that the term “regional autonomy” came to mean something again.
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13 In Yanbian, this revival took concrete form in 1985 with the promulgation of regulations laying down the law on the autonomy of the prefecture (Yanbian Chaoxianzu zizhizhou zizhi tiaoli) and the representation of Koreans in local political and administrative bodies. A year later, the prefecture authorities published three other regulations on the use of the Korean language, the development of traditional Chaoxianzu culture and the production of traditional Korean products; the regulations also set up a body responsible for promoting economic and cultural exchanges with foreign countries (haiwai lianyi hui). In all, more than 70 regulations were implemented between 1985 and 1988, concerning, among other things, agriculture, forestry, science, education, health, family planning, taxation and commerce 14.
14 These reforms followed the visit to Yanbian in 1983 by Deng Xiaoping, during which he declared himself in favour of “a swift and improved building up of the Yanbian Korean Autonomous Prefecture” (ba Yanbian Chaoxianzu zizhizhou jianshe de geng kuai xie geng hao xie), thus marking the first stage towards opening up the prefecture’s frontier with the outside world 15. The strategic motivation behind the opening up of the frontier 15 The Great Leap Forward and the Cultural Revolution had left the Party’s credibility greatly diminished and had poisoned relationships between the Koreans and the Han. Deng’s visit and the renewal of economic development were a means for the Party to win back the confidence of the Yanbian Koreans. This new attitude had a further aim: Peking’s new policy towards the Korean peninsular might profit from the co-operation of China’s Chaoxianzu 16.
16 Firstly, the central government needed to revive its relations with North Korea’s leaders. Indeed, the normalisation of China’s diplomatic relations with Japan and then the United States during the 1970s as well as the opening up of the market economy in 1978 were sharply criticised by North Korea, which then tightened its links with the USSR. Secondly, the government wished to restore its position at the centre of Northeast Asia, not only by rebuilding its relationship with the Soviet Union (and later Russia) but also by acting as go-between in bringing the two Koreas together. To that end, the Chinese government had to opt for normalising its relations with the south while taking care not to put a strain on its links with the north. The closeness of these links was proving all the more important in that the appearance of serious economic difficulties might threaten the survival of the North Korean regime, which might in turn leave the Chinese government fearful for the stability of its frontier.
17 In order to confront these numerous issues, from the end of the 1980s, the central government allied itself with provincial and local initiatives to implement a new economic policy, symbolised by the Tumen River Area Development Programme. This programme was designed, among other objectives, to promote the economic development of Yanbian, to offer the prefecture access to South Korea and to help launch North Korea along the path of reform 17. The policy satisfied a national need by enabling China to narrow the currently growing gap between Yanbian’s slow economic development and the rapid advances being made in the coastal provinces, a gap that might feed local discontent in Yanbian and also threaten the stability of the frontier 18.
18 Thus, when Jiang Zemin, then Secretary General of the Party, visited Yanbian between 7 and 9 January 1991, he proclaimed the central government’s wish to make Yanbian a “model prefecture” for the whole country. He encouraged the local authorities to parade the various advantages that the prefecture enjoyed, such as its “ideal
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geographical position” on the frontiers of Russia and North Korea and in the centre of Northeast Asia, its rich natural resources (such as wood and medicinal plants) and its picturesque landscape (mainly with tourism in mind) 19. He repeatedly encouraged the local authorities to continue exploiting the ethnic network of the Korean population so as to form closer economic and trading links with the two Koreas 20. The openness strategy of the 1990s and its problemsThe launch of the Tumen project 19 The start of the reforms took the form of reopening the frontier with North Korea, which had been closed since the start of the Cultural Revolution. First of all, the Chinese and North Korean authorities established relations between localities (21), and then they reactivated treaties signed during the 1950s and the early 1960s, among them an agreement on cross-border movement 22. Trade was also built up, reaching a value of 52 million dollars by 1989 23. This reopening was encouraged by an important political act, the visit to Yanbian in 1984 of Hu Yaobang, then Secretary General of the CCP, and Kim Il-Sung, whose regime promulgated in September of that year a law allowing foreign investment.
20 However, some local and provincial leaders judged this reopening to be economically inadequate. In their view, these two administrative entities of Northeast China were lagging behind the coastal provinces in development because the region was isolated, having been cut off from access to the East Sea (Sea of Japan) since the latter half of the nineteenth century. This is when the idea of establishing an economic zone around the meeting point of the Chinese, Russian and North Korean frontiers, with the financial support of Japan, South Korea and the United Nations Development Programme (UNDP), was first mooted. This local project, which was called, symbolically, the Tumen River Economic Development Zone, was aimed at renovating existing infrastructure and building new projects to improve transport (roads, railways, port installations and frontier posts) so as to regain access to the sea by using the Russian ports of Zarubino and Posjet and the North Korean ports of Rajin and Chongjin.
Table 2: Main foreign investments in Yanbian since the opening of the border in June 2002.
Source: Yanbian chaoxianzu zizhizhou duiwai jingji maoyi ding (The foreign economy and foreign trade office of the yanbian Korean Autonomous Prefecture), summer 2002.
21 During the first half of the 1990s, the central government took an active part in the financing of the infrastructure. With its international objectives in mind, it gave strong encouragement to the local authorities to attract investment from abroad by creating,
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in Hunchun in March 1992, a frontier zone of economic co-operation (bianjing jingji hezuoqu), a project driven directly from Peking; and it gave the go-ahead to the Jilin authorities for several economic development zones at the provincial level across the rest of the prefecture 24. In addition, the central government played a key role in encouraging the North Korean authorities to set up the economic zone of Rajin- Sonbong in 1991 and in persuading them not to leave the Tumen programme when they threatened to do so at the time of the first nuclear crisis in 1994. It was also a Chinese company in Yanbian, the Xiantong Haiyun Jituan Youxian Gongsi that, as the only company using the port of Rajin, was largely responsible for its renovation, relieving the failing North Korea of this task 25.
22 While the Tumen programme did, of course, help to open up Yanbian, the economic results of the decade as a whole remained disappointing. Even today, numerous problems remain. Persistent economic difficulties 23 The economy of Yanbian experienced a sharp slowdown during the second half of the 1990s. Its falling ranking among China’s 30 autonomous prefectures perfectly illustrates this decline. From being the most developed of the autonomous prefectures in 1990, by 1995 Yanbian had slipped to second place and by 2000 to fifth place. In 1995, the value of its industrial production was 94 billion yuan, which was 38 billion less than the most developed of its rivals, the autonomous prefecture of the Kazakhs of Yili in the autonomous region of Xinjiang. In 1999, not only had the gap between Yanbian and Yili widened—from 38 billion to 62 billion yuan—but by that year Yanbian had also been overtaken by three other autonomous prefectures, those of the Yi of Liangshan in Sichuan province, the Hani and Yi of Honghe in Yunnan province, and lastly the Bai of Dali, also in Yunnan 26.
24 The prefecture of the Yanbian Koreans remains poor in terms of foreign investment. Between the end of the 1980s and June 2002, it attracted only 615 enterprises, worth a total of 615 million dollars (see Table 2) 27. Despite the new fiscal policies implemented during the first half of the 1990s, taxes are still considered too onerous and too numerous. Yanbian’s workforce suffers from a cruel lack of skills in key sectors such as the environment, foreign languages and new technologies 28. While the presence of the Korean minority has helped to attract a large number of Korean businesses, these are only small and medium-sized enterprises profiting from cheap labour. The big South Korean groups invest elsewhere, mainly in the provinces of Liaoning and Shandong. The ethnic network is in fact much more beneficial to the individual and to the family economy: members of the Korean minority use it primarily to go and work in South Korea and to trade with Koreans on the peninsular or with foreigners of Korean origin 29. Lastly, the industrial structure of the prefecture is still overly dominated by state enterprises whose technology dates back to the 1950s, the 1960s and the 1970s; it does not boast enough enterprises capable of offering products with a high added value. The proportion of such products within overall industrial production is the smallest to be found anywhere in Jilin province 30.
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Table 3: Volume of foreign trade of the Yanbian prefecture (US$’000)
Source: Yanbian chaoxianzu zizhizhou duiwai jingji maoyi ding (The foreign economy and foreign trade office of the yanbian Korean Autonomous Prefecture), summer 2002.
25 Yanbian’s low level of economic dynamism is also evident in its external trade. Admittedly, the level did rise between 1991 and 2000, but its progress was very uneven (see Table 3). Russia and North Korea, Yanbian’s main trading partners at the start of the 1990s, were overtaken by South Korea and Japan as a result of the collapse of China’s trade with Russia and North Korea in the mid 1990s. Each of these partners represented trade worth 50 million dollars by 2000, and although these figures have certainly increased since, the value is still inadequate 31. A large share of the cross- border trade is accounted for by private companies (minying qiye) which take advantage of the existing markets at each of the prefecture’s frontier posts to sell, buy or exchange 32. However, most of the trade flowing between China and Russia and between China and North Korea bypasses Yanbian. National trading between China and Russia flows more to the north, through the province of Heilongjiang, and trade between China and North Korea uses the frontier crossings further to the south in the province of Liaoning 33. So the isolation of the prefecture is still a reality. Moreover, the main trade routes between Yanbian and South Korea and between Yanbian and Japan—which remain modest despite, admittedly, experiencing steady growth—go through the port of Dalian, neglecting the ports in the Tumen zone even though they are much closer. Why the impetus has been lost 26 The economic difficulties of Yanbian find their explanation in the numerous obstacles that the Tumen programme has encountered—and continues to encounter 34.
27 Because of the inadequate transport and port infrastructure, access to the sea—which was, after all, the initial aim of the project—is still not completely operational. The investment needed is lacking; the failure to complete the infrastructure is a handicap
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to trade and puts off foreign investors. State investment by the Chinese central authorities also dwindled in the second half of the 1990s 35. There are two main reasons for this reduction. As a programme for cross-border co-operation, the Tumen programme cannot succeed without the active participation of the Russian and North Korean partners. Yet the considerable political reluctance of the local Russian authorities in Primorskiy and of the North Korean government has contributed strongly to slowing down the project. Moreover, the nuclear crisis of 1994 and the death of Kim Il-Sung strained relations between Pyongyang and Peking. At the same time, the launch of the Ninth Five-Year Plan (1996-2000) turned Peking’s attention towards the development of China’s central and western provinces, which largely explains the stronger economic growth achieved in the autonomous prefectures of these regions.
28 Within the prefecture, the Tumen programme has also been paralysed by the numerous tensions that it has itself created between Yanbian’s main centres. Indeed, the lion’s share of the profit has gone to the frontier municipality of Hunchun, which received the majority of the investments from Peking, while the railway connecting Yanji to North Korea via Longjing was renovated only with the help of local funding. This unequal treatment, deliberate on the part of the central government, has had the effect of sowing discontent among the areas that believe they have lost out in the unfolding of the programme (including Yanji, Longjing and Helong) 36.
29 While the implementation of the Tumen programme has enabled the central government to use Yanbian and its Korean minority to further its strategy aimed at the two Koreas, active Korean participation also appears essential for the successful economic development of this prefecture. Yet North Korean reluctance and the overly timid economic participation of South Korean investors have combined to damage it fatally. The absence of economic prospects for Yanbian in the context of the opening up of the frontier has a number of consequences for the Korean minority, which is, in turn, causing problems, diplomatic ones in particular, for the Chinese authorities. The consequences for the Korean minority of opening up the frontier 30 Opening up Yanbian to Korean influence from the mid-1980s onwards seemed a gamble on frontier stability. While it was necessary, from the point of view of the central government, to confront problems both within and without China, it also demonstrated the trust placed in the Korean minority. Because the Chaoxianzu were strongly politicised and relatively faithful to the CCP, the central government then qualified them as “a model minority”, and they considered themselves as Chinese people of Korean origin. This double identity, which is common among immigrant populations, was reinforced by the important political role that the Korean minority had played in the history of the People’s Republic as well as by the different policies that the central government directed towards it 37. So, just as it had done in the past, the central government again played on the double identity of the Chaoxianzu in the early 1980s in the hope that they would play a positive role in reconciling the two Koreas. Here again, however, the outcome fell far short of the intention. An economic and social malaise driving people to emigrate 31 The economic slowdown in the second half of the 1980s particularly affected the Korean minority. In Yanbian, Koreans were mainly employed in producing rice, fruit (primarily apples) and tobacco, and they suffered the full force of the competition whipped up by the reform policy 38. Unlike the Han, they would not, or could not, adapt
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39. The impact was immediate. The Koreans saw their incomes drop and the gap widen between them and the Han. While the situation in the towns is relieved by the employment of some Koreans in foreign trade and by the availability of work in South Korea, many Koreans are still wretchedly poor 40. These social problems have driven ever more Koreans to emigrate from Yanbian, a process that began from the moment the frontier was opened.
32 The Yanbian Koreans have migrated in the following three ways, though not necessarily in this order 41. First there was the rural exodus. Hard hit by the reforms, many Korean peasants fled the countryside to the prefecture’s main urban centres. In 2000, the three municipalities of Yanji, Hunchun and Dunhua, the location of the urban centres of the same name that have profited most by development, were the only administrative entities to record a positive migratory balance, unlike the municipalities of Longjing, Helong and Tumen, to which rural Koreans have flocked in great numbers (see Table 4). When they do not go to the main urban centres within the prefecture, the Koreans flee Yanbian for the great developed cities of China where economic prospects are best. As well as Peking and the four great cities of the northeast (Harbin, Changchun, Shenyang and Dalian), migrants favour the Shandong municipalities (such as Jinan, Qingdao and Yantai) and those of the other coastal provinces. Lastly, the opening of the Yanbian frontier has offered new prospects for immigration. At first, the Yanbian Koreans made their way to North Korea and the Soviet Union, but the economic difficulties of these countries brought such population movements rapidly to an end. Salvation came in the renewal of trading relations between China and South Korea at the end of the 1980s and then in the normalisation of diplomatic links in 1992. South Korea has since become a real El Dorado, and it is to here that many Koreans from Yanbian and elsewhere in China attempt legally or illegally to migrate, mainly to work. According to some estimates, Chinese Koreans there numbered 23,000 in 1992 and over 40,000 by 1994 42. By spring 2000, 92,000 were officially registered by the South Korean authorities but, according to some estimates that included illegal immigrants, their number had risen to 150,000 or 200,000, which is more than half the immigrant workforce settled in South Korea 43. While it is difficult to estimate the exact proportion of those who came from Yanbian, there is no doubt that it is significant. Indeed, since the frontiers opened, about 200,000 Yanbian Koreans have gone abroad 44.
33 At the same time, and partly linked to this emigration, a slowdown has been recorded since the early 1990s in the growth of the Yanbian Korean population. Caused by a significant fall in the birth rate, population growth even became negative in the second half of the 1990s (see Table 5). The fall in the birth rate is largely explained by the male- female imbalance in the countryside over several previous years; as a result of the high level of female emigration, this imbalance became particularly apparent during the 1990s. Today, the figures indicate that there are four men for every woman in the Yanbian countryside 45.
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Table 4: Demographic dynamics of the population of Yanbian, by district and municipality (2000)
Source: Yanbian tongji nianjian 2001, Yanji, Yanbian renmin chubanshe, 2001, p.70.
Table 5 : Characteristics of the Korean population of Yanbian between 1990 and 1999
Source : Ryang Ok-Gûm, ‘Jungguk yônbyôn josônjok jach’iju minjok gwangye ûi hyôngsông gwa baljôn’(Formation et d éveloppement des relations entre nationalités dans la préfecture autonome des Coréens de Yanbian), in Kim Kang-II éd., Jungguk josônjok sahwoeûi munhwausewa baljôn jônryak (Stratégie de développement et valeurs culturelles de la société chaoxianzu de Chine), yanji, Yônbyôn inmin ch’ulbansa, 2001, p.158.
The influence of the Chaoxianzu in Korean affairs
34 Economically limited, the main influence of the Chaoxianzu in Korean affairs is social and humanitarian. Particularly striking is the help they give to North Korean refugees.
35 The number of North Korean refugees now living in Yanbian is difficult to estimate. This is a sensitive subject; and, because the movements of refugees are fluid, any census is almost impossible. The few available figures concern the number of refugees in China and are unhelpful, varying between 10,000 and 300,000 according to different estimates 46. Despite these variations, the Yanbian prefecture still seems to shelter the great majority of the refugees present on Chinese soil. The flow of refugees into Yanbian, which was very significant between 1998 and 2001, largely dried up during 2002. Alongside the various campaigns of repression, the renewal of frontier trade also appears responsible for this fall 47. Trade between the frontier towns of Yanbian and their North Korean neighbours, mainly stimulated by the Chaoxianzu, thus saves a few North Koreans from having to flee into China to survive.
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36 When they do arrive in Yanbian, the North Koreans are often helped by the Chaoxianzu. While it is much too dangerous for the latter to welcome the refugees into their homes —and this is true even if they are members of their family—they attempt to help them by providing food or finding jobs for them in farming or forestry. Lastly, the bolder spirits help the refugees to flee to South Korea via a third country (such as Mongolia or Thailand) or via one of the many foreign embassies based in Peking.
37 This solidarity is not systematic, however. Some refugees are, on the contrary, subject to the arbitrary control of the local people or to organised crime networks. Of these, women are in the front line. According to some studies, 70-75% of the North Korean refugees in China are women and, of these, about 60% settle in Yanbian. This female surplus is exacerbated by the male-female imbalance in country areas of the prefecture. A large number of marriages are arranged between single rural Chaoxianzu men and women refugees from North Korea 48.
38 Lastly, because the Chaoxianzu are able to move freely into each of the two Koreas, they frequently act as go-betweens in arranging meetings or carry letters between North and South Koreans 49. The “de-Koreanisation” of Yanbian and the question of Korean identity 39 Emigration and the slowdown in population growth have the combined effect of reducing the proportion of Yanbian Koreans within the wider community of Chinese Koreans. Whereas, in 1949, the Yanbian prefecture sheltered more than 60% of China’s Koreans, today that proportion has fallen to 40% (see Table 6). In the longer term, this phenomenon raises the question of Korean representation within the governing bodies of the autonomous prefecture 50. Indeed, according to the 1982 law, the proportion of officials drawn from a minority community in local political and administrative bodies must reflect its share of the overall population of the autonomous area. Thus, between 1952 and 2001, in parallel with the relative fall in the numbers of Koreans in Yanbian’s total population, the proportion of Korean officials has dropped from 78% to 43.1% 51. Admittedly, the Chinese authorities have guaranteed that national minorities should fill the senior posts in the autonomous areas and that their share of officials should always remain above their share of the total population (52); but how will things turn out? At the local level, this imbalance is perceived as a serious problem, and to address it the prefecture authorities have been attempting for some time to encourage a higher birth rate 53.
40 The depopulation of Yanbian also threatens the Korean identity of the Chaoxianzu. Their departure from Yanbian to settle in other towns means that many schools are forced to close down, but similar schools are not necessarily available at their new homes. Thus they are increasingly being assimilated within Chinese Han society 54. Still worse, according to many Korean intellectuals, the Korean minority is at present on the verge of disintegration 55.
41 Such disintegration is all the more critical because opening up Yanbian to Korean influences has not strengthened the Korean identity of the Chaoxianzu. On the contrary, the Chaoxianzu have become so disillusioned in rediscovering the two Koreas that their Chinese patriotism has only intensified.
42 Chinese Koreans, for so long attached to North Korea, which they consider their country of origin, have been badly disappointed by political and economic developments in their motherland. The personality cult of the supreme leader, the
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emergence of a Kim dynasty, the Juche ideology, the total absence of individual freedom and the plight of refugees are elements of which they are sharply critical 56. Only family ties still connect them with North Korea, which they hope will soon be opened up economically.
43 Most of the Chinese Koreans who have been to South Korea have also been badly disappointed. Their excitement at visiting this country and their chance to savour its high level of economic development have been soured by the discovery of a culture and a social existence that was quite different from theirs and to which they were unable to adapt 57. What is worse, confronted daily by discriminatory laws, they have not found themselves treated as real Koreans. By limiting their freedom to settle down and by making their lives difficult, these laws create a persistently negative image of South Korea among the Chaoxianzu, many of whom return to China determined never to repeat the experience 58.
44 The numerous contacts that they have had with the two Koreas have therefore consolidated the double identity of the Chinese Koreans. They have today a much more pragmatic vision of the peninsular, considering it merely as an important economic and political partner. As citizens, first and foremost, of the People’s Republic, the Yanbian Koreans do not represent a real threat to the stability of the Sino-Korean frontier 59. During the 1980s and 1990s, the Yanbian Korean Autonomous Prefecture was described several times by Peking and by the Jilin provincial authorities as the “model collectivity” (mofan jiti), meaning that the union between the nationalities there was judged to be satisfactory 60. Nevertheless, other sources have qualified this idealised view. They consider that the Korean minority is an intermediate nationality, “neither cold nor hot” (bu leng bu re); it is not inclined to separatism, as is the case with national minorities in Tibet and Xinjiang, but neither is it “without risk to the social and political stability of the region”, particularly because of the relations it maintains with some citizens of the two Koreas 61.
45 This ambivalent situation, which varies from person to person, obliges the central government to be wary of the Chaoxianzu, especially when they cause problems for its diplomatic relations with the two Koreas. The problems caused by the Yanbian Chaoxianzu to China’s relations with Korea
46 The migration of Chinese Koreans to South Korea and the support they offer to North Korean refugees are frequently the cause of diplomatic clashes between China and the two Korean states. These problems are all the more embarrassing in that a significant criminal factor is involved.
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Table 6: Proportion of Koreans from Yanbian in the whole Korean population of China
Source : Ryang Ok-Gûm, ‘Jungguk yônbyôn josônjok jach’iju minjok gwangye ûi hyôngsông gwa baljôn’(Formation et d éveloppement des relations entre nationalités dans la préfecture autonome des Coréens de Yanbian), in Kim Kang-II éd., Jungguk josônjok…, op.cit., p. 158.
The political issues raised by Chaoxianzu immigration in South Korea
47 The central government in China, fearful that South Korea might win too much influence over China’s Korean community, keeps a close eye on South Korean immigration policy. Moreover, Seoul did not fail to make use of its influence when it published its law concerning the legal status of Koreans from abroad. Coming into force on 12 August 1999, this law authorised foreigners of Korean origin to reside in South Korea without a visa for one or two years, which made it easy for them to look for work. However, in common with Koreans in Russia, those in China were not affected by this law. Indeed, the South Korean authorities accept as Koreans from abroad only those persons (or descendants of persons) who left South Korea after 1948, thus excluding those who were forced to leave the peninsular at the end of the nineteenth century or during the Japanese occupation 62. While it helped to avoid any friction with the Chinese government, this exclusion provoked uproar among the immigrant Chaoxianzu population and also among South Korean Non-Governmental Organisations (NGOs), who organised numerous demonstrations in Seoul and sent a petition to the country’s Constitutional Court. This pressure from part of society obliged the central government to think again. On 31 August 1999, President Kim Dae-Jung called on the government to reflect on measures that would enable Koreans from China and Russia to enjoy the same rights as Koreans from other countries 63. On 10 July 2001, following a report by several NGOs condemning the discrimination and ill-treatment inflicted on some Chinese Koreans in South Korea, the justice minister promised to “humanise” his policy towards them and also to crack down on groups or individuals who exploit them (64). In the end, on 29 November 2001, South Korea’s Constitutional Court ruled the 1999 law to be in breach of the constitution and ordered that it be revised by the end of 2003 65.
48 Despite this apparent change of heart, the policy of the South Korean authorities towards Korean immigrants from China has alternated between firmness and kindness since the start of 2002. Numerous anecdotes concerning the illegal entry of Koreans
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from China before, during and after the staging of the football World Cup in May 2002 have convinced the government to strengthen its controls on immigration and to prepare strict measures to tackle the problem of illegal workers 66. At the same time, it has authorised Koreans from China to work in the service sector, enabling them to apply for visas valid for at least two years 67. This fluctuation in South Korean policy is the consequence of numerous pressures on the central South Korean government on two fronts. On the one hand, it has to avoid any friction with the Chinese government. On the other, it must respond to the expectations of Chaoxianzu immigrants and of the South Korean NGOs, expectations that were demonstrated afresh in January 2003 when the NGOs opposed the government’s decision to send some immigrants back to China 68.
49 For its part, the Chinese government criticises any decision to treat the Chaoxianzu like any other expatriate Koreans. In its eyes, the Chaoxianzu are—and always will be— Chinese citizens of Korean origin. It would prefer Seoul’s law discriminating against Chinese Koreans to be kept in force because it helps to encourage their loyalty to the People’s Republic. Thus, because it gave citizen’s rights to some Korean expatriates on the basis of their ethnicity, the Chinese government castigated the 1999 law. Now, however, judging that if Seoul eventually widens the law to include Chinese Koreans this will be in defiance of Chinese sovereignty, Peking is sharply opposed to its revision. This opposition is all the stronger in that the discourse surrounding notions of citizenship, ethnicity and sovereignty is taken up by some extreme right-wing fringe groups in South Korea who claim Yanbian as Korean territory. To show its displeasure, Peking twice refused, early in 2002, to issue Chinese visas to South Korean jurists responsible for visiting Chinese Koreans for talks about the revision of the 1999 law 69.
50 This was not the first time that the Chinese government had refused entry to South Koreans. It had already prevented delegates from South Korean NGOs from going to Yanbian to provide aid for the refugees from North Korea. Aid for North Korean refugees: a Chaoxianzu-Korean connection that annoys Peking 51 The Chaoxianzu are not the only people helping the North Korean refugees. A few South Korean NGOs and NGOs set-up by Koreans from abroad (mainly American Koreans), settled in Yanbian, also regularly come to the aid of the refugees. Alongside the Chaoxianzu, these NGOs have even played an important role in transporting North Korean refugees to foreign embassies in Peking 70. While the central government tolerated, until recent months, the presence of these NGOs—as long as they remained discreet—it considers their participation in organising expeditions to the embassies to be in violation of Chinese sovereignty. As these NGOs have also deeply embarrassed the Chinese government in its relations with North and South Korea, it has responded immediately by cracking down not only on the refugees but also on their accomplices 71. Furthermore, while the repression of the Chaoxianzu is an internal matter for the Chinese, the crackdown on the South Korean NGOs is closely watched by the Seoul authorities—the more so in that some of the NGOs (many being religious in character) are also playing a leading part in defending the Chaoxianzu in South Korea. Some active members of the Christian NGOs were thus arrested by the Chinese police who accused them of proselytising, which is forbidden in China 72. However, being anxious not to get into a row with Seoul, the Chinese authorities imposed limited penalties, in most cases freeing them after they had paid heavy fines. These diplomatic limitations explain why Peking is also attempting to obstruct the work of these NGOs at an earlier stage by preventing them from coming to China. A black list naming some of their leaders has
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been sent to the Chinese embassy in South Korea, which is ordered not to issue any more visas to them 73. The emergence of an illegal traffic in refugees 52 As many Chinese (including Chaoxianzu) as Koreans from the peninsular are involved in the criminal network, which is a growing presence in the region. The transporting of Chaoxianzu to South Korea is accompanied, for example, by a significant traffic in South Korean passports, forged marriage certificates and work permits. It is more and more common for South Koreans in Yanbian and the Chinese Northeast to find that their passports have been stolen or unfortunately misplaced. As for forged marriage certificates, these can also have two uses: some of them can be used to create a marriage between a Chaoxianzu man and a woman refugee from North Korea. Most of the time, these arranged marriages are in fact forced marriages. The criminal gangs quickly understood how to benefit from the situation and they have put in place a significant network for smuggling women whom they sell to the peasants in Yanbian or elsewhere. Those who are not sold are switched into the region’s many prostitution networks. Lastly, in addition to being a centre for the traffic in women, Yanbian is also an important transit area for drugs coming in from North Korea, most of which are eventually sold in South Korea 74.
53 While the Chinese and South Korean governments have agreed to co-operate in dismantling the various trafficking networks, some differences persist over the best methods to adopt.
54 In October 2001, the Chinese authorities executed a smuggler of South Korean origin without informing the South Korean diplomatic mission in China. The government of South Korea protested sharply over this act, which thus created a new diplomatic incident. The problem was finally resolved during a meeting of the two countries’ foreign ministers on 4 November 2001 75. A much-needed new start for development: xibu dakaifa to the rescue of Tumen?
55 The numerous connections maintained by the Chaoxianzu with the South Korean NGOs and the North Korean refugees led to the organisation of the sanguan jiaoyu campaign during the spring and summer of 2002 76. Indeed, even though Chinese studies show that the majority of the Yanbian Koreans still consider themselves Chinese, the researchers emphasise the need to strengthen their patriotism and their sense of cohesion with other nationalities (that is with the Han) by improving education 77. However, the Chinese government is aware that mere educational reforms will not be enough to resolve the problems. It has recently been attempting to relaunch economic development in the prefecture. Thus, after setting up a processing and export zone (chukou jiagong qu) in Hunchun, in April 2000 (78), on 8 March 2001 the State Council authorised the Yanbian prefecture to receive the benefits of the policy of the “Great Opening Up of the West” (xibu dakaifa) 79. This decision was prompted, above all, by growing pressure from the Yanbian authorities (passed on doubtless by those of Jilin province) who, confronted with the failure of the Tumen programme, wished to relaunch Yanbian’s development 80. Although the prefecture is situated on the edge of the Northeast, the authorities maintained that Yanbian was an old, poor administrative frontier entity inhabited by national minorities and could, given these characteristics, benefit just as much from this policy as the other autonomous prefectures located in the western provinces 81. So since March 2001 Yanbian has been receiving new state subsidies and a more advantageous fiscal regime which ought to enable it to attract
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more foreign investment across a greater number of sectors and to profit a little more from its own fiscal resources. It is also authorised to adopt a few measures to protect the environment and to develop scientific and technical education as well as zones of economic and technological co-operation. Lastly, Yanbian has been offered new prerogatives in promoting tourism and frontier trade.
56 During the year 2001, Yanbian received 550 million yuan (66.3 million US dollars) in central government. Between 2003 and 2008, the authorities, both central and regional, are committed to making available 4 billion yuan (481 million dollars) for developing infrastructure and certain key industrial projects which were not completed at the time of the first phase of the Tumen programme 82. As regards foreign investment, the Yanbian authorities have also taken advantage of the fiftieth anniversary to organise an investment forum in Yanji. It opened from 2 to 4 September 2002 and welcomed 2,270 potential investors from 12 countries. In all, 254 investment projects worth a total of 1,165 billion dollars, as well as a large number of commercial contracts worth 743 million dollars, were signed 83.
57 The renewed commitment of the central government to developing Yanbian is, as was the case in the early 1980s, closely linked to the state of its relations with and strategy towards the two Koreas. Only a few weeks before the two Korean heads of state met for the Pyongyang summit in June 2000, Kim Jong-Il had paid a secret visit to Peking where he was closeted with the senior CCP leaders 84. On a second visit to China, during January 2001, he also went to Shanghai 85. Lastly, in September 2001, Jiang Zemin visited Pyongyang for the first time in ten years, which, after all the tensions of the second half of the 1990s, thus symbolised the restoration of good relations between the two countries 86. In addition to strategic questions (including TMD, NMD and the presence of American troops in South Korea), these meetings also provided an opportunity for the two governments to discuss economic development. Kim Jong-Il having praised to the skies the successes of the Chinese reforms, it is not surprising that, following these meetings, the North Korean regime adopted numerous openness measures between 2000 and autumn 2002.
58 Justifiably impressed by the many political and economic advances that were made in the two Koreas during this period, South Korea’s political and economic leaders are again showing great interest in the Tumen programme, in particular in its potential role in opening up North Korea and its importance in connecting up the transport networks between China and the two Koreas and between the two Koreas themselves. The Federation of South Korean Industries, encouraged by Seoul and having strengthened its links with its Chinese counterpart in February 2001, declared on 22 March 2001 its intention of taking an active part in the development of the Tumen region. 87.
59 China’s closer links with North Korea have since been overshadowed by a second nuclear crisis, which attests once again to the volatile, unpredictable and above all dangerous behaviour of the North Korean regime as well as to the complexity of the Peking-Pyongyang relationship. Annoyed by this behaviour, the Chinese government has taken political and strategic measures that have directly affected Yanbian. For example, Peking has told all North Korean officials—those who had been allowed to stay in the prefecture to hunt down refugees—to return home 88.
60 While it is too soon to analyse what the relaunch of the Tumen development will lead to, it is clear that its success will depend not just on resolving this second nuclear crisis
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but also and more particularly on overcoming Yanbian’s present economic problems (skills shortage, problematic restructuring of state enterprises, inadequate foreign investment and low levels of cross-border trade) 89. The task ahead appears all the more arduous in that China’s recent accession to the World Trade Organisation is likely to cause new difficulties for the prefecture, particularly in agriculture—which still accounts for 16% of Yanbian’s GDP—and the many state enterprises 90. Lastly, the Tumen development cannot go ahead without a significant inflow of foreign investment, especially from South Korea.
61 We shall also have to watch closely what impact the relaunch of the development will have on the changing identity of the Chaoxianzu. That most Yanbian Koreans still feel themselves to be Chinese can largely be attributed to the disillusionment that many have felt in South Korea. The geopolitical importance of the Korean minority depends above all on China’s relations with the peninsular. From this perspective, because of the reactions it will provoke within the Chinese government and among the Chaoxianzu, the revision of the South Korean law affecting Koreans from abroad will without any doubt mark a critical stage in the relationship between the two countries. It will also represent a basic gauge of the prospects for Korean reunification. Even though it is hard to foresee what form the new Korean discourse on the frontier and on China’s Korean minority will take, it is likely that the influence exerted by a reunified Korea on Yanbian and its Koreans will again be enormous. While one cannot put aside the possibility of destabilising influences (91), reunification—and, of course, before that, the opening up of North Korea—could have a very positive effect on economic development, both for Yanbian and for all of China’s Koreans. In view of its frontier position, the Yanbian prefecture could then become Korea’s back door into China and thus profit by its geographical situation in the heart of Northeast Asia. However, this success will also depend on what strategic perceptions Chinese leaders will then have of the peninsular, for these still govern their policy towards Yanbian and the Korean minority.
62 In my work on Chinese frontier policy in Northeast Asia, I studied at the Teaching University of Northeast Changchun (Jilin) from September 2000 to July 2001 and travelled several times to the Yanbian Korean Autonomous Prefecture (thanks to a grant from France’s Ministry of Foreign Affairs). I should like to thank the CEFC for financing my most recent visits to Yanbian and South Korea during the summer of 2002. I also thank all those who gave me their comments on earlier versions of this article.
NOTES
1.The People’s Republic of China is home to 2,188,000 Koreans, 97% of whom live in the three provinces of the Northeast (Jilin: 61%; Heilongjiang: 23%; Liaoning: 12%). In Jilin, apart from the Autonomous Prefecture of Yanbian, the Koreans are also strongly represented in the autonomous county of Changbai (home to 16% of the nationwide
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Korean population) as well as eleven villages, of which five are Korean-Manchu, and one town. In Heilongjiang and Liaoning, the Korean minority lives mainly in villages (26) and towns (10). For more details on the distribution of the Korean minority in China, cf. Zhu Zaixian, “Dui Zhongguo Chaoxianzu renkou fenbu yu tedian jiqi fazhan qushi de fenxi” (Analysis of the distribution of the population and of the characteristics of China’s Korean minority as well as of development prospects), in Chaoxianzu yanjiu luncong (research series on the Korean minority), Vol. 5, edited by the Research Centre on Nationalities of Yanbian University, Yanji, Yanbian daxue chubanshe, 2001, pp. 223-249. 2.The other autonomous prefectures are located in other regions of China in the west, the southwest and the south, mainly in the provinces of Yunnan, Sichuan, Guizhou and Gansu, and in the five autonomous regions. 3.To describe it, Chinese specialists on nationalities use the phrases qianru minzu (immigrant nationality) and kuajing minzu (transnational nationality). Interviews, Yanji, May 2001. 4.During our stay in Yanbian in August 2002, one month before the festivities began, numerous slogans were displayed proclaiming the need for economic development. For more details on the Yanbian anniversary, cf. Zhao Yang, “50th Anniversary of Founding of Yanbian’s Korean Autonomous Prefecture”, China Radio International, September 2002, http://english.cri.com.cn/english/2002/sep/69718.htm 5.Each September in Yanbian is the month selected for the broadcasting of propaganda about the union of nationalities (minzu tuanjie xuanchuan yue). It is always timed to coincide with the celebration of the anniversary of the founding of Yanbian as an autonomous administrative entity for national minorities. Xu Mingzhe, Dangdai yanbian Chaoxianzu shehui fazhan duice fenxi (Analyses and counter-measures of the development of society among the Yanbian Koreans today) Shenyang, Liaoning minzu chubanshe, 2001, p. 363. 6.Sanguan jiaoyu is an education movement organised by the central government and the provincial authorities whenever the latter judge that unity between the nationalities is in danger, whether because tension arises between the Han and the minorities or because the minority or the minorities step outside certain guidelines laid down by the authorities. This type of campaign is invariably aimed at the national minorities and is always carried out in minority areas (provinces, prefectures or counties). As its name suggests, the sanguan jiaoyu is the teaching of the three guan (which we may translate as idea, concept or conception). These three concepts are zhuguoguan (zhu = to reside, guo = country, namely China; no one should forget that the national minorities reside in the country, that is to say in China), minzuguan (no one should forget that these are nationalities of China, a multinational state and that they enjoy certain privileges at the political, economic and social level) and lishiguan (lishi = history; no one should forget that historically the minorities are part of China and that they have participated in the founding of this multinational state). The exact definition of the three concepts is a little vague; the few researchers who refer to them also give no precise definitions. To sum up, the sanguan jiaoyu is a campaign aimed at making the national minorities aware that the country, the state and China are more important than their nationality and that, while the specific nationality is respected (from the perspective of the centre), the national minorities must not set it above the state. Interviews, Yanji, 1 and 3 August 2002; Xu Mingzhe, op. cit., 2001, pp. 384-385. The sanguan jiaoyu campaign was relaunched in spring 2003 in Yanbian. The intention is
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preventive; the campaign is directly connected with the revision of the South Korean law on Koreans from abroad, which is to take place between now and the end of 2003. 7.Yanbian chaoxianzu zizhizhou zhi (Records of the Autonomous Prefecture of the Yanbian Koreans), Peking, Zhonghua shuju, 1996, pp. 253-354; Bruno Lasker, Les peuples de l’Asie en mouvement, Paris, Payot, 1946, p. 100. 8.We are concerned here with the treaties of Aïgoun and Peking. The treaty of Aïgoun, signed on 16 May 1858, placed the frontier between China and Russia along the River Amour, the areas lying to the south of the Amour and between the River Oussouri and the sea under Chinese and Russian dual jurisdiction. Two years later, the Peking treaty permanently transferred these territories to Russia, which meant China lost its access to the sea. 9.With the exception of the few Korean Catholics fleeing from state persecution in the Korean kingdom in the 1860s and 1870s, the main cause of this Korean emigration was economic. 10.For more detailed information about Russian and Japanese influences, cf. in particular André Fabre, Histoire de la Corée, Paris, l’Asiathèque, 2000, 419 p. 11.For more details on the issue of Korean migration between China, Korea and Japan, cf. Larisa V. Zabrovskaïa, “Consequences of Korean Emigration to Jiandao”, Korea Journal, spring, 1993, pp. 69-77. Jiandao is the old name for the present-day Yanbian prefecture. 12.Zhonghua renmin gongheguo diming cidian, (Dictionary of Geographical Names of the People’s Republic of China), volume on Jilin, Peking, Shangwu yinshuguan, 1994, pp. 252-253. 13.Mao Yuanxin lived in Harbin in a province of Heilongjiang. His arrival in Yanbian in August 1967 coincided with a radicalisation of the Cultural Revolution, and it was from this period onwards that a real policy of assimilation was launched against Yanbian’s Korean minority. Mao Yuanxin was not officially posted to Yanbian, but he arrived there at the time martial law was declared and all power passed into the hands of the People’s Liberation Army (PLA). The political situation in the prefecture was chaotic at that time because of the battles that had been raging between the PLA, various factions of Red Guards and members of the Korean minority. On his arrival, Mao Yuanxin declared that the leftist groups were not radical enough and proposed more actively to attack the Korean minority and its leaders; he founded a group called “red group” whose aim was to “liberate Yanbian”, defined as a kingdom in the hands of a few local Chaoxianzu. Actively supported by the PLA, Mao Yuanxin and his group quickly established themselves as the leaders of the prefecture. Why Mao Yuanxin went to stay in the Yanbian Korean Autonomous Prefecture is very unclear; even a specialist on that period, Lee Jeanyong, admits that he does not know the reason. It is very likely, however, that Mao Yuanxin came there on the orders of his uncle, Mao Zedong. While asking his forces to attack the Korean minority, Mao Yuanxin had a particular target in mind: Zhu Dehai, who had been governor of the prefecture since its foundation. Zhu Dehai was very close to Zhou Enlai and had acquired great power during the 1950s and 1960s. Along with Zhou, he had been party to the negotiations setting out the frontier with North Korea and had been an important element in defining China’s foreign policy towards North Korea. During the Cultural Revolution, Zhu Dehai was even accused of being a spy in the pay of North Korea. The attack upon him now was undoubtedly connected with the state of China’s relations with North Korea, which became very hostile at precisely this period. It may be that Mao had become suspicious of Zhu Dehai
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and asked his nephew to take a hand. Perhaps he could not do it directly because of Zhou’s support for Zhu Dehai. For detailed analyses of these times, cf. Bernard-Vincent Olivier, The Implementation of China’s Nationality Policy in the Northeastern Provinces, San Francisco, Mellen Research University Press, 1993, 283 pages; Lee Jeanyong, “Integration to the Chinese Society: Korean minority in China during the Campaign Period (1957-1978)”, Journal of Asia Pacific Affairs, Vol. 3, 2001, pp. 1-26. 14.Xu Mingzhe, op. cit., 2001, p. 364; Yanbian chaoxianzu zizhizhou zhi, op. cit., 1996, p. 345. 15.Li Delong ed., Jianshe mofan zizhizhou (Setting up a model prefecture), Changchun, Jilin renmin chubanshe, 1991, p. 3. 16.Park Kyung-Ae, “China’s Korean Policy and the Role of the Korean-Chinese in Inter- Korean Relations”, Korean Observer, Vol. XXII, No. 2, summer 1991, pp. 207-228. 17.For detailed studies on the Tumen project and what it represented for the Chinese authorities, cf. James Cotton, “China and Tumen River Cooperation: Jilin’s Coastal Development Strategy”, Asian Survey, Vol. XXXVI, No. 11, November, 1996, pp. 1086-1099; Jean-Marc Blanchard, “The Heyday of Beijing’s Participation in the Tumen River Area Development Program, 1990-1995: A Political Explanation”, Journal of Contemporary China, Vol. 9, No. 24, 2000, pp. 271-290; Sébastien Colin, “Ambitieuse tentative de coopération en Asie du Nord-Est: la zone de développement économique du fleuve Tumen”, Hérodote, No. 97, 2nd Term, 2000, pp. 88-106; Sébastien Colin, “Difficile émergence d’une coopération régionale en Asie du Nord-Est: progrès, problèmes et enjeux du programme Tumen”, in Philippe Pelletier et Christian Taillard, eds., Asie orientale: intégration régionale, (appearing shortly). 18.Between 1980 and 1990, the value of Yanbian’s industrial production rose from 995 million to 4,2 billion yuan, representing average annual growth of 9,92%. However, this rapid growth was matched by the economic development taking place elsewhere in the country, and the relative gaps in development were never closed. Over the same period, Yanbian’s growth rate was in fact similar to the provincial and national rates, but much lower than the growth rates in the coastal provinces. Cui Jinshu, “Yanbian jingji fazhan de xiankuang wenti ji silu” (Situation and problems of Yanbian’s economic development and suggestions), Yanbian daxue xuebao (shehui kexue ban), Vol. 33, No. 3, pp. 15-17. 19.Li Delong ed., op. cit., 1991, p. 3. 20.Outi Luova, “The use of ethnicity in local economic development: the case of Koreans in the Yanbian Korean Autonomous Prefecture, Jilin Province”, Provincial China, No. 6, April 1999, p. 23. 21.In 1979, twinning relationships were established between places in China and North Korea: Hunchun with Saebyôl, Tumen with Onsong, Longjing with Hoeryông and Helong with Musan. In April 1984, the Yanbian Korean Autonomous Prefecture was twinned with the North Korean municipality of Chôngjin. Yanbian chaoxianzu zizhizhou zhi, op. cit., 1996, p. 501. 22.The Sino-North Korean agreement on opening the border (bianjing jumin guojing tongxing zheng) was signed in 1955. It allows frontier populations to go and visit their families on the other side of the frontier. For a résumé of that agreement, cf. Yanbian chaoxianzu zizhizhou zhi, op. cit., 1996, pp. 545-547. For the complete text of the agreement, cf. Zhongchao liangguo bianjing jumin guojing tongxingzheng fafang he guanli banfa (Modalities allocating and managing the frontier passes for frontier residents of
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the People’s Republic of China and of the People’s Democratic Republic of Korea), 6 June 1955. 23.Lim Kûm-Suk, “Yônbyôn kwa josôn byôngyông jiyôkganûi gyôngje muyôk kyoryu hyôn hwangkwa jônmang” (Situation and prospects of commercial, economic and educational exchanges between the frontier regions of Yanbian and North Korea), in Kim Kang-Il, ed., Jungguk josônjok sahwoeûi munhwausu wa baljôn jônryak, (Strategy for development and cultural values of the Chaoxianzu society of China), Yanji, Yônbyôn inmin ch’ulbansa, 2001, pp. 377-378 (in Korean); Yanbian tongji nianjian 2000, (Yanbian Statistical Yearbook, 2000), Yanji, Yanbian renmin chubanshe, 2001, p. 282. 24.We are concerned here with the Dunhua, Antu and Tumen zones created in August 1992 and the Yanji zone created in May 1995. Cf. Pu Chengxian, “Tumenjiang diqu kaifa yu yanbian jingji” (The Tumen River Economic Development Zone and the Economy of Yanbian), in Chaoxianzu yanjiu luncong, op. cit., 2001, pp. 305-307. 25.Interviews, Yanji and Changchun, 2001. There are about forty Yanbian enterprises in the Rajin-Sonbong zone. With the exception of the Xiantong group and the Longxing Trading Company, most are small businesses, restaurants or travel agencies. 26.Xu Mingzhe, op. cit., 2001, p. 376. 27.By way of comparison, direct foreign investment in Jilin during the year 2000 amounted to about 596 million dollars. Jilin tongji nianjian 2001 (Jilin Statistical Yearbook, 2001), Peking, Zhongguo tongji chubanshe, 2001, p. 351. 28.Pu Chengxian, Yanbian jingji xingshi fenxi yu yuce (Analyses and Forecasts of Yanbian’s Economic Situation), Yanji, Yanbian daxue chubanshe, 2001, pp. 80-85. 29.Outi Luova, op. cit., 1999, p. 24 and p. 31; interviews, Yanji, June 2001. 30.Pu Chengxian, op. cit., 2001, p. 85. 31.The value of frontier trade with North Korea in 2000 scarcely reached that of 1989. 32.The minying qiye are private enterprises that bring together capital from one or more individuals, traders or others. In 2000, 20% of the trade between Yanbian and Russia and almost all the trade between Yanbian and North Korea were provided by these minying qiye. As for the frontier trade with North Korea, most of the traders take advantage of the open border between the two countries to go to the handful of the free open markets in the North Korean frontier districts. The Yanbian prefecture has a frontier crossing into Russia and seven into North Korea; in that order, they are Changlingzi (Hunchun), Tumen, Shatuozi, Quanhe, Nanping, Changshenzhen (Guchengli), Sanhe and Kaishantun (cf. map). Interviews and observations during a visit to Yanbian, August 2002. 33.In 2000, the value of Sino-Russian trade through Heihe and Suifenhe reached 1.47 and 10.1 billion dollars respectively, and, by itself, Suifenhe was the crossing point for 12.5% of Sino-Russian frontier trade. Located to the south of Liaoning, the Dandong frontier post is the crossing point for 60% of Sino-North Korean trade as against only 24% for Yanbian, even though the latter has seven frontier posts along its North Korean border. 34.For more details on the problems of the Tumen programme, cf. Sébastien Colin, op. cit., (appearing shortly). 35.Between 1991 and 2000, ten billion yuan were invested by China’s central and provincial authorities. According to some sources, this sum was far too little to drive the prefecture’s development through to a successful conclusion. Interviews, February and June 2001. 36.James Cotton, op. cit., 1996, pp. 1096-1098; interviews, Yanji, February 2001.
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37.For detailed analyses on how the double identity of the Chaoxianzu was formed, cf. Choi Woo-Gill, “The Korean Minority in China: the Change of its Identity”, Development and Society, Vol. 30, No. 1, June 2001, pp. 119-141; Park Han-Shik, “Political Culture and Ideology of the Korean Minority in China”, Korean Studies, Vol. 11, 1987, pp. 13-32; Bernard-Vincent Olivier, “Les fluctuations de l’identité des Coréens de Chine”, in Yim Seong-Sook. ed., La Corée, le peuple et ses valeurs culturelles d’hier à aujourd’hui, Montréal, Les presses de l’Université de Montréal, 2000, pp. 125-138. 38.Interviews, Yanji, June 2001. 39.According to Outi Luova, the Yanbian Koreans were unable to adapt to the reforms for three reasons. Firstly, they were too attached to their traditional cultivation of rice and were reluctant to commit themselves to other activities. Secondly, being faithful to their Confucian culture, they considered it improper to engage in trade. Lastly, having benefited greatly from the socialist system, they did not want to leave it in order to expose themselves to the intense and uncertain competition of the market. Outi Luova, op. cit., 1999, p. 19. 40.Shen Wangen, Tan Yujie, “Shilun yanbian chengzhen pinkun renkou de fenbu tezheng” (Essay on how urban poverty in Yanbian is distributed), Yanbian daxue xuebao (shehui kexue ban), Vol. 35, No. 1, March 2002, pp. 34-37; interviews, June 2001. 41.Pu Minzi, “Qiantan chaoxianzu renkou fazhan zhong de jige wenti” (Short discussion of a few problems relating to the population of Korean nationality), in Chaoxianzu yanjiu luncong, op. cit., 2001, pp. 250-255. 42.Outi Luova, “Chinese Korean Labour Migration to South Korea: Changing Ethnic and National Identities”, June 2002, an article that is available on the Internet at http:// www.iisg.nl/%7Eclara/clarawp.htm. 43.Outi Luova, op. cit., 2002. 44.Renmin Ribao, 29 August 2002, online edition (English version) at http:// english.peopledaily.com.cn/20020829/print20020829_102266.html. 45.Interviews, Yanji, June 2001; Pu Minzi, op. cit., 2001, pp. 250-255. 46.For a comparison of the figures, cf. White Paper on Human Rights in North Korea, 2001, Korea Institute for National Unification, pp. 120-121. 47.Interviews, Yanji, August 2002. 48.About 85% of the North Korean refugees are said to be married to Chinese peasants. Interview, Yanji, August 2002. 49.Choi Woo-Gill, op. cit., 2001, pp. 137-138. Interviews, Seoul and Yanji, August 2002. 50.Xu Mingzhe, op. cit., 2001, p. 371. 51.Ibid., 2001, p. 371. 52.In 2001, the percentage of Korean officials was 3.9 points above that of the population. 53.Wang Dongyang, Jin Guangshi, “Yanbian chaoxianzu renkou xiankuang ji renkou fazhan zhanlüe” (Present situation of the Korean population of Yanbian and its development strategy), Yanbian daxue xuebao (shehui kexue ban), Vol. 33, No. 1, February, 2000, pp. 76-79. 54.Outi Luova, op. cit., 2002; Xu Mingzhe, op. cit., 2001, pp. 378-379; Choi Woo-Gill, op. cit., 2001, p. 139. 55.In 1996, only 60% of young Chinese Koreans living in the big cities spoke Korean. Choi Woo-Gill, op. cit., 2001, p. 126. 56.Park Han-Shik, op. cit., 1987, pp. 25-28; Choi Woo-Gill, op. cit., 2001, p. 131.
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57.For more on the disillusionment of the Chaoxianzu in South Korea, cf. Bernard- Vincent Olivier, op. cit., 2000; Outi Luova, op. cit., 2002. 58.Manduertu, Zhongguo shaoshu minzu xianzhuang yu fazhan diaocha yanjiu congshu, Chaoxianzu juan, Longjing shi (Series of studies and surveys relating to the situation and development of China’s national minorities, volume on the Korean minority, municipality of Longjing), Peking, Minzu chubanshe, 1999, p. 287. 59.In 1998, 70% of China’s Koreans considered China to be their country. Choi Woo-Gill, op. cit., 2001, p. 139. 60.Xu Mingzhe, op. cit., 2001, p. 364; Yanbian chaoxianzu zizhizhou zhi, op. cit., 1996, p. 345. According to Liu Zanwen, this situation is valid in all the Korean autonomous administrative entities in the Northeast. Cf. Liu Zanwen, “Zhongguo dongbei chaoxianzu zizhi difang minzu hemu de chengyin chutan” (Early research into the origin of harmony between nationalities in the autonomous zones of the Koreans of Northeast China), Heilongjiang minzu congkan, No. 2, 2001, pp. 23-28. 61.Interviews, Yanji, Changchun and Peking, 2001. 62.Scott Snyder, “Focus on Stability Despite New Challenges”, Comparative connections, Vol. 1, July-September 1999. (Review accessible online at http://www.csis.org). 63.Ibid. 64.Scott Snyder, “Navigating the Swiftly Shifting Currents”, Comparative Connections, Vol. 3, July-September 2001. 65.Scott Snyder, “Keeping the Eye on the (WTO) Prize While Containing Consular Crises”, Comparative Connections, Vol. 3, October-December 2001. 66.For a detailed list of these anecdotes, cf. Scott Snyder, “Transit, Traffic Control, and Telecoms: Crossing the “T’s” in Sino-Korean Exchange”, Comparative Connections, Vol. 4, January-March 2002. 67.Scott Snyder, “Beijing in the Driver’s Seat? China’s Rising Influence on the Two Koreas”, Comparative Connections, Vol. 4, October-December 2002. 68.Chosun Ilbo, 10 and 28 January 2003, English-language editions available online at http://english.chosun.com. 69.Scott Snyder, op. cit., Vol. 4, January-March 2002. 70.Interviews, Peking, August 2002. 71.Chosun Ilbo (online editions), 9 June and 14 November 2002. 72.While this accusation is mainly a pretext for the arrests, one cannot deny the fact that some NGOs attempt to convert a few souls in exchange for their help. This religious influence generally only affects North Korean refugees, but also some Chaoxianzu, which embarrasses the central government: it sees in it a challenge to its own political control. 73.Scott Snyder, “Happy Tenth for PRC-ROK Relations! Celebrate While You Can, Because Tough Times are Ahead”, Comparative Connections, Vol. 4, July-September 2002. 74.Interviews, Seoul and Yanji, August 2002. 75.Scott Snyder, op. cit., Vol. 3, October-December 2001. 76.Interview, Yanji, 3 August 2002. 77.Among these studies, cf. Quan Guoquan, Yu tian, “Dui zhongguo chaoxianzu shengcun yu fazhan wenti de shiji sikao” (Reflections on the problems of existence and development of China’s Koreans), Yanbian daxue xuebao (shehui kexue ban), Vol. 32, No. 4, November, 1999, pp. 93-98; Piao Jinhai, Zheng Xinzhe, “Lüelun zhongguo chaoxianzu de aiguozhuyi qingjie” (Brief viewpoint on the patriotic feelings of China’s
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Koreans), Zhongyang minzu daxue xuebao, No. 4, 2000, pp. 6-12; Liu Zanwen, op. cit., 2001, pp. 23-28. 78.Apart from Hunchun, fourteen other chukou jiagong qu have been created in Dalian, Tianjin, Peking, Tianzu, Yantai, Weihai, Kunshan, Suzhou, Shanghai, Songjiang, Hangzhou, Xiamen, Xinglin, Shenzhen, Guangzhou, Wuhan and Chengdu. Among these fifteen zones, only those of Hunchun, Wuhan and Chengdu are not located along China’s coast. For more information about these zones, cf. Tsukada Hiroyuki, “The Export Processing Zone: Its Current Situation and Prospects”, China Newsletter, Jetro, Vol. 6, No. 149, 2000, pp. 2-14. 79.Pu Chengxian, op. cit., 2001, p. 75; Fang Min, “Guanyu Tumenjiang diqu kaifang kaifa gongzuo qingkuang de baogao” (Report on the Tumen River Economic Development Zone: the situation and the activity of opening it up and developing it), July 17th 2002, (unpublished report), p. 2. Fang Min is the Director of the Development Bureau of the Tumen River Economic Development Zone of the province of Jilin. 80.Interviews, Yanji, February and June 2001. 81.Interviews, Yanji, February and June 2001. 82.Cf. online editions of Renmin Ribao, 19 March 2002 (http:// english.peopledaily.com.cn/200203/19/print20020319_92371.html) and 6 August 2002 (http://english.peopledaily.com.cn/200208/06/print20020806_100983.html). 83.Tumen Secretariat, online document at http://www.tumenprogramme.org/tumen/ news/YanjiInvest Forum. 84.Scott Snyder, “Beijing at Center Stage or Upstaged By the Two Kims?”, Comparative Connections, Vol. 2, April-June 2000. 85.Scott Snyder, “The Winds of Change: Fresh Air or Pollution?”, Comparative Connections, Vol. 3, January-March 2001. 86.Scott Snyder, op. cit., Comparative Connections, Vol. 3, July-September 2001. 87.Scott Snyder, op. cit., Vol. 3, January-March 2001. 88.Wang Jianmin, Mao Feng, “Zhongchao die dui die hupo qingbaowang” (China and North Korea spy on each other and suppress their network of mutual information), Yazhou zhoukan, 27 January – 2 February, 2003, p. 4. 89.Piao Changjie, “Yanbian zai canyu xibu dakaifa zhanlüe zhong ying zhua hao de jige wenti” (The few problems that Yanbian will have to confront while participating in the development strategy of the Great West), Yanbian daxue xuebao (shehui kexue ban), Vol. 35, No. 2, June, 2002, pp. 33-37. 90.Xuan Dongri, An Yuhua, “Zhongguo jiaru WTO dui yanbian jingji de yingxiang jiqi duice tantao” (The infuence of China’s accession to the WTO on Yanbian’s economy, counter-measures and discussions), Yanbian daxue xuebao (shehui kexue ban), Vol. 33, No. 3, August, 2000, pp. 1-4; Long Yongtu, “The Tumen Region and the Impact of China’s Accession to WTO”, Tumen update, No. 5, May, 2002, p. 4 and 5. Long Yongtu is the Deputy Minister for External Trade and Economic Co-operation and was the head of the Chinese delegation in the negotiations leading up to China’s entry to the WTO. 91.These destabilising influences would arise only if reunification happens violently and drives many Koreans to flee into the Yanbian prefecture and elsewhere in China. In the case of a gradual and peaceful reunification, the destabilising factors would be linked only to a general emigration of Yanbian Koreans towards South Korea or to South Korean political claims. Apart from a few isolated speeches coming from small extreme right-wing groupings, no political claims to Yanbian are being made in South Korea.
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Society
China Perspectives, 48 | july- august 2003 30
The Hazards of the Right to an Education A study of the schooling of migrant worker children in Chengdu
Chloé Froissart
NOTE DE L’ÉDITEUR
Translated from the French original by Peter Brown
1 Education for all is both a basic civil right and a determining factor in a country’s development. It is not, however, universally guaranteed in the People’s Republic of China. This is especially true for the hundreds of thousands of children from the countryside whose parents have come to the city in search of employment. Excluded from the urban education system until 1996, only a fraction of these children now have access to it in circumstances that are turning them, as a group, into victims of discrimination. Yet, the 1982 Chinese Constitution stipulates that “the citizens of the People’s Republic of China have the right as well as the duty to receive an education” (art. 46). In 1986, China introduced a system of compulsory education lasting nine years for every child from the age of six or seven and ratified the United Nations Charter on the Rights of the Child as well as the International Convention on Economic, Social and Cultural Rights, both of which mention the right to an education. So, how can we understand that this right is not guaranteed, while it is constantly being reaffirmed by the Chinese state? A number of community initiatives have come about to alleviate the difficulties that migrant children have in gaining access to public education. Thus some non-government schools specialising in accommodating these children have been created. Yet, does the education that these schools offer their pupils enable them to counter the discrimination of which they are victim? How can we explain the difficulties that these schools are encountering in trying to obtain a guarantee from the state and what strategies are they implementing to gain public recognition? A worrying situation
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2 The problem is an urgent one, and we can guess that it is going to become more acute by dint of the increase both in family migrations and in the length of their stay in the cities 1. As early as 1996, the State Commission for Education estimated the number of school-age migrant children to be between two and three million 2. This can only be an approximation, doubtless on the low side, as the long, complicated and costly formalities that migrants have to go through in order to be allowed to reside and work in the cities mean that many of them remain illegal and so do not show up in the census. Their numbers have been put at 100 million by the Chinese government and at 120 million by Human Rights in China 3. Out of a sample of 102 migrant workers who we interviewed in Chengdu, the capital of Sichuan province, 36% have come with their children and nearly three-quarters wish to settle in the city. This means that many children, who would be regarded as being from the countryside given that this status is passed on from one generation to the next, are in actual fact yet to join their parents in the city or be born there 4.
3 The reason why these children come to the city in the first place is because they have no chance to continue their studies in the country. The education system in rural areas, which receives much less state support than in the cities (5), is not in a position to offer them an education that would enable them to have a better future than their parents had. How can we explain the fact that these children do not have access to the same conditions for study as city residents do? Institutional barriers 4 Chinese society rests on a fundamental institution, the system of residence (hukou), which appears neither in the Constitution nor in the laws of the country but was gradually introduced by administrative regulations during the course of the 1950s 6 in order to respond to the need for social control and to the choices made by the regime for economic development. During the Maoist period, it was the cornerstone of a broader economic and administrative package identifying people in terms of their place of registration and conferring on them rights that varied in relation to their place in the system of production. While the state took direct responsibility for “the iron bowl of rice” 7 of city dwellers, rural communities had to rely on their own strengths, at the same time as producing the surpluses necessary to finance industrialisation. The reforms had the effect of making the system of residency more flexible, and the movement of people became tolerated to accommodate the needs of the market economy, but it still remains in force and is blocking the emergence of any real citizenry. Belonging to society is still a function of one’s place of registration. The education of children, like all other social rights, is guaranteed by local governments only for their own constituents. That is why the right to an education, recognised under Chinese law, has no legal value for the children who reside in a place that is different to the one in which they are registered. The system of the hukou, increasing as it does the risk and cost of migration, is deliberately kept in place by the Chinese authorities who fear being confronted by a massive and uncontrollable rural exodus. Migrations have to enable the urban economy’s needs in terms of labour to be met as they arise without jeopardising the demographic balance between the cities and the countryside.
5 This system for managing and controlling the population was strengthened by the decentralisation laws that began to be put in place from the early 1980s. The Law on Compulsory Education in the People’s Republic of China (8), passed at the Fourth Conference
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of the Sixth National People’s Congress on April 12th 1986, introduced a system of compulsory schooling comprising the six years of primary education and the three years of junior secondary, but transferred the responsibility and management of education to local governments. “The educational sphere, under the authority of the State Council, is the responsibility of local governments, with its management being decentralised” (art. 8). The Law on Education in the People’s Republic of China (9), voted for in 1995, strengthened the principle of “local responsibility and a graded management structure” (difang fuze, fenji guanli). Primary and secondary education are first and foremost a matter for the cantons in the rural areas and for the districts in the cities, with higher education coming under the auspices of the provinces (arts. 14 and 15). In other words, at the very time when the Chinese state was undertaking economic reforms aimed at the market economy posited on the free circulation of people, the nature of the administrative reforms that it introduced ran counter to the guarantee of individual rights by making them subject to the condition of territorial management.
6 It is in these circumstances that we must understand the publication of the Temporary Measures for the Schooling of Children and Adolescents from the Migrating Population by the State Commission for Education and the Ministry for Public Security in 1998 (the 1998 Measures) 10. While these measures allowed migrant children to enrol in public schools in the cities as well as the setting up of specialist non-government schools to receive them, they were an attempt on the one hand to regain control of the situation on the ground, in particular the appearance of illegal schools, and on the other to endorse discriminatory practices against this population more even than to put up institutional barriers to the equality of rights as such.
7 First of all, as their name suggests, they were temporary measures that proposed temporary solutions by tinkering with an institutional system without undermining it. They were in no way concerned to encourage pupils to have their schooling somewhere other than where their hukou is registered. The measures explicitly brought about a transfer of responsibility from rural to urban governments regarding the compulsory education of children with more than six months’ residence in a city and who do not have either parents or a guardian in a rural area. However, they have not been accompanied by any transfer of funds required for their implementation. Local governments continue to allocate resources to education in relation to the number of their permanent residents 11. Children who have been resident in a city for several years are therefore still in fact deprived of the public assistance to which they are rightfully entitled by law. Moreover, these measures are minimalist (no specific mention is made about urban governments being required to “create favourable conditions for compulsory schooling for children from a migrant population background”), carrying little obligation (no control system having been provided), and leave a good deal of room for manoeuvre to “the People’s governments in the provinces, the autonomous regions and the municipalities under direct administration [that] determine measures to be applied in relation to their situation” (art. 18). These measures illustrate what has become, in popular parlance, the unofficial slogan of decentralisation: “the centre proposes, local government disposes” (zhongyang you zhengce, difang you duice). The state school: a “melting pot” of inequalities and a factor of marginalisation 8 The 1998 Measures state that children of migrants must be first and foremost educated “temporarily” (jiedu) in state schools. But this permission to enrol is subject to
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conditions and does not come with any guarantee. It concerns only “legal” children with a temporary city residence permit and who were not born outside the plan. The rural and urban governments are requested to co-operate in order to strictly control this group of people. Migrant children are required to be registered with the government of their village and the body in charge of education in their canton (from which they have to get an authorisation in order to be able to attend school in the city), as well as with their school and the police station in their place of origin. With these papers, they must then file a request with the school closest to their city residence, which is within its rights to refuse admission to the child. In the case of rejection, a second request must be made to the Education office of the place of immigration that will take on the responsibility of “finding a solution through arbitration” (arts. 5 and 8). When we realise the difficulties that the rural population has in gaining access to government agencies, the further problems that it encounters in order to obtain authorisations and the charging of arbitrary taxes of which it is victim, these preliminary steps already appear as an almost insurmountable hurdle to migrant children being able to go to school. They are therefore little adhered to in practice.
9 The second condition for enrolling migrant children in state schools is an economic one, school fees being fully the responsibility of families. In order to avoid the problem of allocating public resources mentioned above, the 1998 Measures provide for the possibility for urban schools to raise “temporary enrolment taxes” (jiedufei) in accordance with national legislation 12. The latter makes the Municipal Offices of Prices, Finances and Education jointly responsible for setting a benchmark for this tax and submitting it for approval to the provincial government. In Chengdu, the norm is about 400 yuan a semester for primary school and 1,000 yuan a semester for junior secondary 13. These figures are an average as the amount of this tax varies in reality in relation to the prestige of the schools and the quality of the teaching. Moreover, some schools consider that they must be compensated for accepting students who, in their view, undermine their standards and reputation, and to whom their legal responsibility remains unclear. In actual practice, this levy is therefore at the discretion of the school principal. According to the parents of children at Bashu School, a non-government school in Chengdu specialising in receiving migrant children, it amounts to about 9,000 yuan for the six years of primary school, that is about 1,500 yuan a year. Many schools require full payment of this tax for the six years of primary school or for several years in advance, while the legislation itself stipulates payment by semester. The amounts due are not generally reimbursed in cases where children leave the school, whether they are expelled or their parents decide to withdraw them from the school. In a context of the de facto and non-regulated privatisation of the Chinese education system, the payment of this tax is in addition to the school fees (about 350 yuan for a semester of primary school) as well as to the countless levies arbitrarily put in place by state schools over the past few years for the needs of their day-to-day operation. Thus it is that English, computer science and sport have become fee-paying optional courses which cost, again according to the parents at Bashu School, more than 2,000 yuan a year. These same parents also complain about the dramatic increases in all sorts of unwarranted taxes (luan shou fei): for night classes, sitting examinations, having people supervise in the playground and the canteen, etc. 14. If the problem is the same for city residents, and this in spite of Chinese law guaranteeing free, compulsory education, these parents, who have emigrated above all for economic reasons, cannot cope with so many expenses and are often forced to take their children out of school.
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10 This de facto privatisation is overlaid by a non-transparent system of control that is exercised by district governments with a stake in it, either directly or indirectly, in so far as it allows them to lighten their expenditure. The implementation of an effective control mechanism turns out to be at the very least illusory, if one thinks that the Chinese state devotes only 2.5% of its GNP to education—that is less than the great majority of the poorest developing countries, which on average allocate 4% of their GNP to it (15)—and where, in the absence of any separation of powers, there exist no judicial controls. The only other course of action open to parents is to complain to the administrative bodies in charge of education, under whose jurisdiction the schools are placed 16. While the “construction taxes” and “support taxes” given to schools, that could add up to several tens of thousands of yuan a year, have been largely abolished in practice following their banning by the central authorities (17), others have appeared in their place. Quite often in China, political campaigns attempt to make up for the failures and contradictions of the system. One such campaign, which began in Chengdu in February 2003, announced the total elimination of the arbitrary raising of taxes by schools by the end of March 18. In mid-April (19), the media were still calling on parents to denounce the practice, although the authorities denounced the problem themselves. However, we are still far from a political campaign in favour of the right to an education for children from the countryside, particularly given that discrimination is also part of a conscious strategy by the urban authorities to limit the influx of migrants and maximise the profits generated by their labour, at the same time as minimising the cost of social benefits.
11 Added to this institutional discrimination against migrant children is another, popular one, in which the legislation is sometimes complicit. The urban schools—those that are not explicitly obliged by law to do so—are reluctant to accommodate these pupils from the countryside by dint of their supposed “lowly quality” (sushi taidi). This expression not only refers to the often mediocre academic level of these children, attributable to the detrimental state in which the education system in the countryside finds itself, but also carries an essentialist connotation, that is that these children are assumed to have an inherent “flaw” due to a considerable backwardness in their process of “civilisation”. They are isolated within the school, with the other students keeping them away from their games or putting them down because they are badly dressed. Moreover, the teachers sometimes put pressure on the school principals to expel the migrants, as they receive bonuses if the students do well in their exams, and so are hostile to these children whose results are generally inferior. Similarly, urban families take a dim view of the increase in the number of migrants in their children’s school 20. For these reasons, no doubt more than to avoid the inadequacy of the ability of urban schools to accommodate these migrant children (21), the 1998 Measures foreshadowed the possibility of creating extra classes in which the migrant children could receive instruction from retired teachers (art. 10), thereby legitimising a “two gear” education system.
12 Some migrant children see the doors to state schools quite simply being shut to them, even if their parents can afford the school fees. This is the case, for example, of handicapped children: limping may be a reason for refusing a child entry to a school, as he or she “is not the same as the others”. Migrant children who are admitted despite their “handicap” do not get any assistance or attention from the teachers. One father tells how his son, who suffers from a mild shaking in his hands and does not write as
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fast as the others, has not been able to carry on with his studies in a state school, as the teachers wipe out what is on the blackboard without waiting for him to finish taking it down and the other students do not want to lend him their exercise books 22.
13 The parents whom we have met emphasise that, even when they have the necessary money for a state school, their children are in an environment that is too hostile to allow proper study. They add that, contrary to their mission, state schools prevent social integration: “Right from an early age, the children feel rejected and harbour a feeling of bitterness towards society” 23. Is there an alternative to state schools? 14 To respond to the needs of these children who are excluded from the education system, schools started to spring up in the major urban centres in the mid-1990s through private, informal and spontaneous initiatives. Often set up by the migrants themselves, they attest to a form of self-reliance to deal with a problem to which no-one was providing any solution. One of the earliest of these, the Xingzhi School, was opened in 1994 in a row of huts in a disused lot in Peking by a female teacher from the countryside in Hebei province, after her friends and neighbours, migrant workers like her, had asked her to give a few classes to their children 24.
15 The fees for these self-managed and self-funded schools are in Peking no more than 300 yuan a semester 25 on average, and they “make do” as best they can. Located on the city outskirts where the migrants live, their premises are old flats, single-storey unhealthy houses, or abandoned warehouses that have been refitted. They generally employ a teaching staff without either the experience or the level required; some of whom come from the country, just like some of the school books used. The sanitary, security and teaching conditions are often deplorable, with the children being piled up in small, badly ventilated and badly lit classrooms that are stifling in summer. In these classes that routinely have more than fifty people in them, students of different ages and levels follow the same courses. Few of these schools offer any secondary education. The furniture—tables, chairs, board, etc.—is made in a roughshod way by the school staff or bought cheaply from state schools that sell off their used equipment. Few schools have any playground or sporting equipment 26.
16 At the end of 1996, the Peking districts of Haidian and Fengtai had at least seven primary schools set up by and for migrants, that were attended by more than a thousand children 27. By the end of 2000, in Peking alone, there were over two hundred schools of this kind with more than forty thousand pupils 28. On account of their growing number and the competition between them, some of the more important schools tried to bring the quality of their teaching and material into line with that of the urban schools. Thus, while the schools with several thousand pupils gradually introduced classes in English and computer studies, those with only a few dozen students are still struggling to provide basic education in Chinese and mathematics 29.
17 These schools have no legal status, which means that they cannot award certificates or give status for courses completed, which is a considerable problem when the students wish to re-enter a state school or have the level of their studies recognised for the purpose of finding a job. Moreover, these schools are routinely banned and demolished without the authorities worrying about placing the children in other schools. However, the 1998 Temporary Measures for the Schooling of Children and Adolescents of the Migrant Population announced the possibility for the “social forces” to create “substandard” (jianyi xuexiao) schools for migrant children to which local governments and bodies in
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charge of education are required to give their “active support” (art. 9). But the law stopped there, so that out of the 19 provisions contained in these Measures, only one concerned those schools that specialise in accommodating migrant children. Thus, the civil servants responsible for authorising and controlling these schools, who have “no directive to follow or any idea of government requirements regarding these informal schools”, as the director of one of them in Peking laments (30), perfectly naturally referred to the Regulations for the Establishment of Schools by the Social Forces (1997 Regulations) (31), drawn up by the State Council in 1997. These regulations have the aim of “encouraging businesses, institutions, associations and other social organisations as well as citizens” to develop the sectors of professional training and adult education, as well as any preceding, following or complementing the period of compulsory schooling (day care, advanced teaching of languages, short courses to prepare for exams, etc.). With regard to the compulsory education system, private initiatives are encouraged in order to “complement” the state sector system when the latter cannot meet the social demand. This has given rise to the creation of what are commonly called the “aristocratic schools” (guizu xuexiao) offering a well-heeled elite better conditions of education. The requirements in terms of the internal organisation and day-to-day operation of these schools, the initial investment and the income, quality of equipment, staff and teaching corps, etc., are in total contradiction to the particular dispensation granted by the 1998 Measures to those schools hosting migrants and are manifestly not adapted to the specific problem of the schooling of these children. The lack of means available to migrants (finance, knowledge and social network), their ignorance of the law as well as the often distant and mistrustful relations that they have with the authorities explain the impossibility in which they find themselves to set up schools in accordance with the criteria laid down by the 1997 Regulations/ or should this be the 1998 Measures?. The latter are to be replaced, from September 1st 2003, by the Law for Promoting Non-State School Education in the PRC ( 32), passed in December 2002 by the Permanent Committee of the National People’s Congress. This law will, in any event, do no more than highlight the problem, to the extent that it increases the number of conditions for creating such schools and strengthens control over them. However, the research we have carried out in Chengdu at a new generation of educational establishments reveals that the difficulties facing the schools for the children of migrants in obtaining state recognition go well beyond the mere lack of legislation dealing with them. The race for recognition 18 We noticed in the Sichuan capital the appearance of a new generation of principals who set up schools for migrant children about a year ago. These are city residents not originally from Chengdu who, both through personal conviction and drawn by the profits to be made, wanted to respond to the needs of a migrant population that continues to swell. Over the course of the nearly ten years that this phenomenon of migrant schools has been evolving, some have seen this sector as a potential source of profit. Thus, before opening his school in Chengdu, the founder of Yangfan School conducted a vast survey in several Chinese cities that looked very much like a marketing study. These new directors have, moreover, been encouraged by a favourable political climate, particularly through the campaign against poverty and by giving help to “weaker social groups” (ruoshi qunti), which was announced at the session of the National People’s Congress in March 2002. The people setting up these schools, not being migrant workers themselves, possess the intellectual and financial
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means needed to carry out their plans. The two schools that we have followed the closest (33), Bashu and Yangfan, are based on an initial investment of 200,000 yuan and 500,000 yuan respectively. The founder of the first named, Mrs Xiao Hongtao, from Chongqing, is a former junior secondary school teacher who comes from a long line of teachers in her family, with her brothers and sisters also practising teachers. She claims to have been struck by the sight of children shining shoes in the street instead of going to school. The founder of the second school, Mr Zhou Yong’an, who comes from the province of Jiangxi, has worked as a tertiary teacher and engineer. He says that he wanted to repay his debt to the rural farm workers who had always treated him well when he was sent to the countryside on three occasions during the Maoist period. Both have complied with the Criteria of Sichuan Province for the Establishment of Non-Government Educational Institutions 34 that set out the criteria that must be met by the school’s principal and teaching and administrative staff, by its land, buildings and equipment, as well as the minimum initial investment needed. They have also complied with the Regulations for the Creation of Schools by the Social Forces 35 published by the Education Office in their local district, that specify the nature of the application required, as well as the way to approach the Education Offices of both the district government, the administrative village’s government, the street committee, the office of Public Security, the Office of Prices and finally in the Office of Civil Affairs.
19 With one or two minor exceptions, these two schools meet the standards required. Yet their existence is threatened. One of them, Bashu, has never received a licence (xukezheng), and the other, Yangfan, is about to lose its licence. They are both located on the outskirts of the city, in poor areas with a heavy concentration of migrants. They do not set any conditions for recruiting students, nor do they require any hukou type paper, temporary residence permit or government authorisation from the applicant’s place of origin. As the founder and director of Yangfan school points out, “studying is a right that cannot suffer any condition”. The school fees are reasonable, although higher than in the Peking schools set up by migrants, owing to the better quality of the latter (this is saying that the better quality schools are cheaper?). The school fees in Yangfan amount to 500 yuan a semester for the last part of kindergarten and 550 yuan per semester for the first year of primary school, increasing by 10 yuan for each grade thereafter. Bashu, smaller in size, has fees that are slightly higher: 500 yuan a semester for the final year of kindergarten and 650 yuan a semester for all primary classes. These fees remain, however, under the ceiling of 750 yuan a semester set by the municipal authorities for private schools offering classes corresponding to the period of compulsory schooling, and, in line with national legislation, families that are struggling can take advantage of preferential rates, some children even having temporary fee exemption. These schools accommodate a lot of handicapped children who are not accepted or are badly treated in the state schools. The students follow the compulsory curriculum in all subjects, including classes in English, music, sport and computing that are regarded in state schools as being optional and for which the children of migrants are obliged to pay additional fees. The textbooks used are the same as in the state schools.
20 Yangfan School is located to the northwest of the city, in the district of Chenghua. It comprises a main school at Honghuayan cun (village) and an annex at Qinglong xiang (canton). The teaching ranges from kindergarten to the first year of secondary school. Established in January 2002, the school received a licence the following July. It has the reputation of being the first private school in Chengdu to have taken in children of
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migrants and is also the most important one that we have visited. It has about 1,500 students, spread between 13 classes in the main building and 10 classes in the annex, and employs 52 teachers as well as 8 administrators. The main school is located in an old, refurbished warehouse and, while the conditions are modest, the buildings are in good order. The school has a playground with sporting equipment (ping-pong, basketball court), 40 recycled computers, a modest library and a music room. There are, however, more than fifty pupils per class, which is the maximum allowed under the law.
21 Bashu School is located to the southwest of the city, in the district of Wuhou. Despite opening its doors in June 2002 and officially beginning to teach classes in September of the same year, the school has still to be granted a licence. The teaching extends from kindergarten to the final year of primary school. The school has 7 classes, one for each grade made up of between 16 and 50 students. Overall, it has 218 students, 14 teachers and two administrators. The teachers, the majority of whom are from the city, are recruited by specialist employment agencies and have all the necessary diplomas, even if they do not always have the experience required by law. The school, which occupies 2,500 square metres of land, has put up buildings especially designed for classroom use. Furthermore, it has a leafy playground area with sporting equipment (basketball court, parallel bars, ping pong), a canteen with on-site kitchens, 10 recycled computers and an electric piano.
22 These two schools attest to the real efforts made to bring the quality of their teaching and equipment closer to that of urban standards, even if they cannot compete with the flamboyant luxury of the “aristocratic” private schools. In the words of Zhou Yong’an himself, the level of teaching still needs improvement: 60% of the teaching body in this school comes from the countryside, where the level of training is mediocre, and some teachers do not have the five years experience required by law. Many teachers are in retirement, others come from training departments within companies. In fact, these schools cannot hope to attract teachers as qualified as those in the prestigious state or private schools, due to the lower salaries that they have to offer them: 600 yuan a month at Yangfan, and from 600 to 800 yuan at Bashu, to which must be added bonuses in relation to the quality of teaching. Yangfan School encourages its teachers to follow fee-paying training courses organised by a specialist state school, but the costs have to be borne by the teachers themselves, as the school cannot take on this responsibility, although the legislation dealing with private schools requires them to do so. In spite of these difficulties, these schools offer better educational conditions than schools in rural areas.
23 The hostility of local governments to these schools specialising in teaching migrant children cannot be explained solely by the apprehension, as real and justified as it may be, of being held responsible for authorising schools that do not provide sufficient guarantees. With the absence of any real legislation or control system a factor, the number of cases of private schools going bankrupt and closing down has been growing considerably over the past few years, with school directors disappearing from one day to the next without reimbursing the money owed to families. However, in the main this concerns private “aristocratic” schools and not schools for migrants. In order to counteract this risk, the Criteria for the Establishment of Non-Government Educational Institutions in the Province of Sichuan set the figure of 200,000 yuan as the minimum initial investment required for a primary school and one million for a junior secondary
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school. The district governments require, moreover, the educational establishments to lodge a bank deposit as surety. In the province of Wuhou this amounts to 60,000 yuan for 320 students and can only be recovered after twenty years. Even if these sums are often prohibitive for the migrant schools, they do at least guarantee compensation for families in case of bankruptcy. The district governments responsible for authorising these schools also refer to their poor material and sanitary conditions to justify their closure. We have already indicated how specious this argument is in a context where the children attending these schools—supposed, by law, to be the subject of special tolerance and support from the authorities—need above all to see that they have a guaranteed minimum level of education. The deeper reasons for this hostility are to be found in conflicts of economic interest. The children of migrants who attend non- government schools do not pay the taxes that they are obliged to in the state schools, which amounts to a financial shortfall both for them and for local governments. The latter are also little inclined to allocate land to schools that are exempt from income tax, contrary to businesses. Moreover, granting a licence to a school means subjecting it to regular controls concerning the content and quality of its teaching, its administrative practice and financial management, its conditions of sanitation and security. To guard against this expense, the government of Jingniu district has imposed “management fees” on Caiyi School that it has recognised, while the law states that private schools must receive treatment from the authorities that is equal to that given to state schools. Moreover, the authorities are obliged to create the conditions necessary to enable migrant children to be schooled, in particular by supporting private initiatives 36. Many bureaucrats in the cities therefore continue to consider that they are not responsible for the compulsory education of non-residents and that they must be compensated, or even remunerated, for this service. Finally, there also exists an image problem that should not be ignored. These schools for migrants look dreadful and are perceived as a element of depreciation in the urban landscape.
24 All these reasons account for the fact that local governments are doing all they can to keep these schools illegal or have them become illegal. To this end they have recourse to means that not only fly in the face of legislation, but also devalue the image of the public authorities. Bashu School, awaiting legislation 25 Before beginning to enrol students, Bashu School made, as prescribed by legislation, a request for authorisation of the government of the administrative village of Yongfen and the Education Office of the government of Wuhou district under whose jurisdiction it falls, but has not received a positive response. We have been able to gain access to all the documentation of Bashu School that its founder and director, Mrs Xiao Hongtao, was kind enough to allow us to consult. We were able to see that the file setting out the request for authorisation was complete, stating the precise status and objectives, justifying the source of the initial capital outlay, and providing a contract for the rent of the land as well as a building plan, all in due form. A personal file was established for each teacher and administrative employee justifying their qualifications. The school clearly maintains its non-lucrative objectives, its statutes specifying that all profits will be reinvested for five years, at the end of which period only 20% will be distributed to the shareholders. Furthermore, the school has a board that works perfectly well, whereas the Sichuan Province Regulations for the Establishment of Schools by the Social Forces mention the existence of such a body as a possibility and not an obligation.
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26 Nonetheless, the school has two weaknesses with regard to the Sichuan Province Regulations for the Establishment of Non-Government Educational Institutions. The one concerns its equipment, the other the qualification of its teachers. Lacking are a laboratory for experiments, a library and a music room, although that does not in any way prevent music classes from being held. Moreover, only four teachers out of the ten that the school had at the time of its opening have accreditation, although all have at the very least completed the second year of teacher training college, as laid down in the legislation. As far as the first issue is concerned, none of the schools for migrant children that we visited, some of which have been officially recognised by the state (37), possess all the material required by the Regulations as the investment required is too great for this type of institution and the risk too important in case of a licence application being rejected. Moreover, we have already pointed out that this type of school has had quite some difficulty attracting fully qualified teachers. The six teachers without any accreditation either come from outside of Chengdu and, although having received accreditation in their place of origin, are not recognised by this municipality, or young teachers who have not yet finished the three to five years of practical training required before being able to sit the examination.
27 On August 15th 2002, Bashu received a notice from the Education Office in Wuhou district that, based on the school’s dossier, advised that the land, infrastructure and pedagogical material and quality of teachers did not meet the required standards and that it was therefore not authorising the school to open. It had to cease immediately all advertising and recruitment of students. This notice was followed, on September 3rd 2002, a few days after the start of classes, by a notice of administrative sanction from the Education Office of Wuhou district announcing the closing of the school and, on September 11th, by a decision of administrative sanction from the same office setting the school’s date of “eradication” at 30 days after receipt of the letter.
28 The notice of September 3rd cited article 45 of the Regulations of Sichuan Province for the Establishment of Schools by the Social Forces specifying that schools can only be shut down after a trial period of bringing them up to scratch granted by the authorities and stating that the various attempts at arbitration put in place by the administration had all failed. In terms of arbitration, both the administrative village and district governments sent representatives to stick up posters dazibao vilifying “the illegal school”. A campaign of defamation was orchestrated in the local popular press, denouncing the dilapidated state of the place, the incompetence of its teachers and administrators, and accusing its director of employing only family relations and having the lure of gain as his sole motivation 38. On several occasions, accompanied by considerable numbers of policemen, some bureaucrats went to Bashu to give teachers the order to resign and to tell parents to take their children out of the school in exchange for assistance in seeking employment. The main official in charge of education in the government of the administrative village of Fengxiang, whom the Bashu officials accuse of collusion with the state schools, even personally led a campaign within Bashu School itself, as in the marketplaces and fairs in the surrounding areas, to sing the praises of state schools coming under his administration, affirming that they would cost only 400 yuan a semester in fees for children leaving Bashu. On August 27th 2002, in the middle of a heat wave, the local officials cut off the school’s water and electricity supply, thereby causing several students and teachers to be affected by the heat.
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29 For its part, Bashu School tried on several occasions to argue its case to the administrative services but received the reply that it would not obtain any authorisation unless it lodged a significant financial surety in the bank (which it did), and then invest 40 million yuan to build a “school with standards”, that is to say able to compete with the splendour of “aristocratic” private schools from which local governments raise taxes more or less legally in the form of a percentage of the investment, “construction costs” and other “management fees”. According to Bashu School officials, the line that the authorities are taking is one that aims less to guarantee the rights of students and their families than to advance the personal enrichment of bureaucrats. Either a school has the means of getting the authorities interested in its profits and accordingly sees its lucrative objectives encouraged to the contempt of the law (39), or it cannot overcome the economic hurdles that are put in its way and “disappears of its own accord” (zisheng zimie) by going bankrupt. This is the case of Kaiming School in Chongqing, another school that specialises in taking in migrant children, and that had an initial investment of 90 million yuan imposed on it by the authorities. It contracted a loan of 80 million that it was not able to repay 40. According to this logic, the “schools for the poor” (pingmin xuexiao) always lose out alongside the “schools for the aristocrats” (guizu xuexiao).
30 Encouraged by the support and action of parents, Bashu School has carried on with its activities, but lives under the constant threat of being “eradicated”. This implies not only that the teaching that it offers has no recognised value, but also that the school cannot take the risk of investing to improve the quality of its infrastructure and teaching. Yangfan School, under threat of losing its status 31 The difficulties encountered by Zhou Yong’an in trying to get a licence for his school have been similar to those of Bashu School, although the outcome has been a happier one. Zhou Yong’an opened the doors of Yangfan School in January 2002, at the very time when his request for authorisation had just been rejected by the authorities of Chenghua district. In spite of the banning of his school, Zhou Yong’an did not close it and, six months later, obtained a licence thanks to the support of the parents, to the fact that he was able to come to some arrangement with local government bureaucrats and to the help of the local written press and television, which were also liberally compensated for their commitment in favour of the education of migrant children. All this was possible on account of the size of the school, which, in addition, was an instant success with the migrant families themselves. Clearly, smaller schools that have a less significant initial investment and receive fewer students—as is the case of Bashu, but also of two other schools in Chenghua district (41)—cannot spend as much money to gain state recognition.
32 The problem with the guarantee for this school is not, however, resolved yet, as the government of Chenghua has introduced an annual licence renewal process, despite the fact that national and provincial legislation states that this is only necessary when a school changes its objectives and the content of its teaching, or changes its location 42. The Criteria of the Province of Sichuan for the Establishment of Non-Government Educational Institutions stipulate that primary schools must provide an area of eight square metres per student. Enrolments have been so significant, however, since the school’s opening that the buildings have become largely inadequate. Zhou Yong’an therefore made a request to his district government to lease and build on land adjoining the school’s
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main site. The government refused this request, however, preferring to rent it out to a business paying taxes, despite both national and provincial laws stressing that schools have priority in the allocation of land 43. Zhou Yong’an was therefore forced to destroy some parts of the school, including the canteen, the majority of the teachers’ living quarters and the room for experiments in order to put up new classrooms. Children aged between six and seven are thus forced to leave the school at lunchtime to get food from street stalls. Moreover, this solution does nothing to fix the problem as the canteen and the room for experiments are themselves required for obtaining a licence. Since last January, Zhou Yong’an has received several visits from inspectors threatening him with the closure of his school. In the opinion of the school principals themselves whom we met, the strategy of the authorities thus consists in causing these schools to be in infringement of the law so as to prevent them from obtaining a licence or disallow its renewal. Strategies of resistance 33 Faced with the same arbitrary situation, Bashu and Yangfan have adopted two radically different strategies to protect themselves. One has resolutely chosen to put itself on the side of right and the law, while the other has exploited the dysfunction of the system.
34 A short time after receiving the first notice of closure of the school, Gan Bingxiang, who was co-founder of Bashu School with his wife, sent a “letter of complaint to the directors” addressed to the government of the administrative village, the Education Offices in the district, the municipality and the province, the Municipal Office of Laws and Regulations, as well as the People’s Assemblies of the municipality and the province, having recourse in the process to a practice that has been used in China since imperial times. Acting as his own advocate, the letter writer called on the higher leaders to “apply the law with severity and clarity, and maintain rights and equity” (mingjing gaoxuan, bingfa gongzheng), spelling out the objectives and conditions of his school, the steps taken to bring it into line and the difficulties encountered, and scrupulously cited all the articles of law on which his business was based. The letter ended with an appeal to save his school in the name of the right to an education for all and with a warning about the social consequences that are to be feared if this right is not respected. This letter was accompanied by another complaint, spontaneously written by the parents of the schoolchildren, in which they describe the discrimination their children face in state schools as well as their satisfaction with Bashu School 44. Following receipt of the decision to close the premises, the school also appealed to the Wuhou district People’s Tribunal. But the tribunal confirmed the earlier decision and set the closing date at January 1st 2003 45. In the meantime, the Education Office of the municipality of Chengdu had reacted to the complaint addressed to it by sending in a health inspection team which then declared that the school was abiding by the standards (46), while the Sichuan Province’s People’s Congress directly contacted the Wuhou government, calling upon it temporarily to not close down the school. It is, however, extremely risky for the upper ranks of the Administration to disavow those lower down, who are furthermore directly in charge of registering schools, and to overturn the decision of the People’s Tribunal of the district of Wuhou that gave a judicial seal of approval to an administrative decision. The Bashu School, bolstered by the findings of the health inspection, went again therefore to its district government that set a new condition for the granting of a licence: the production of a deed of title to the land. This condition does not figure in any law and for good reason, as in China virtually all land belongs to the state. It was not, however, formulated by chance, as the
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land rented by the school has been privatised and belongs to a rich businessman, yet the school remains, theoretically and very hypothetically, protected by the law that declares a long-term rental agreement to be sufficient 47.
35 If Bashu School, denouncing the absence of any public service perspective among the bureaucrats, decided to play the legal system against arbitrary decisions, Yangfan School has taken a contrary path. Firmly committed to opening a junior secondary school, a high school and then a university for migrant children, Zhou Yong’an has just rented two plots of land in the administrative village of Qinglong which falls under the jurisdiction of Wuhou district and officially anticipates constructing retirement houses on it. The authorities are much better disposed to this type of structure that is designed for city residents and subject to taxation. The first plot of land, of about one hectare, will house both a primary and a 7,500m2 junior secondary school. The work is already underway and the schools will open their doors in September. Zhou Yong’an hopes that the authorities, if they are interested in the undertaking, will not dare to destroy the schools once they become a fait accompli. This is far from being clear, however. The director of Yongfan, conscious of the dangers, and in an attempt to avoid the risks, has managed to set up a whole social network around his school and to find various kinds of support in the media (48), academic institutions and mass organisations, that he has been able to bring together thanks to his comments on the inequality of opportunity, the assistance given to migrant workers to settle in the city and the renewal of pedagogic methods. On March 29th Zhou Yong’an sealed a collaboration with the Group of Young Volunteers for Education from the University of Sichuan (49), who signed up to give free lessons in mathematics, Chinese, English, dance and music on weekends to any interested student. The inauguration ceremony was presided over by the officials from the Communist Youth League of Chengdu, the Committees of Young Volunteers of this league at the municipal and university level, and a representative of the Sichuan Academy of Social Sciences, who all spoke in front of Chengdu Television cameras and the educational channel of Sichuan Television in favour of the social commitment of Yangfan’s director. Zhou Yong’an was able to take advantage of the political climate introduced by the March 2002 session of the National People’s Congress (NPA), and subsequently confirmed at the Sixteenth Congress of the CCP last November, which came out in favour of the fight against social inequality. This was further reaffirmed at the Tenth NPC session in March 2003, when the delegates from the Communist Youth League denounced the inequality of treatment that the migrants are victim of, in particular in terms of education 50. Zhou Yong’an also skilfully turned the event into a patriotic ceremony, which opened with the national anthem and was held in the school’s playground with the flag of the PRC raised and a banner at the entrance celebrating the school’s obtaining of a licence. Through this piece of theatre, Zhou Yong’an was keen to show off his school’s legality as if to exorcise the precariousness of its status and bear witness to his good and loyal service towards the fatherland at the very same time as the development of his business was more and more prone to being interpreted as a sign of opposition to the government.
36 Since then, Zhou Yong’an has been hoping to be able to develop this co-operation, with which he is also trying to associate the Centre for Education and Training of the Sichuan Academy of Social Sciences, in three directions. Firstly, by setting up technical training programmes aimed at helping the students to become “little bosses”. Secondly, by proposing to parents of school children courses in general culture and professional development in order to help them better settle into life in the city; and thirdly, by
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improving the training of teachers in their respective disciplines, and introducing them to new pedagogical methods that are adapted to migrant children. These projects also have the goal of developing partnerships with official institutions under whose wing the school could be placed. In the interim, however, the Sichuan Academy of Social Sciences has refused to set itself up as an “umbrella institution” (guakao danwei) of the school, which, in exchange for a share in the latter’s capital, would have allowed Yangfan to come under the auspices of an official institution and so settle the matter of its status once and for all 51. The anomalies of the system 37 It is thought that there are about ten schools for migrant children in Chengdu. We know five of them, two of which have obtained a licence but one only—Caiyi xuexiao— seems to have had its status assured. The others, “neither eliminated nor recognised” (bu qudi ye bu chengren), find themselves in a precarious position. Local governments are hesitant about closing them, in so far as they have not yet come up with any viable solution to the situation of migrant children whose needs these schools are at least meeting. From a confidential document of the Chenghua district government to which we have had access (52), it is clear that the tactics of the authorities are to have all the migrant children attend state schools. For that they envisage increasing their capacity to accommodate these children by building annexes. However, nothing is said about the reasons why immigrant parents cannot or will not send their children to state-run schools: yet we have seen how the lower ranks of the Administration have had an interest in maintaining a discriminatory system. If local governments are nervous about closing these schools, it is also because they are running up against the hostility of the people concerned for whom these schools represent the only hope and who have already shown that they are prepared to take action in order to defend them. Finally, the governments in the administrative villages and the districts are in the wrong, something which the upper echelons of power are well aware of, as shown by the support given to Bashu School by the Education Office in the municipality of Chengdu and by the People’s Congress in Sichuan Province. If these schools are illegal, it is because local governments are refusing to grant them a licence, while the substandard material, teaching and management conditions that they highlight 53 in order not to authorise these schools are no more than the result of their own policies. The answer to the problem lies rather in regularising these schools and in introducing a system of control and support which would help them to improve their conditions, in accordance with the letter of the law.
38 In the meantime, migrant children are the first victims of the lack of public recognition of their schools. Their years of study in them have no certified value and they are routinely forced to interrupt their education following the closure of their school. The administration, management and quality of teaching in these schools are not subject to any control and their principals are not encouraged to invest so as to improve the situation. Indeed, in the total absence of any control over profits, the latter are sometimes grabbed by those in charge of the school, and multiple bankruptcies are occurring without the families being compensated or the children schooled elsewhere 54. The students are thus sometimes hostage to the ambition of principals in a context of growing and non-regulated competition. In Peking, in order to attract new clients, some schools for migrants have begun to put in place an expensive infrastructure and to implement new services the cost of which must be borne by the families, who do not always have any other alternative for educating their children. This “commodification”
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of education has already been denounced by Chinese researchers, in particular Han Jialing 55. In Chengdu, the ambition of Yangfan School is putting the children it is accommodating at risk through its illegal investments. But these schools can just as well turn out to be models of a republican school, as witnessed by the parents of children attending Bashu School. They point out that, contrary to students in state schools, their children are treated with respect and equality, whatever their background. They consider themselves to be very satisfied with their academic progress as well as with their acquisition of fundamental values. Struggling families are to benefit from preferential measures based on social criteria, and handicapped children receive special attention. Relations within the school itself are based on solidarity: the parents are very grateful to the teachers for taking some of their spare time to organise study groups and help those children who are having problems with their school work, staying with them until the parents have finished work or accompanying them back home when they cannot come to collect them. Bashu, like Yangfan, opens its doors on Saturdays and Sundays to offer a place of social interaction to children who are too often left to their own devices. Both of them organise regular meetings with parents to inform them of the school’s situation and pedagogical practice and to hear their proposals. This initiative is a clear break with the way in which they are received in state schools where they are neither listened to nor given any information. Yangfan even has its own publication, to which the teachers, students and parents contribute. Free of charge, it gives news of the school, information about the migrant population, in particular legislation concerning them, and offers a platform for supporting parents and students at the school. It has a print-run of 1,500 and the condition for the existence of this gazette is that it is not distributed outside the school. As the mobilisation of parents of children at Bashu shows, “the republican school” could well turn out to be “the school of democracy”, unless the authorities rush to regain control of it by regularising these schools.
39 Forces at work and future perspectives
40 While the question of accommodating migrant children was not raised until the latter part of the 1980s, Chinese intellectuals have gradually, since then, become involved in favour of the universal right to education. Researchers, some of whom belong to government think-tanks, have, over the past few years, being publishing detailed reports submitted directly to the government. We have already cited Han Jialing of the Institute of Sociology of the Chinese Academy of Social Sciences (CASS), to whom we could add Wang Chunguang, also from the CASS, as well as Cui Chuanyi and Zhou Shukai of the State Council’s Research Centre for Development 56. Journalists are also playing an important role in the development of thinking and public opinion, from He Nanying’s outcry of protest in 1996 denouncing the emergence of a “new generation of illiterates” 57 to the recent report by the Nanfang Zhoumo 58 on the “cleansing” of 16 schools in the Peking district of Fengtai last February. This gathering momentum is having a certain impact on the central government. In May 2001, the State Council published a Decision on the Reform and the Development of Basic Education 59 that mentioned the need to take account of the education of migrant children by making their acceptance in public schools a priority. Last January, the Ruling on Successfully Managing the Employment of Rural Farm Workers in the Cities and their Access to Public Services 60 carried a clause stipulating “that the right to compulsory education for the children of migrant workers must be guaranteed”. Local governments are required to take steps so that these children can enjoy the same teaching conditions in state schools as city
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residents do and to support any “substandard schools” by bringing them into the development plans for education and helping them to improve their material and pedagogical conditions instead of eliminating them. Finally, urban governments are required to devote a part of their budget to the education of these children.
41 However, these signs of goodwill often still remain a dead letter in the absence of any detailed and compelling legislation. Thus, the Peking district of Fengtai, which was chosen by the municipal authorities on two occasions, in 1996 and 1998, as a pilot site for testing the national legislation concerning schools for migrants, not only has not contributed to improving conditions in these schools, but has even organised two “cleansing” campaigns, the first of which, in 2001, allowed the “eradication” of 50 schools 61. The opposition between the central and local authorities is clear. The former are happy just to devise general principles, leaving to the latter the task of elaborating the corresponding legislation and bearing the costs of it.
42 Since March 2002, however, the beginning of a consensus seems to be emerging over the fact that it is better to prevent a social evil than to cure it. It is this spirit that prevailed at the 16th Congress of the Chinese Communist Party (CCP) last November, whereas the Fifteenth Congress in 1997 had as it were proclaimed the need for a two- geared society for speeding up the economic development of the countryside. With the deepening of the social crisis, the CCP became conscious that the increase in the rate of growth was no longer enough to ensure its legitimacy, so it came to set itself the objective of creating a more egalitarian society of relative prosperity, the latter understood as being more evenly shared. In this context, resolutely reformist voices were heard within the Party and the state, and some initiatives sprang up. Last March, the first session of the Tenth National People’s Congress gave a platform to these reformers. We have already mentioned the firm line taken by the Communist Youth League in favour of equality of rights for migrants, in particular concerning education. A group of representatives warned against “the social sickness” which is on the verge of developing if the situation of migrant workers does not receive greater attention. Citing the rising figures of delinquency, one representative commented on them as follows: “respect for society supposes that society respects the dignity of the person” 62. This point of view is also shared by local executive bodies, as attested by the initiative of Xiamen municipality which, in August 2002, published legislation allowing the regularisation of 34 private schools for migrants and creating a special office responsible for financing, controlling and giving direction to them. The boldness of this initiative should, however, be put in a relative context. Nearly half of the population of Xiamen is not originally from the city and the authorities are conscious that its 30,000 migrant children represent the future of the Special Economic Zone 63.
43 Power is thus divided according to divergent interests and points of view, and there is no doubt that this will favour change. The relations between the different rungs of the Administration in Sichuan Province is particularly interesting and creates more favourable prospects for development than in some large cities in eastern China. Indeed, how can one explain that, until now, no campaign for eradicating schools for migrant children has been conducted in Chengdu, whereas such campaigns are regularly organised in cities like Peking, Shanghai and even Shenzhen? We must no doubt see in this the particular character of this city with respect to municipalities under direct administration or the Special Economic Zones in the eastern part of China. On the one hand, Chengdu is facing a massive rural exodus, essentially from the
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province of which it is the capital, contrary to the major eastern cities that are taking in migrants, from the whole of the country, despite having much more tenuous identity and cultural links with them and without having any direct administrative obligation towards them. On the other hand, the capital of Sichuan is a part of the network of urban centres that form the backbone of the policy of development in the west introduced in the summer of 1999 and which are consequently called on to develop, whereas the cities in the east, which have already reached a certain level of development, are on the contrary trying to reduce immigration, thanks to much more radical control measures and selection policies based on socio-economic criteria. Thus, the willingness of the Centre to give assistance and support to disadvantaged social groups runs up against the concerns of the Sichuan People’s Congress, which is supposed to represent the whole of the provincial population. The latter has not only given its support to Bashu School, but last November also made proposals for establishing schools that could accommodate migrant children, providing the Provincial Education Office with a fund of two million yuan to set up a special programme for the compulsory schooling of these children and forcing the municipal bodies in charge of finance and education to create public schools to receive migrants 64. The municipality of Chengdu seems somewhat more hesitant and divided. For one thing, it has obtained permission from the Sichuan People’s Congress for exemption from the provincial reform of the hukou, enabling migrants having a fixed income and housing to become urban citizens 65. Secondly, control of migrants there is less strict than in the major cities of the east 66 and the mayor has given his symbolic support to the director of Yangfan who had come to seek his help by stating that Chengdu had to create its own model for finding a place in school for migrant children (67), while the Education Office has given its support to Bashu. However, the municipal government has still not published any legislation concerning the schools for migrant children, which leaves a doubt hanging over its position, between support and repression, something that the government of Chenghua district is complaining about, asking it to strengthen its means of eradicating these schools 68. Finally, the governments of the administrative villages and districts remain, essentially for economic reasons, refractory to the lifting of barriers that are standing in the way of equal rights for migrants and urban residents alike. While the latter may retain their full powers as far as the authorisation of schools goes, their power of repression is limited by national legislation, the position of the Provincial Congress and the ambivalence of the municipal government which refuses to align itself to their position, yet without granting the funds needed to resolve these contradictions. The question now is to know if the policy of developing the west will result in a demographic rebalance between rural residents and those in the city so that, in the fashion of Xiamen, the municipality of Chengdu can combine its interests with those of the immigrant workers.
44 China has been undertaking economic reforms for nearly a quarter-century now, but during this time it has not questioned a system of residency that has on the contrary been reinforced by the policies of decentralisation, thereby counteracting the apparently universal import of legislation in the area of education. In a general way, people who come—directly or through family ties—from the countryside remain second-class citizens. The mediocrity of the education system in rural areas and the hurdles placed in the way of the schooling of children in urban areas are depriving them of equal opportunities with urban residents. In town, the practice of the authorities remains largely discriminatory and the label “migrant” persists as a stigma
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with a very good chance of being passed on to future generations. The Chinese state continues to put up obstacles to the recognition of schools for migrants. Yet, at the same time, it has been able to guarantee the existence of a private educational sector for city residents, which reveals a lot about the contradictions and failures of the system. Until now, the government has had individuals bear the brunt of the cost of the disparity between economic reforms and political reforms, but over the past year or so there have been signs of a new awareness within the ruling elite. The cost paid by individuals ends up being borne by the country as a whole, and the Party risks being its first debtor. The developing consciousness of the attendant risks thus lets one hope that special attention will be given to the right to an education for all, which is the pillar of the regime's intangible principles of social stability and economic development.
NOTES
1.Eric Florence, “Les migrations en Chine et leurs implications sur le plan urbain” [“Migrations in China and their Urban Implications”], Hommes et migrations, No. 1220, July-August 1999, p. 117. 2.“Hope for Children of the Floating Population to Attend School”, translation from China Education Daily, June 7th 1996. 3.Shutting Out the Poorest: Discrimination Against the Most Disadvantaged Migrant Children In City Schools, Report, May 2002, available at the website: www.hrichina.org. 4.Survey conducted in January 2003 in co-operation with the company Nanguang zhifang for the Programme of Support for Migrant Workers in Chengdu under the direction of the Federation of Women of Sichuan Province and the Sichuan Academy of Social Science in co-operation with UNESCO. 5.According to official figures, that are in fact known, in order to present the education situation in the countryside in a favourable light, the relation between rural and urban zones concerning state expenditure in the field of education would be of the order of 1:1.66 for primary schools and 1:1.67 for junior secondary; Human Rights in China, Institutionalized Exclusion: The Tenuous Legal Status of Internal Migrants in China’s Major Cities, Report, November 2002, p. 15, available at the website: www.hrichina.org. 6.These are institutionalised and generalised nationally by the Regulations concerning the Registering of Households in the People’s Republic of China, voted by the Permanent Committee of the National People’s Congress, January 9th 1958. 7.Guarantee of a job for life with the accompanying perks of a flat and the provision of food and basic consumer items. 8.Guojia zhuxi ling 38 hao, Zhonghua renmin gongheguo yiwu jiaoyufa (Decree No. 38 of the President of the PRC, ratified by the NPA on July 1st 1986); all the bills that we cite may be consulted in Chinese at the website for official legal information: www.law.com.cn. 9.Quanguo renda, Zhonghua renmin gongheguo jiaoyufa. 10.Guojia jiaowei, gonganbu, Liudong ertong shaonian jiuxue zanxing banfa. They had been preceded in 1996 by the Trial Measures for the Education in Cities and Townships of the
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Children and Adolescents of the Migrant Community, published by the State Commission for Education, which designated a few pilot sites in some of the major cities where these measures were to be “trialed”. The 1998 Measures have been extended to the whole of the country. 11.“Dagongzhe zinü, yao jin xuexiao you duo nan” (How difficult it is to gain admission to a school for the children of migrants), Sichuan ribao (Sichuan Daily), September 11th 2002; Human Rights in China, Shutting Out the Poorest…, op. cit., p. 12. 12.“Yiwu jiaoyu xuexiao shoufei guanli zanxing banfa” (Temporary Measures Concerning the Management and Raising of Compulsory Fees by Schools). 13.Sichuan ribao, September 11th 2002. 14.Interview with parents, January 22nd 2003. 15.Jasper Becker, “Forget About Hotels and Roads, Spend the Money on Children’s Education, Say Deputies”, South China Morning Post, March 15th 1999. 16.HRIC, Institutionalized Exclusion, op. cit., p. 21. 17.Guowuyuan jiufengban, Jiaoyubu guanyu jin yi bu zuohao zhili jiaoyu luan shoufei gongzuo de yijian, (Proposal of the Bureau for the Correction of the Style of Work of the State Council and the Ministry of Education on how to settle the question of the arbitrary levying of school fees), published on June 12th 2001. 18.Chengdu wanbao (Chengdu Evening Post), February 17th 2003 and March 25th 2003. 19.Chengdu wanbao, April 10th and 16th 2003. 20.Interviews with parents of students at the school, Bashu, Chengdu, January 22nd 2003. 21.According to the figures of the municipal government of Peking, the city’s public schools had a surplus of 300 places, HRIC, Shutting Out…, op. cit., p. 4. 22.Interviews with parents of children at Bashu School, January 22nd 2003. 23.Idem. 24.Interview with Li Shumei, founder of Xingzhi School, in Han Jialing, “Beijingshi liudong ertong yiwu jiaoyu zhuangkuang diaocha baogao” (Research report on the situation of migrant children of compulsory school age in the municipality of Peking), Qingnian yanjiu, No. 8, 2001, p. 74. See also Astrid Fossier, Les enfants issus des populations flottantes, quelle scolarisation ?, [What schooling for children from a floating population?], Masters thesis in Chinese, University of, Paris 7, September 2002. 25.Han Jialing, op. cit., p. 75. 26.HRIC, Institutionalized Exclusion, op. cit., pp. 29-32 and Han Jialing, op. cit., pp. 76-77. 27.Guo Fugeng and Gao Yu, “The Difficulty Migrant Children Have in Enrolling in School Cannot Be Ignored”, translation from Guangming Daily, March 25th 1997. 28.Han Jialing, op. cit., p. 72. 29.Idem, p. 77. 30.Liu Wei, “ Liudong renkou zinü dao nar qu dushu ? ” (Where can children from a floating population go to study?], Zhongguo jiayu bao (China Education News), May 24th 1998. 31.Guowuyuan, Shehui liliang banxue tiaoli. 32.Quanguo renmin daibiao dahui changwu weiyuanhui, Zhonghua renmin gongheguo minban jiaoyu cujinfa. 33.These surveys, from which the following information is derived, were carried out between January and April 2003. 34.Sichuan sheng minban jiaoyu jigou fenlei shezhi biaozhun.
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35.Shehui liliang banxue (youeryuan) banshi chengxu, published, as far as Wuhou district is concerned, on March 26th 2002. 36.State Council Regulations for the Establishment of Schools by the Social Forces (arts. 45 and 46), Sichuan Province Regulations for the Establishment of Schools by the Social Forces (art. 39), Temporary Measures for the Schooling of Children and Adolescents of the Migrant Population (arts. 4 and 9). 37.This is the case for example of Yangfan, but also of Caiyi and Zhengxing Schools, which are both located in Jingniu district. 38.Complaint made to the top officials of Bashu School. As an example of this, the document quotes some passages from the article: “[…] in the middle of one of the classrooms, a wooden pole on the ceiling supports a swinging beam on the point of collapse, and all the walls have cracks in them”; “Xiao Hongtao, the school’s principal, is possessed by a frantic desire to get rich, […] all the teachers at the school are either close or distant relatives, none of whom have any accreditation”. 39.The Regulations for the Establishment of Schools by the Social Forces of the State Council and Sichuan Province, as well as the 1995 Law on Education in the PRC, stipulate that any non-government educational institution has a public service mission to fulfil and must consequently demonstrate that it has clearly non-lucrative objectives. 40.Interview with Gan Bingxiang, co-founder with his wife of Bashu School and close associate of the founder of Kaiming School, February 22nd 2003. 41.Jinbei School which has 210 students and Yuran School which has 120. 42.Regulations of the State Council for the Establishment of Schools by the Social Forces (art. 39), Regulations of Sichuan Province for the Establishment of Schools by the Social Forces (art. 32). 43.Idem art. 47 and art. 40. 44.Zui jinji de huyu, zui qianglie de yaoqiu (A most urgent call, a most insistent request). 45.Chengdu shi Wuhou qu renmin fayuan gonggao (Declaration by the Wuhou District People’s Tribunal), December 17th 2002. 46.Chengdu shi fangwu anquan jianding bangongshi wenjian (Document from the Department for evaluating the security of buildings in the municipality of Chengdu), December 24th 2002. 47.1998 Measures. 48.Several articles devoted to this school appeared in the local press, for example: “Nongmingong zidi xuexiao zhuang zheng le” (A school for the children of migrants has just got a licence), Chengdu shangbao (Chengdu’s newspaper for trade and commerce), July 2nd 2002 and “Shen chu guan’ai de shou” (Holding out a kind hand), Chengdu wanbao, January 3rd 2003. The television broadcast Xianchang (In situ), sponsored by China Telecom, also had a report on it. 49.This group of volunteers, formed in 1997, which brings together about 4,000 students from the University of Sichuan, mostly members of the Communist Youth League, is involved in pedagogical and social work aimed at several groups (young criminals, elderly people, children of poor rural farm workers, etc.) in exchange for which the students get “bonuses” that will enable them to obtain help from the Party and society in case of need; interviews with members of this group, late January 2003. 50.“Youths Criticise Migrant’s Treatment”, South China Morning Post, March 5th 2003. 51.This practice developed in China in the 1980s to enable organisations, that had been formed independently, to acquire a legal status. In particular this was the case for editorial committees that registered with official publishing houses and thus came
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under the responsibility of their Party committee while still functioning, in practice, in a relatively autonomous manner. See Jean-Philippe Béja, “ Regards sur les ‘salons’ chinois ” [A look at Chinese ‘salons’], Revue française de sciences politiques, February 1992; Chen Yan, L’Eveil de la Chine, [China’s Awakening] L’Aube, collection Essai, 2002, pp. 88-89 ; and Chen Fong-Chin and Jin Guantao, From Youthful Manuscripts to River Elegy, Hong Kong, The Chinese University Press, 1997. 52.Guanyu jiejue wo qu liudong renkou zinü ruxue ji xiangguan wenti de qingkuang baogao (Report on the schooling of children from the migrant population and other related issues in our district). 53.Idem. 54.HRIC, Shooting out …, op. cit., p. 17 ; Han Jialing, op. cit., pp. 75-76. 55.Researcher in the Institute of Sociology at the Chinese Academy of Social Sciences, op. cit. 56.These reports, for internal use, are not often released, but one can read snippets about them in the press; see, for example, “Concerns About the Education of Second Generation Migrants”, translation from China Youth News, October 11th 2001, “China Makes Schooling for Migrant Children Easier”, China People Daily, October 7th 2002, “Mingong zinü ruxue tixian shehui gongzhen” (The schooling of migrant children is the embodiment of social equity), Nanfang Zhoumo (The Weekend of the South), April 10th 2003. See also Zhao Shukai, Conflict and Government Change About Management of the Floating Population, published at www.wiapp.org and Cui Chuanyi, “Pochu dui nongmingong jiuxue qishi” (Eliminating educational discrimination against migrant children), Jingji cankaobao (Economic review), April 18th 2002. 57.He Nanying, “The Phenomenon of ‘Little Urban Illiterates’ Makes People Worry”, translation from China Women’s News, December 20th 1996. 58.Nanfang Zhoumo, April 10th 2003. 59.Guowuyuan guanyu jichu jiaoyu gaige yu fazhan de jueding. 60.Guowuyuan bangongtong tongzhi, Zuohao nongmin jingcheng wugong jiuye guanli he fuwu gongzuo, January 16th 2003. 61.HRIC, Shutting out…, op. cit., pp. 4 and 12. 62.Chengdu wanbao (Chengdu Evening News), March 16th 2003. 63.Nanfang zhoumo, April 10th 2003. 64.Sichuan ribao (Sichuan daily), November 29th 2003 and Tianfu zaobao (Tianfu Morning Paper), December 9th 2002. 65.Idem. 66.The results of our study confirm the analysis presented by Anita Chan in “‘A Race to the Bottom’: Globalisation and China’s labour standards”, China Perspectives, No. 46, March-April 2003, pp. 41-49. 67.Interview with Zhou Yong’an, January 19th 2003. 68.See note No. 52.
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The Crucial Role of Local Governments in Setting up a Social Safety Net.
Ding Kaijie
1 Since launching its economic reforms and open-door policy, China has entered a phase of social transition that has given rise to many social problems. The establishment of a solid safety net by Chinese local governments is therefore a key component in maintaining social stability and essential for ensuring local economic growth.
2 In China, the “social safety net” (shehui anquan wang) refers in the main and in general to the social security system formed by all levels of government as a coherent governing body. Because the context of this social safety net is vast, it has as yet no rigorous construct in law and has not been the subject of policy-making or regulation. The conception of a “social security network” is certainly one part of the social safety net, with some scholars describing the social security system as a “social security network”. The purpose of the net is to protect disadvantaged groups—the poor, women, children, the unemployed, the disabled, the aged, etc.
3 Local governments usually play an important role in the establishment of a social safety net, and this is a topic that is definitely worthy of discussion. The term “local government” covers a comprehensive variety of ideas, however, and the composition of local governments differs according to the level of administrative governance. In this article, we argue that “local government” is a conception relative to the central government, the remit of which stretches from provincial to township levels. Anxiety during the transition 4 In its “Human development report: China” published in 1999, the United Nations pointed out that while China’s market-oriented reforms and rapid economic growth had resolved some problems, they had also posed a variety of challenges. Among the most prominent of the social issues reported were “the growth of unemployment”, “some people living in difficulties”, “a number of poor people”, “the growing proportion of ageing people”, “unfavourable income redistribution”, etc. Faced with
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this situation, the previous social insurance system has disintegrated, but a new, solid social security system has yet to come into being. Chinese local governments are thus located in what can be termed a “risk society”, namely a transition society with many social problems.
5 In the following, we discuss six main social problems faced by local governments in this context. A marked income distribution problem is emerging 6 According to the Gini coefficient, a generally accepted international estimation measure, gaps between social incomes are widening1. As economic growth has accelerated, differences in income have expanded sharply, especially from region to region, with income levels gradually decreasing as we move across the country from east to west2. Research by Li Peilin and Zhang Yi of the Chinese Academy of Social Sciences (CASS) shows that 20% of households with the highest income accounted for 38.1% of the whole income of city and township populations in 1990, with this percentage rising to 43.5% in 1993 and 52.3% in 19983. So the phenomenon of the Matthew effect4 induced by the differentiation of poor and rich is becoming increasingly marked, and relative deprivation has already occurred.
The burden coefficient of aged people in China, 1997
Source: Wang Guojun, « Dui Zhongguo nongcun shehui baoxian tizhi de juxian jiqi gaige de sikao », (The Limitations of the Resident Rural Social Insurance System and Considerations of the Reform), Shanghai shehui kexue yanjiikan (The Quarterly Journal of Shanghai Academy of Social Sciences), n°1, 2000.
Poverty remains a serious problem in some areas
7 In 1993, the central government launched a project called the “‘eight-seven’ poverty alleviation reinforcement plan” (which aimed to solve the poverty
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problem of 80 million residents in the whole country within 7 years from 1993 to 2000). After eight years, China had achieved some good results, but the prospective goals have still not been completely fulfilled. According to a lower evaluation standard, there were still thirty million “poor” people in rural China in 2000. Moreover, with the deepening reform of the state-owned enterprises (SOEs), poverty among urban residents has become very serious. There are two trends embodied in the urban poverty situation: the ratio of the population living in poverty is increasing, while the degree of poverty is worsening every year5. The number of poor people in urban China stood at 19.63 million in September 20026. An ageing society 8 In 1999, elderly people accounted for 10.1% of the total population, which meant that China had become an ageing society. Moreover, China’s aged population will enter a period of high growth in the next thirty years. With the explosion of this population, a more solid social safety net is essential. Furthermore, it is important that China’s local governments pay more attention to differences between the degree of ageing across the regions (Table 1). A difference also exists between the ageing degrees in urban China and rural China (Table 1). According to one study, the average year in which the 30 provinces (Chongqing is not included) will become part of the ageing society is 2005, and the standard error is 9.36 years. The largest gap between provinces is 36 years7. Increasing marginal groups: a massive floating labour force 9 Since 1978, as a result of the development of non-agricultural industry, the townships and the market, there has been a massive migration of surplus labour from rural areas. According to scholars from different disciplines, the number of unemployed in rural areas has reached at least 200 million. On average, eight million people from rural China entered “township and village enterprises” (xiangzhen qiye) and other non-agricultural activities from 1978 to 1988, while about 10 million people flowed into the towns. Moreover, several million peasants will continue to pour into the cities in the coming years. Importantly, this movement has induced social stratification among people from rural areas, while control has been lost of the social security system in rural China, with great quantities of rural labour in urban China lacking appropriate security. Many among this labour force in urban China have gradually formed marginal groups, called “outliers” (bianyuan qunti), which means that they cannot enjoy citizenship rights in the towns8. With the increase of the frequency of natural disasters, a new relief system is needed 10 China’s social and economic development has frequently been interrupted by natural disasters, which also increase social risk. In the view of the World Bank, this will have a damaging effect on the poor in the short term and reduce opportunities to eliminate poverty in the long term. Since 1949, the frequency of natural disasters has increased in China; the affected areas are numerous, and economic losses resulting from the catastrophes are also mushrooming. According to Wang Shaoguang and Hu Angang, 49.24 million hectares of land were affected by natural disasters during the period 1990-1997, with 25 million hectares at the heart of these disasters9. In 1998, the devastating flooding of the Yangtze and Songhua rivers caused major losses for the people there. For a long time, China’s traditional disaster relief system featured three characteristics: 1) it depended purely on the central budget finance system; 2) it was based on the collective economy in rural China; and 3) there was no policy for the
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distribution of relief payouts. At present the traditional system is no longer financed from the tongshoutongzhi financial system at the state level, while risk security is not provided adequately by the collective ownership system in rural China. On the whole, a new feasible compensation system is required for victims of disasters. How to prevent, reduce or handle the aftermath of natural disasters has been a major objective of local governments. Participating in the globalization of the economy and facing international social risks 11 With its entry into the World Trade Organisation (WTO), China has become a participant in social and economic activity on a global scale. While gaining benefits from this move, China will also face more risks from international society. On the one hand, the peasants will face international competition, and their exposure to market risk will intensify. How to provide a social safety net is a major challenge here. On the other hand, by joining the WTO, China has become an active participant in the flow of human resources and in the division of labour on a global scale. If a system of social security cannot be set up beyond its work units, China’s enterprises will be at a competitive disadvantage in relation to their foreign counterparts. Habermas has repeatedly pointed out that the globalisation of an economy affects the sovereign country in ways that will affect the protection of its citizens. How to use the social safety net in economic construction is clearly one key in local government policies for further reform and development. The reform and innovation of local governments 12 Social and economic transition has transformed the primary role of government from pure administration to the provision of services. Facing the social problems mentioned above, local governments have been making great efforts to establish and improve the social safety net, especially in the cities. The social security system currently features a basic framework, which includes social relief, social assistance, social welfare, social insurance, and the care of veterans and their families (youfu anzhi). Improvements in three of these areas, including basic unemployment welfare, has been the emphasis of local governments since 1990. From “work unit welfare” to “the last safety net”: the minimum living standard scheme 13 “One experience can be concluded from China’s reform practices since the 1980s: successful reform measures tend to originate at the local level”10. A key element of China’s social relief system, the “minimum living standard scheme” (zuidi shenghuo baozhang) was set up first in Shanghai in 1993, then later in Xiamen, Qingdao, Dalian, Fuzhou, Guangzhou and Wuxi. These six cities implemented this scheme within the space of about two years, and by 1996 six had become 206. Since September 1997, the minimum living standard scheme in urban China has been extended and enjoyed popularity at a time when the creation and extension of systems was a feature of the organisational behaviour of the national Ministry of Civil affairs (MCA)11. Poverty alleviation in urban China was transformed from a moral behaviour to an institutional behaviour.
14 Based on this, the State Council issued the “Notification concerning the setting-up of a minimum living standard scheme all over the country”, in September 1999, which largely promoted the setting-up of organisational systems in another 400 cities. Since then, the minimum living standard scheme in urban areas has entered a phase of management by laws and institutions. By 1999, 2,036 cities and townships had set up
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the system, including four cities directly under the jurisdiction of the central government (zhixiashi), 227 cities at the provincial level (dijishi), 437 cities at the county level (xianjishi) as well as 1,638 townships (zhen).
15 Currently, most cities and towns have implemented the scheme. By the first half of 1997, a minimum living standard scheme for rural residents had been set up in 1,660 (67%) cities, counties and districts to the benefit of more than 3.06 million rural residents, a figure that accounted for 0.36% of the rural population, and by the first half of 1999 the funds invested in these schemes amounted to 366 million yuan. In 2000, the minimum living standard scheme for rural residents made progress: its coverage was expanded and the number of poor people enjoying its benefits reached 3.192 million. The minimum living standard scheme has thus played a positive role in maintaining the social stability of rural China and become a “variation reducing mechanism”12.
16 Some studies show that local governments share the same views on the objective of the minimum living standard scheme and the problems that need to be resolved, but that they diverge when it comes to the concrete framework and implementation methods. Some well-known models include those in Shanghai, Wuhan and Chongqing13. In the primary phase, each province, district and municipality generally issued notifications of institutional construction for the scheme. In September 1997, local governments started issuing notifications on the progressive institutional construction of and improvements to the scheme. The municipality of Shanghai and the province of Guangdong issued comprehensive laws and regulations on social relief and social assistance: the Shanghai Social Assistance Measures were issued by the Shanghai municipal government, and the Guangdong Social Assistance Ordinance was promulgated by the Guangdong People’s Congress14.
17 Furthermore, local governments have actively conducted surveys of their areas and have reported good feedback on the local management of the minimum living standard scheme in urban areas. Some local governments have set up top-down social assistance networks and institutional comprehensive assistance models, including social assistance centres in districts and counties, social assistance bureaux at the street level, and the appointment of social assistance co-ordinators on residents committees, and so on. For example, the municipality of Shanghai and the province of Guangdong formed a common way to construct a comprehensive assistance model based on the fundamental needs of the people enjoying the security and on the current financial capacity of governments, and which emphasises the realisation of the siweiyiti (people’s livelihood, medical services, education and housing assistance).
18 By active investigation and improvement, Chinese local governments have gradually set up a management system characterised as “governing by governments, under the responsibility of the civil affairs sectors, collaboration between sectors, implementation at the local grassroots level”, and formed an operating system characterised by legitimatisation, socialisation and information15. A basic framework for an unemployment insurance system 19 In the initial stages of the economic reforms, the central government issued the “Guidelines for the relief of unemployed workers” and the “Temporary measures for the relief of unemployed workers”. China’s unemployment insurance system only really began in 1986 when the State Council issued the “Temporary regulations on unemployment insurance for employees from state-owned enterprises”. After 1990,
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with the establishment and improvement of the market economy system, competition between enterprises intensified, and bankruptcies and job losses (xiagang) followed. In order to solve the problem of fundamental livelihood security for the unemployed population, the State Council issued the “Regulations on unemployment insurance for the employees of SOEs” in 1993. Since then, with the further development of the reform of the SOEs, ideas have gradually changed, and China has accelerated its reform of the unemployment insurance system.
20 In accordance with central government policy, local governments adjusted the allocation of a part of their funds to ensure fundamental livelihood security for unemployed workers and to provide social insurance. One example of this is the structural adjustments carried out by the municipality of Shanghai in the textile industry. With lay-offs creating the potential for millions of people to become unemployed, the local government amended a number of regulations and measures and in 1995 issued its “Unemployment insurance measures”, which adjusted the rising proportion of unemployment insurance fees and regulated the provision standards of its unemployment insurance fund. By 1997, more than 20,000 work units were participating in unemployment insurance schemes, covering more than four million employees, or 92% of all employees. Another example is provided by Shenzhen, with its new status as a city, where unemployment mainly affects registered permanent residents. As a solution, the Shenzhen government took the following measures: 1) expanded employment opportunities; 2) promoted multiple industries and multiple positions; 3) extended its re-employment project; and 4) changed conceptions of employment and encouraged people to participate in employment training and look for employment opportunities16.
21 In May 1998, the central government increased the fundamental livelihood security of xiagang workers, unemployment insurance, pension insurance, and the minimum living standard scheme. In January 1999, the State Council revised its 1993 “Regulations on the unemployment insurance for the employees of SOEs” and issued the “Regulations on unemployment insurance”. This proved the watershed in the establishment of the basic framework of China’s unemployment insurance system. It is noticeable that some local governments are expanding the scope of unemployment insurance according to the needs of local reforms and circumstances. Beyond the SOEs, some local governments have provided unemployment insurance for employees of collective enterprises of cities and towns, enterprises invested in by foreign entities, private enterprises, administrative organisations and institutions, and social groups.
22 On the basis of the innovations in unemployment insurance reform introduced by local governments, the central government, in an advisory note of the Central Committee of the Chinese Communist Party related to the Tenth Five-Year Plan for the National Economy and Social Development, commented on the “further improvement of unemployment insurance, and the input into the fundamental living security of laid-off workers from SOEs into unemployment insurance on the basis of trials”. Since 2001, SOEs have begun to abolish the service centres for the re-employment of laid-off workers, and the fundamental living security of laid-off workers (xiagang zhigong) has been amalgamated with unemployment insurance, which means that the original three security lines have now become two. In 2001, laid-off workers from seven coastal provinces with developed economies started receiving unemployment insurance. They exceeded the number of laid-off workers entering re-employment centres, and the re-
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employment rate of laid-off workers began to drop. In order to promote employment, some provincial governments, including those of Liaoning, Heilongjiang and Jiangxi, have issued related policies and measures to add employment to the check-list of government goals.
23 Furthermore, in Shanghai, Beijing and Jiangsu, shared and part-time or temporary jobs have been developed in order to help disadvantaged groups find jobs in the market system. For instance, the “4050” project in Shanghai aims to help women over forty and men over fifty find re-employment. Recently, the local government in Kunming has taken effective measures to solve re-employment problems among laid-off workers, paying 3.88 million yuan to provide employment positions useful to public interests for xiagang workers. In the future, the local government will do what it can to create about 10,000 valid employment positions and take some measures to reassign more than 7,000 laid-off workers.
The level of social security in 1996
Source: Zhu Qingfang et. al., Shehui baozhang zhibiao tixi (Social Security Index System), Zhongguo shehui kexue chubanshe, 2001.
Facing the ageing problem actively: pension insurance and other measures
24 Before 1984, Chinese urban pension insurance fell within the framework of the traditional annuity system. In 1984, the crisis enveloping the continuation of this annuity system in some SOEs led the central government to set up a social pooling (shehui tongchou) mechanism to balance the shift in this burden between old and new enterprises. It was in this year that the central government carried out trials in the social pooling of pensions for laid-off workers in five cities and counties in the provinces of Guangdong, Sichuan, Jiangsu and Liaoning. Social pooling was then extended and implemented nationwide. Following further reforms, in 1991 the State Council issued the “Decision on the reform of the pension insurance system for
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enterprise employees”. The scope of pensions began to expand, and funds also began to increase. By means of administrative and legal measures, local governments are ensuring that enterprises turn in pension funds adequately and in time.
25 In 1993, with the encouragement of the central government, local governments developed trial areas so that the payment capacity of the traditional annuity system could be improved, while a framework for the management of social insurance was set up. In view of the facts that the management costs of the employee pension insurance system were too high, that there was a trend towards competition between districts and sectors, and that pension funds were being diverted or misused, the State Council issued its “Notification on further reform of the pension insurance system for enterprise employees” on 1 March 1995. At the same time, it implemented two sets of optional projects for local governments. In the end, local governments devised local interest projects and amended the control rights for surplus pension funds in the short term. Chaos soon reigned. Almost every district had its own project, with the result that pension standards increased in competition with each other among local governments. This caused management and adjustment problems for the central government and made it difficult for employees to change regions.
26 To establish its authority over the planning of the pension funds and welfare resources, the central government issued the “Decision on the establishment of a united basic pension insurance system for enterprise employees”, and thus conceived a mixed pension insurance system that combined social pooling and individual accounts: the partial funding system. In August 1998, the State Council issued its “Notification on relative problems in the transfer of social pooling of basic pension insurance for enterprise employees at the provincial level and trade pooling (hangye tongchou) to local management”, which further strengthened the dominant role of the central government in the social security system management mechanism. Since then, the pension insurance system has undergone continuous improvement. In 2000, to modify the combination of social pooling and individual accounts, establish individual accounts that operated using real accounts, and maintain the charging standard of enterprises without increasing the burden on or decreasing the pension level of retired employees, the State Council issued its “trial areas project for the improvement of the social security system in urban China”. In 2001, the trials began throughout Liaoning and in one city in the other provinces.
27 In facing up to the problem of an ageing population, local governments have gained useful experience and implemented measures, among other things to advocate respect for the aged and their rights as well as community help for the aged. The most serious population ageing rate in China can be found in Shanghai, where the government has undertaken numerous initiatives over a number of years to overcome problems of security for the elderly. It has actively promoted the construction of communities where the elderly can obtain services and good health care. Most important in this “community construction” in Shanghai is the culture of respect for the aged. The majority of Shanghai’s communities have activity centres for the aged, and the city has also established homes for the elderly and issued laws and regulations to protect the rights of old people.
28 Furthermore, following the example of other countries, some provinces, i.e. Shanghai, Beijing and Jiangsu, have begun to extend the “saving time” system to reflect the local situation. In Shanghai, the Tinan neighbourhood committee started to develop services
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in this field in 1998. In this system, the younger members of the elderly population are organised to provide care services for their older comrades. The service time put in by these “younger old people” is recorded and when they themselves are in need, local governments will organise other younger elderly members to provide them with similar services at least equivalent to the time they have previously put in. Continuous innovation and a new model of medical security 29 In the initial stages, China’s health security reform emphasised medical insurance reform initiated by the local governments. At that time, under cost pressures, some enterprises introduced innovations for medical security and encouraged the medical security reform by local governments. In November 1985, the Shijiazhuang district of Hebei province began to implement trials in the social pooling of medical fees for retirees. After that, some local governments that were implementing social pooling of pensions also pooled other medical fees. In May 1987, the vegetable company of Beijing’s Dongcheng district initiated “Health pooling for serious diseases” (dangbing tongchou), a project that attracted much attention. After the Ministry of Labour and Social Security promoted the trial in a brief report, the labour sectors in Sichuan and Hebei provinces extended this project at the district and county levels or inside general trading companies. Medical insurance reform moved towards socialisation.
30 The spontaneous reform by local governments received approving nods from the central government, which began medical security system trials under the “Decision on related problems in the establishment of the socialist market economy system”. The central government made sure that medical insurance would involve social pooling combined with individual accounts. In September 1994, the State Council empowered Zhenjiang city in Jiangsu province and Jiujiang city in Jiangxi province to carry out the trials, and these two cities issued and implemented the blueprint for China’s medical insurance reform. On the basis of their experience, the State Council expanded the trials to fifty-seven cities in April 1996. On the whole, the experimental model, which differed mainly in its concrete approaches to management and work, was adopted. For example, Shenzhen municipal government announced nine related management measures for trial areas in June 1996, before issuing its “Implementing measures for the tentative regulations on the basic medical insurance of Shenzhen” in February 1997 to improve the law and regulation of medical insurance in the city.
31 In 1998, in order to set up the constraint mechanism among hospitals and patients and security and pharmaceuticals sectors, to establish a mechanism for the sharing of the burden of fees, and to ensure that all employees and retirees can receive basic medical services, China launched new reforms of the medical insurance system on the basis of the “Liangjiang”experience. By 2000, a basic medical insurance system had been established for urban employees, with local governments making significant progress in this field.
32 Dependent on the joint efforts of the central and local governments, medical insurance reform has today entered a new stage as it is extended out nationwide from the trial units. According to research by Tang Xiaolan, the typical reform models mainly include three types: 1) a “mixture”, e.g. Shenzhen’s plan; 2) “combining the plan as a whole with the individual account”, such as that used in the cities of Zhenjiang and Jiujiang; 3) “two existent forms”, e.g. in Hainan province17. Poverty problems in rural areas
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33 Although urban poverty is something of a new problem in China, poverty in rural areas has a longer history, and it is prevalent to a far higher degree here than in urban areas. Traditionally, poverty in rural areas was tackled by the establishment of social assistance, which emphasised the family unit within the population (wubaohu). Since 1978, the central and local governments have initiated measures to alleviate poverty in rural China, such as the “Helping the poor project” and, in 1993, the “‘eight- seven’ poverty alleviation reinforcement plan” of the central government.
34 Additionally, local governments have adopted and enforced policies and local regulations as well as, later, organising poor peasants to work in infrastructure construction under the “Replace aid with work” (yigong daichen) project, which not only provides jobs, but also increases the income of poor families. Local governments have also channelled surplus labour in rural areas into developed regions, especially the cities, and have mobilised social initiatives. In most regions, local governments have started up “mutual help”(jieduizi) projects, through which the poor help each other. This involves help with finance, skills, knowledge and technology. During the period from 1997 to 1999, eight million poor people lived by “dressing warmly and eating one’s fill by the year”. Support granted by the state to poor people in poor counties reduced the population living in poverty from 58.58 million in 1994 to 17.1 million in 2000, thus helping to sustain a balance between progress and stability during the economic development of these areas18. Rural labour in urban areas 35 According to some scholars, Chinese employment policies for rural flows of labour have seen a significant development over the last twenty years. A number of cities along the eastern seaboard have basically fulfilled opening policy plans for peasants in urban areas, particularly in medium or small cities in Guangdong, while many local governments have announced related policies to solve the social security problem among rural labourers in urban China. The local government of Heilongjiang has issued the “Measures for the management of the employment of peasants in urban China in architecture enterprises”, which is designed in part to resolve problems of delays in wage payments for rural labourers in urban areas. Furthermore, the municipal government of Peking issued the “Temporary measures on pension insurance for peasants in urban China”, a document prescribing that enterprises should provide pension insurance for rural labourers in urban areas, wherever they are from. The governments of Sichuan, Anhui and Xinjiang have also published similar documents.
36 According to relevant ministries, one hundred cities and counties have established 1,000 places where local governments can inspect and measure the flow of surplus rural labour in order to analyse the supply and demand situation and issue timely information to enable its even flow. In some provinces, mainly the experimental regions where local governments are trying their best to establish a sound social security system, newly laid-off workers have not entered re-employment service centres since January 1st 2001; they will enjoy unemployment insurance directly. In 2002, in seven provinces with developed economies along the eastern coastal regions, the number of laid-off workers obtaining unemployment insurance had overtaken the number of laid-off workers entering re-employment centres.
37 Furthermore, Chinese local governments have been investigating disaster relief management mechanisms at different levels—work injury insurance; maternity insurance; social welfare, and so on—which has enabled them to improve the features
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of the social safety net to suit local conditions. For example, in April 1998, the Ministry of Civil Affairs intensified the reforms in trial areas for disaster relief in Liaoning, Zhejiang and Guangdong, with encouraging results. The inadequacies of local governments 38 Years of experimentation and trials have produced a basic framework for a social safety net, but many problems still exist: with the framework itself, with its management and operation, and with the relationship among implementing bodies. Local social safety nets are unsound 39 China now has a common countrywide understanding concerning the establishment of a social safety net. In the first half of the twenty-first century, China plans to develop a framework for a social security system based on three types of insurance: pension, medical and unemployment. But the establishment of such a net is still recent (with the exceptions of Shanghai and Guangdong, etc.). There are three reasons for this: 1) institutional deficiency; 2) deviations from formal central policies in the behaviour of local governments; 3) the appearance of new types of employment, in particular flexible employment.
40 Social insurance is mainly designed to solve related problems in urban areas, and there are few programmes for rural residents. The rural social pension plan does not work well, and its coverage is very limited. No new system has been devised to replace the original rural co-operative health security system following its collapse. A great number of poor peasants have difficulty getting to see a doctor and buying medicine. Especially in recent years, the health and medical situation has worsened. Furthermore, the social insurance system mainly covers workers in SOEs and collective enterprises and thus does not provide for all residents, particularly for rural labourers, in urban areas. The limits of institutional arrangements have hindered the social flow of rural labour.
41 Secondly, the establishment of a social safety net has developed unevenly. By mid-2000, almost one-third of Chinese cities had no plans for reforming the medical system, and about 58% had not carried out any reform. On the one hand, some real difficulties do exist, such as a lack of sufficient funds, experience and competence. On the other hand, some local governments have not carried out a reform of the medical system because local officials do not fully appreciate the significance of establishing a social safety net: their understanding is that decentralised decision-making means there is no need for them to take any action19. This makes sense in terms of the differing levels of safety nets required across regions. In a recent study by Zhu Qingfang and her colleagues20, twenty- four important social security indices were used to estimate the overall social security level of each province (Table 2). According to their research, the level of social security is high in developed provinces.
42 The pension system does not recognise planning goals as a whole at provincial level. Two conflicts are clear. The first is that the accumulation of pension funds differs from province to province. By May 1998, accumulated pension funds amounted to 70 billion yuan nationwide. But of this figure, twenty billion yuan can be attributed to Peking, Guangdong, Jiangsu, Shandong, Zhejiang and Shanghai, i.e. about one-third of the total clearly originates mainly from the developed provinces while the contribution from the underdeveloped provinces is minor. The other conflict derives from the first and is due to the uneven development of provinces and cities even at the county level. Within
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several provinces, some regions and cities have accumulated more than one billion yuan, while other regions and cities have defaulted. By the end of May 1998, the value of this default amounted to 8.7 billion yuan, while funds used in other ways or embezzled accounted for 5.56 billion yuan or 63.9% of the total.
43 A third point here: as the reforms in urban China deepen, new types of employment, mainly in community services, are emerging. With vast numbers of labourers in need of work, not even created employment is able to absorb them entirely. New types of employment are therefore needed, and flexible jobs are becoming more and more important. Under these circumstances, social security for labourers in flexible jobs cannot be ignored. But because these jobs are temporary, it is difficult for employers to pay social insurance. Accordingly, such employees do not benefit from unemployment, pension or medical insurance.
44 Fourthly, important problems linked to the transitional process of the implementation of the social security mechanism have still not been resolved. During the period in which pension insurance is transformed from a pay-as-you-go system to one of partial accumulation and individual accounts are adopted, hidden debts are becoming apparent. Empty individual accounts are a characteristic symptom of these hidden debts. Additionally, medical insurance adopts the model that links individual accounts with social pooling, but the concrete proportion and payment scope of individual accounts funds and social pooling funds are also vague, and this is something that should in practice be decided by local governments. Problems in the management of a social safety net 45 Local governments also face problems in this area, one of which is represented by the focus group that a social safety net protects. Another is the management of social security funds.
46 Without any doubt, the unemployed and elderly groups are in urgent need of help. But so are marginal groups. For instance, the identity problem of rural labourers in urban areas needs to be solved. In the long term, the flow of labour from rural areas is inevitable, yet social discrimination is an obstacle to the provision of social security for rural labour in urban areas and requires reconsideration. As mentioned above, some local governments have drawn up policies to solve the problem of social security for rural labour in urban areas, but some have issued policies to limit the flow from rural area.
47 Furthermore, there is a contradiction between secure fund management and making profits from fund investments. Some local governments have been implementing social safety nets with blank accounts for historical reasons or with local interests in mind. The embezzlement of funds is another major issue. The relationship between the central and local governments is unsound 48 The economic situation and population differ from province to province, with each province developing at a varying pace since 1978. As a consequence, local governments now have to accept different roles in the establishment of a social safety net.
49 Local governments have to implement the policies and measures passed down from the central government. Regarding the minimum living standard scheme, the central government requests that “funds of the minimum living standard scheme of urban residents are put into the fiscal budget of local government, to be brought into the special accounts of social assistance funds, special management and usage”. On this
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point, the fiscal capacity of local governments determines the level of their lowest provision for living standard security. However, decentralisation has changed the relationship between the central and local governments. Some scholars have called this situation “strong local governments and weak central government”. In fact, this description only stresses one aspect of the reality. In many instances, decentralisation has left some regions, especially the poorer provinces, facing financial risks. The development of the southwest for example is slow, and revenues are limited, heavily dependent as they are on subsidies from the central government. In Yunnan province, 120 (or 94%) of its 128 counties need financial subsidies. The central government thus needs to improve local revenue capacities, especially in taxation. It must also provide financial assistance and policy support to the western regions. Of course, the existence of local interests has also to be taken into account. Under the decentralisation process, some local governments have carried out many policies simply to protect local interests. These problems need to be solved by local governance.
50 In the light of these difficulties, insufficient institutional innovation is a major reason why some regions are lagging behind. In the 1980s, the eastern regions developed faster because innovative local governments encouraged the development of non-state- owned enterprises. That some localities are straggling is not only due to poor resources, but also a lack of institutional innovation. The attitudes of local governments to this important concept vary widely: some are trying their best to engage in institutional innovation, while others pay it scant attention. As far as health insurance is concerned, some local governments fail to recognise that the supply of basic health insurance depends on local finance and the actual capacity of the enterprises to shoulder the burden. During the reform of medical insurance, these local governments only considered the current requirements. Others continue to lag behind in this area, and the ill-suited approach that they have adopted thus unbalances the overall pace of reform. From local government to local governance 51 Whether concerning the theory or the practice, the discussion about the model of the Chinese social safety net has raged for a long time. Scholars differ in their opinions. While there are those who think that China should establish one uniform social safety net model, others consider that the model should be multiple. Still others argue that an ideal and sound social safety net would be one of integration and socialisation on multiple levels. Yet others propose that “China should at first transfer the object of social security from one that is governmental to one that is social”, and recommend an “adjustment of the income distribution system reflecting the status of different groups and power distribution, and other social security systems by governance and good governance”21.
52 In my opinion, the uniform institutional arrangement is best in theory, because it is not only useful for management but is also even-handed. It nevertheless requires strict preconditions, including a developed economy, abundant finance, a similarity of needs across the regions, a balanced regional development, and so on. But these preconditions are absent in China today. As a result, the uniform institution arrangement has to be the long-term objective, and the diverse institution arrangement should be adopted as a transitional objective in the short term. Of course, each single institution, or line, of the social security system can be uniform.
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53 Undoubtedly, the local governments will play many important roles during the course undertaken from the diverse to the uniform institutional arrangement, including those of policies administrator, direct organiser, and provider, whose aim would be to ensure a policy environment that is fair, stable, convenient and secure throughout people’s lives. Main roles of the Chinese local governments during the transition 54 Chinese local governments primarily play the following roles in the establishment of a social safety net.
55 As agents of the central government, local governments play an experimental role. Before the central government issues a sound social security policy, it must consolidate the experiences and findings gained from local government trials. The central government will then decide on any further institutional construction. As Xie Yue has pointed out, the increasing difference among the regions has been factored into a mature plan. Failure will not endanger the national economy if the experiment is limited. Furthermore, according to the usual practice before the reforms, the central government also hopes to establish a representative model as the window of reform.
56 Local governments play an enforcement role. After the central government has established a new institution, local governments act as its administrator, organising and implementing the social security system and related policies and raising adequate social security funds. While local governments control the financial resources for the system, they also manage the outcomes. In other words, local governments keep operations effective.
57 Local governments are the sources of institutional innovation. The relationship between the central and local governments is one of mutual co-operation and assistance. Local governments know more about the local situation, so institutional innovations tend to originate here. Since decentralisation, local governments have taken primary responsibility for the security system. Chinese social security reform is a compulsory change, but to some extent it is also a derivational change. The reform of the SOEs is one direct inducement, but the governments do not accumulate adequate funds. Facing these difficulties, local governments have undertaken institutional innovation. According to Western new institutionalism economics, institutional innovations mainly cover three aspects: individuals, volunteer groups, and central government. In other words, local governments are not thought of as the principle innovators in institutional change. Yet they play a very significant role. For instance, Jiangsu province began a re- employment project in 1995, in which all cities and counties now have re-employment service institutions as “one body composed of four social insurances” (siweiyiti), including job introduction and work training, unemployment insurance and labour service centres. Towards good governance 58 How to establish a feasible social security model is a global issue, especially in light of the fact that the scarcity of resources at the state level is a worldwide problem. The development trends for social security systems around the world show multiplicity to be a prominent characteristic. During the establishment of a social safety net, more and more actors are coming together to co-operate in and share the obligations of social security—communities, enterprises, households, individuals, central and local
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governments, the tertiary sector, even international society. Among these actors, local governments are important players22.
59 In general, I would argue that there are three main reasons why there are increasing numbers of actors participating in the establishment of social safety nets.
60 First, as a result of changes in social and economic structures, civil society is undergoing a gradual development, with diverse partnerships forming among and between governments and the non-profit and profit sectors in the establishment of a social safety net. As far as China’s social security system is concerned, NGOs have played an important role: since the mid-1980s they have organised various kinds of social funds to help the poor to the tune of 50 billion yuan. In May 2001, the central government drafted the “Outline of the poverty reduction plan in helping the poor in rural China (2001-2010)”, a document that set forward a poverty reduction strategy for China dominated by the governments but in which social forces will take an active part. Among these social forces, NGOs will participate in the implementation of poverty reduction projects initiated by the various levels of government in order to create new models of poverty reduction and improve their efficiency. Furthermore, with the development of Chinese communities, community services are becoming a new type of social security model23. And with the establishment and improvement of modern enterprise institutions, the supplementary security from enterprises has also developed. In the international context, donations and volunteer services have proved important social resources for some countries, developed countries in particular, and constitute an important part of the establishment of social safety nets24.
61 Secondly, with intensified social stratification, social heterogeneity has been strengthened. It is not feasible for one single actor to participate in the construction of a social safety net, neither is it appropriate for what a social safety net implies. Whether in theory or in practice, we can observe that it is impossible for governments to take on the burden of the social safety net alone. The term social safety net mainly refers to the policies under which governments provide minimum living standards for the social groups in the greatest difficulty through social relief and social assistance or income support25. More importantly, a social safety net requires the active mobilisation of all social resources to provide social protection for people in difficult circumstances. In practice, with the development of social heterogeneity, social resources are scattered among each social segment. In a society facing global risk, the resources in government hands have not proved perfectly capable of providing a social protection system for these people. Governments are trying their best to co-operate with tertiary sectors and market forces; for example, a number of NGOs and communities have participated in the construction of social safety nets. In addition, sectors that are public in some countries are privatised in others.
62 Thirdly, whether in a dichotomy of state and society, or a trichotomy of state, market and society, or in a three dimensional model involving the public sphere, private sphere and the tertiary sector, these models are not able to ensure efficiency and fairness in the distribution of social resources. In economic and sociological terms, this leads to the phenomena called “market failure”, “government failure” and “voluntary failure”. Obviously, according to the demands imposed by the operation of a social system, the interaction of many actors in co-operation with each other is an effective approach to the resolution of these failures. In recent years, in many countries
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worldwide, especially in developed Western countries, a new public management movement has emerged that includes the reinvention of the public sphere and the reshaping of the public spirit and public finances as a response to the failures mentioned above.
63 From a world perspective, the globalisation of the economy has brought about profound changes in the administrative environment of each government; every country is looking for new approaches to governance and trying to construct a new and more efficient and responsible model. In China, since 1984, the core of social security reform has been the restructuring of the relationships among the state, enterprises, individuals and society as a way to change the situation in which the enterprises were simply dominant. Eventually, China will set up a new social safety net dominated by society. Henceforth, with the diversity of social economic governance bodies, the construction of a social safety net will need increasing support from communities and enterprises, families, individuals, central and local government, the tertiary sector, even international society. It is therefore my argument that the future model for China’s local social safety net, or the strategy choice, will centre on local governments taking on the dominant role in an interaction of multiple players, with the effect that local government is transformed into local good governance, the object of which is to eliminate “social exclusion”. Success, and social stability, will therefore depend on the harmonious relationships both between the local governments on the one hand and the central government, the various communities, the enterprises, and individual households on the other, as well as between urban and rural China, and, finally, between the globalisation and the localisation of social policy.
NOTES
1. Li Shi and Zhao Renwei, “Zhongguo jumin shouru fen peizai yanjiu” (Further Study on the Income Distribution of Chinese Citizens), Jingji yanjiu (Economics study), No. 4, 1999. 2. Zhou Lan, “Zhongguo dangqian jumin shouru de diqu chaju fenxi” (Analysis of the Current Difference of Income of the Habitants among Regions in China), Jiangshan luntan (Jianghan Forum), No. 6, 1997. 3. Li Peilin and Zhang Yi, “Xiaofei fenceng: qidong jingji de zhongyao shidian” (Consumption Stratification: An Important Perspective for Stimulating Economic Development), Zhongguo shehui kexue (China Social Science), No.1, 2000. 4. The “Matthew Effect” is a term coined by Keith Stanovich, a psychologist who has done extensive research on reading and language disabilities, that refers to the idea that in reading (and in other areas of life) the rich get richer and the poor get poorer. 5. Tang Jun, “Zuihou de anquan wang” (The Last Safety Net), Zhongguo shehui kexue, No. 1, 1998, pp. 117-128. 6. Hong Dayong, “Gaige yilai Zhongguo chengshi fupin gongzuo de fazhan licheng” (The Development Process of the Alleviation of Poverty in Urban China since the Reform), Shehuixue yanjiu (Sociology Studies), No. 1, 2003.
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7. Wang Guojun, “Dui Zhongguo nongcun shehui baoxian tizhi de juxian jiqi gaige de sikao” (The Limitations of the Resident Rural Social Insurance System and Considerations of the Reform), Shanghai shehui kexue yuanjikan (The Quarterly Journal of the Shanghai Academy of Social Sciences), No. 1, 2000. 8. Ding Yuanzhu, “Wei shehui buli qunti he ruoshi qunti yiji bianyuan qunti—Gou zhuxin shiqi de shehui anquanwang” (Constructing One Social Protection System for the Socially Disadvantaged, Vulnerable and Marginalised Groups in a New Era), Liaowang (Outlook), No. 16, 2000; Li Qiang, “Chengshi nongmingong de shiye he shehui baozhang wenti” (The Unemployment and Social Security Problem of Rural Labourers in Urban Areas), New Perspective, No. 5, 2001; Zheng Hangsheng, “Shehui pingdeng he shehui fazhan” (Social Equity and Social Development), Jiangsu shehui kexue (Social Science of Jiangsu Province), No. 3, 2001. 9. Hu Angang et. al., Ziran zaihai he jingji fazhan (Natural Disasters and Economic Development), Hubei keji chubanshe, 1998. 10. Tang Jun, “Guanxin zhuanxin qide ruoshi qunti (zhi san)” (Care of Disadvantaged Groups in the Transition [third section]), Zhongguo dangzheng ganbu luntan (Chinese cadre forum of Party and Government), No. 5, 2002. 11. Tang Jun, op. cit., 1998. 12. Duoji Cairang, Zhongguo zuidi shenghuo baozhang zhidu yanjiu he shijian (The Study and Practice of the Chinese Lowest Living Security System), Peking, Renmin chubanshe, October 2001. Duoji Cairang is a former minister of civil affairs in China. 13. Tang Jun, op. cit., 1998. 14. Duoji Cairang, op. cit., 2001. 15. Duoji Cairang, op. cit., 2001. 16. Chen Jiagui ed., Zhongguo shehui baozhang fazhan baogao (1997-2001) (Report on the Development of Social Security, China [1997-2001]), Zhongguo shehui kexue chubanshe, July 2001. 17. Tang Xiaolan, “Dangqian yiliao baoxian moshi de bijiao he xuanze” (Comparison and Choice of the Present Medical Insurance Model), Guangxi shehui kexue, No. 2, 1999, pp. 113-116. 18. Zhongguo zhengfu baipishu 2002 (White Paper of the Chinese Government, 2002), “Zhongguo nongcun fupin kaifa de fazhan” (The Development-oriented Poverty Reduction Program for Rural China), http://www.china.org.cn/ch-book/. 19. Zhang Zuoji, Xinxi ribao (Information Daily), October 1st 2000. 20. Zhu Qingfang et. al., Shehui baozhang zhibiao tixi (Social Security Index System), Peking, Zhongguo shehui kexue chubanshe, 2001. 21. Zheng Gongcheng, “Jiaru WTO shenhua shehui baozhang zhidu gaige de xin qiji” (New Turning Point in the Deepening Reform of the Social Security System), Renmin ribao (People’s Daily), 3 March 2002; Zheng Gongcheng, “Zhongguo shehui baozhang gaige he zhidu jianshe” (Chinese Social Security Reform and Institutional Construction), Zhongguo renmin daxue xuebao (Journal of Renmin University of China), No. 1, 2003; Zheng Gongcheng, Zhongguo shehui baozhang moshi bianqian jiqi pinggu (Changes in the Chinese Social Security System and Evaluation), Peking, Zhongguo renmin daxue chubanshe, November 2002; Li Yingsheng, “Tansuo Zhongguo shehui baozhang tixi de chengxiang zhenghe zhilu” (Investigating Ways to Integrate Rural and Urban Areas and the Chinese Social Security Model), Zhijiang xuekan (Journal of Zhejiang), No. 5, 2001; Ren Baoping, “Zhongguo shehui baozhang moshi de xuanze jiqi goujian” (Choice and Construction of the Chinese Social Security Model), Academic
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Forum, No. 1, 1998; Lin Shuming, “Jiedu santiao xianzheng he binzhi” (Interpretation of the Co-operating Mechanism of the Three Security Lines), Shehui (Society), No. 2, 2002; Yang Yiyong et al., “Woguo shequ jiuye fazhan zhuangkuang diaocha” (An Investigation regarding the Development of Community Employment in China), Jingji xuejia (The Economist [China]), No. 3, 2001; Yang Tuange Daoshun, “Zhongguo chengshi shequ de shehui huibao zhangxin fanshi: Dalian yu Hangzhou shequ gean yanjiu yu tansuo” (New Type of Social Security from the Urban Community of China—Case Studies from the Community of Dalian and Hangzhou), Guanli shijie (Management World), No. 2, 2002. 22.Yu Keping ed., Zhili he shanzhi (Governance and Good Governance), Peking, Zhongguo shehui kexue wenxian chubanshe, September 2000. 23. Huan Peijun, “Shequ fuwu: yi zhong xinxing shehui baozhang moshi” (Community Services: A New Type of Social Security Model), Hebei daxue chengren jiaoyu xueyuan xuebao (Journal of the Adult Education College of Hebei University), No. 1, 2002; Liu Guizhi, “Tuiguang shequ shehui baozhang de moshi sheji” (Extending the Model of Social Security Derived from Communities), Shuiwu jingji (Tax Affairs Economy), No. 5, 2002. 24. Ding Yuanzhu, “Wei shehui buli qunti he ruoshi qunti yiji bianyuan qunti…”, op. cit., Liaowang, 2000; Ding Yuanzhu, Chonggou Zhongguo shehui anquan wang (The Reconstruction of the Social Safety Net in China), Tianjin renmin chubanshe, March 2001. 25. Shang Xiaoyuan, “Zhongguo shehui anquan wang xianzhuang jiqi zhengche xuanze” (The Current Situation of the Chinese Social Safety Net and the Policy Options), Zhanlüe yu guanli (Strategy and Management), No. 6, 2001.
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Economy
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A Fresh Look at the Development of a Market Economy in China1
Rigas Arvanitis, Pierre Miège and Zhao Wei
EDITOR'S NOTE
Translated from the French original by Jonathan Hall
1 Over the last 23 years China’s GNP has increased sevenfold. In terms of purchasing power parity (PPP), China is number two in the world, and it has the sixth largest volume of external trade. In 2002, China was the leading recipient of foreign investment. These impressive figures are behind the widespread view that the country is experiencing an “economic miracle”. The special features of Chinese culture, and the former system of socialist planning, are additional factors in the mystery of this success. It is also believed that WTO membership, which thrusts China into the slipstream of globalisation, will totally change the rules of the game in the national economy. Under this view, China is set to become the new world centre for manufacturing, taking over this role now current to South-East Asia. The optimists believe that the present phase of modernisation will be completed in the next twenty to fifty years, making the Chinese economy the largest in the world by 2030. They extend this Chinese “miracle” to the political sphere, believing that the transformed economy will have become the driving force in Chinese society. Once the new rules of the game are in place, the prospects are for the resultant economic development to bring about the emergence of an urban middle-class bourgeoisie, and this will favour democratisation of the regime. Already new generations are growing up in the cities in an environment strongly affected by the technological revolution and globalisation.
2 In a speech to Chinese academics, Milton Friedman predicted that “anyone who can give a clear account of the reform process in China, will win the Nobel prize in economics”. The main focus of all economic analyses is centred on the institutional changes, known as “reform and opening” (gaige kaifang) implemented by Deng Xiaoping from 1979 onwards. So every discussion is concerned with trends in economic
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policy, and particularly with positing a contrast between the Chinese policy of gradual reforms 2 and the “shock therapy” adopted by the Soviet Union. But for all this very real interest, these perspectives remain at the macro-economic level. There is a need to go further and examine the operations of the economic institutions and agencies responsible for wealth creation, such as the Chinese enterprises, public institutions, foreign investors, and organisations to promote technological development 3. We propose to take a new look at Chinese growth by examining more closely the operations of the systems of production, since these are the real creators of that growth. It is only understanding this that the veil of mystery surrounding the “growth miracle” will be lifted, as it would anywhere else 4. We will take the example of the south, not because it is China’s most dynamic area in economic terms but because Guangdong contains a multiplicity of productive systems, thanks to its being the earliest to open up and therefore the fastest to develop5.
3 China is a particularly interesting case for economic theory, and for a comparative approach to economic and socio-political analyses. It confronts us in a new way with questions over the role of government in economic development6, forcing a fundamental rethink of the social bases of growth. Studies which restrict their analysis to the gradual transition of the socialist regime to the market economy, such as those which focus narrowly upon “privatisation”, seem to overlook at least three relevant areas of investigation: the renewal of the oldest of the systems of production, the role of the state as promoter and regulator of economic activity, and the degrees of efficiency achieved by the systems of production that appeared with the reforms. In this article we would also like to raise, however briefly, the question of the growth and durability of the different structures of production. To this end, we will resituate the empirical studies of separate enterprises within a wider frame of reference, showing that Chinese economic expansion is largely due to its being investment-driven, and that the economy itself is still quite a way from being demand-driven. This explains a considerable number of the practical difficulties encountered by all the enterprises. The main question is whether this new economy and its systems of production can sustain themselves. By “systems of production” we mean the totality of plant and human resources contributing to a productive activity7. A system of production may include several enterprises; in fact that is frequently the case in developing economies, where enterprises are subcontracted to those who place orders with them, and whose brand name appears on the finished product. To restrict discussion to the nature of the enterprises themselves would be to focus on the internal organisation of each one, and especially on the nature of its ownership, whereas all the evidence suggests that in China the question of ownership is less important than how the links between the different units of production operate 8. Accordingly, our concept of a “system of production” puts the emphasis on the arrangements made for the productive process and its development, as well as on the interrelationship between the sites of production and their users.
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Figure 1: Evolution of gross investment in fixed assets (million yuans)
Note: The category of ‘’private enterprises includes individual companies (getihu), enterprises by shares, and mixed capital companies. The private sector is probably overestimated in this category, and, on the contrary, collective enterprises are hiding really private companies. See Guiheux, 2002, for analysis of these categories. Source: Zhongguo tongji nianjian 2002 (China Statistical Yearbook 2002), op.cit, Table 6-2, p. 176.
The three waves of investment
4 The history of the rapid growth of the Chinese economy can be broken into three successive waves of investment. These waves, and the resulting growth, were not the fruit of an overall strategy on the part of the government and its economic and financial bodies. They were, rather, the outcome of an accidental conjuncture of some perfectly identifiable factors.
5 The first phase of the expansion was the result of the industrialisation of the countryside, for initially the reforms were aimed at that sector in particular. The ability to grow and sell products outside the state planning system led to a rapid rise in agricultural production. In the early 1980s the profits from the sale of agricultural products were massively invested in the rural enterprises, the so-called “township and village enterprises” (xiangzhen qiye). This growth phase lasted six years, from 1983 to 1988. The investments from it were like manna from heaven for the local authorities and the most adept among the inhabitants of the rural areas. They found themselves in quite exceptional circumstances, given the absence of any competition and the existence of a large demand hitherto unsatisfied by the planned economy. This new economic opportunity permitted the development of an “economy outside the plan” 9. There was considerable demand for foodstuffs, clothing and domestic durables. This demand was initially directed at light consumer producers, but it was later redirected towards heavy industry. So at this stage, agricultural resources provided the motor for growth, but the period of rapid expansion was followed, in time-honoured fashion, by a period of overheating characterised by over-investment. By the late 1980s, the buying power of the peasantry began to diminish, and the rural market, which represented 75% of the population, could not sustain the growth in demand. At the same time, all the city families had already satisfied their basic need for durable domestic items, and the upward curve in demand for agricultural products and clothing flattened out. In the early 1990s, therefore, this slowing consumer demand could no longer function as the engine for economic growth. The investment patterns of the previous decade had been directed towards light industry, which is characterised by short-term production and rapid returns. The consequence was overcapacity in the durable consumer goods industry, which meant that the current economic model was no longer viable.
6 The early 1990s saw the arrival of another source of investment, so-called “foreign” investment, which mostly came from Taiwan, Hong Kong and overseas Chinese. In
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1994, Foreign Direct Investment (FDI) represented 20% of overall investment. In 2001, foreign investment from Hong Kong, Macao and Taiwan continued to represent 18% of the total (158 billion yuan) and 47.5% of foreign investment in Guangdong province (55 billion yuan) 10. The Chinese government, wishing to take advantage of this capital inflow, set up a great number of economic development zones in the coastal regions. Everywhere “hotels for overseas Chinese” sprang up to accommodate the influx, and these provided the engine for growth in the first half of the 1990s 11. Some of them, like Shenzhen, are still major poles of attraction for foreign investment. Investors were attracted by favourable policies, the nature of the labour force, and the Chinese market. In addition, the common language and cultural proximity, along with shared attitudes towards combining political connections with business, encouraged this source of investment. During this phase, two-thirds of foreign investment was in the hands of small and medium-sized firms from Hong Kong and Taiwan. These made use of labour-intensive production to assemble imported parts and re-export them to supply the international market. This system received the blessing of local officials, since this economic gold also blessed them with great decision-making powers. The enterprises involved did not represent direct competition, either with the China-based township and village enterprises or with the private or state-owned ones. On the other, hand they contributed towards improving the trade balance and towards increasing employment and incomes. Moreover, the demand arising from this poorly paid labour force was directed towards the low-quality products from the communal and the state- owned enterprises. These profited from the growth in domestic demand, and still do. That is why all these enterprises survived throughout this period, despite producing goods which were in many ways outdated (See Figure 1).
7 This growth model, which depended upon FDI from Taiwan and Hong Kong, could have lasted for at least twenty years, by following the set pattern of integration with foreign manufacturers. But the Asian crisis of 1997 modified the underlying situation. The developed economies reduced their orders placed with Chinese enterprises, while the latter remained essentially geared to the supply of overseas markets. Simultaneously, the new rates of exchange restored a degree of competitive advantage to the other Asian countries, by making their production costs attractive again 12. So this second engine for growth no longer worked. The third phase of development began at this juncture, with the arrival of FDI funds from industrialised countries like the United States, Japan and Europe. The Chinese government reacted extremely fast, by adopting a whole range of measures to attract this foreign investment. The huge campaign in favour of entry into the WTO must be understood in this context. That is why WTO membership became the main objective of official policy. Since 1997, investment in real estate has greatly increased, and the big cities have become showcases for China’s growth 13. Forthcoming events like the Peking Olympic Games in 2008, and the Shanghai Universal Exhibition in 2010, provide an additional seductive appeal to international investors. As a consequence of the spectacular take-off in international investment, capital inflow from Taiwan and Hong Kong has picked up again, and continues to be an important part of the overall FDI in China (See Figure 2).
8 Between 1978 and 2002, the value of Chinese exports rose from 10 billion US dollars to 226 billion. In the 1980s, income from exports stimulated domestic demand for basic consumer goods. In the 1990s, exports gave a stimulus to the demand for sophisticated electronic consumer goods, particularly household equipment, making the export trade a major engine for growth. In the second half of the 1990s, China set about stimulating
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demand in the sphere of tourism, real estate, and car production. In these ways, the reforms launched by Deng Xiaoping have paved the way for expansion in both consumption and production.
9 In a well-known article in Foreign Affairs, Paul Krugman defines the nature of the growth in East Asian countries as an effect of resource mobilisation, not of increasing productivity. He was commenting on a little-known article by Alwyn Young 14 and his article concludes that Asia has achieved remarkable growth rates without any corresponding increase in productivity. In his view, these growth rates were more the outcome of mobilising available resources than of increasing efficiency. In short, it was a matter of “more perspiration than inspiration” 15. Essentially, China has been following this model of accumulation, with variations of its own.
Figure 2: Evolution of foreign investments (US$ billion)
Source: Zhongguo tongji nianjian 2002, op. cit, Table 6-3 p. 177, ‘source of funds’.
Figure 3: Industrial production by type of enterprises, 2001. Comparison between China and Guangdong (billion of yuans)
Source: Zhongguo tongji nianjian 2002, op. cit, Table 13-3 p. 425.
10 Firstly, average individual income is low and the level of household savings is high. The rapid increase in China’s GNP in the first stage of growth was accompanied by an increase in income disparities. Secondly, given the size of the Chinese economy and the importance of regional disparities, a single wave of investment is simply not enough. Thirdly, the Chinese state has a powerful capacity for mobilising resources, and has been able to make use of the structures of production which were actually introduced
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to ensure social and political stability. This mode of economic organisation lies at the very heart of its current difficulties.
Productive systems piled on top of each other
11 To leave the analysis of the “Chinese miracle” at this juncture would be to commit the error of looking only at the macro-economic data—like the break-up of the economy into separate spheres, the decentralisation of power, and the return of former evils like corruption, gangs, prostitution etc.—taking note only of the consequences rather than the causes of the economic changes 16. Our view is that these causes are to be found in the systems of production. With each wave of resource mobilisation, there have arisen new enterprises with their own distinct systems of production. It is these which have engendered the growth in production and returns on investment.
The rural enterprise systems of production
12 The first type of productive systems are the township and village enterprises. These enterprises grew up in the early 1980s, and operate as private companies, but for reasons of ideological acceptability they are officially registered as collective enterprises 17. They work with raw materials and employ low-cost labour, and are concentrated in various sectors of production, which they quickly came to dominate 18.
13 At the same time, the larger collective enterprises already in place started to operate as “private” firms. A good example of this is the Yueqing enterprise in Shuikou (Guangdong province). Starting as a tap manufacturing plant, it modernised and became the organising centre of a myriad of small plumbing firms. Consequently, Shuikou township is now at the head of a whole industrial sector selling to the entire country. A large number of other enterprises have set themselves up along the same lines, both in Guangdong and in the rest of China. Well known brand names like Legend, TCL, Hai'er, Konka and Galanz are similar enterprises that arose with the first phase of expansion, and prospered mostly because their status as collective enterprises gave them access to public funds (see Figure 3).
14 All these enterprises 19 were primarily suppliers to the domestic market, only turning later to production for export. Galanz in Shunde, a town close to Canton, is typical. It started as an assembly plant for microwave cookers, whose step-up transformers and magnetron tubes were imported from Japan for US$20. The same components imported from Europe cost US$30. The leaders of the enterprise made a quick visit to the European manufacturers and offered to buy transformers at US$8 and become the Own Equipment Manufacture (OEM) producer for the European firm 20. The Europeans made their own rapid calculations and accepted the offer. They transferred all their equipment and production lines to Shunde, including their assembly technology. The Japanese offered the same OEM arrangement, with a purchase price for the transformer of US$5. Today Galanz produces the transformer in situ for US$4, and the enterprise claims to control 30% of the world market and 70%-80% of the domestic market. How has that been possible? In an interview, the owner explained that in Europe the production line runs for six hours a day, and five days a week, adding: “Because of strikes, they actually only work an average of four days, or between 24 to 30 hours a week. I took over their production techniques and set up a system of three eight-hour
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shifts, which works out at a 160-hour week. My productivity is six to seven times higher than in Europe, but each wage bill is between 3% and 5% of the European wage”.
15 The success of these enterprises is to be explained not only by the match between the foreign clients’ search for low costs and Chinese productive capacity, but also by their entering into a stable exchange system along OEM lines. The Galanz factories produce on behalf of two hundred multinational firms from every quarter of the globe. The Chinese enterprise takes care of the manufacturing end while the technology, brand name, and marketing remain in the hands of the foreign multinationals. It is striking how quickly the enterprise has grown, which is why it is a frequently cited example. The quest for increased turnover is a constant factor, with the enterprises taking advantage of their low production costs. In addition, such enterprises actively seek out foreign partners to ensure access to technology and market outlets. What the Chinese enterprises are looking for is this technology transfer, both material (in the form of products, equipment, and processes) and organisational (quality control and management skills).
The systems of production set up by the overseas Chinese investment
16 A second type of production system appears in enterprises which were established by the second wave of investment from Taiwan and Hong Kong. Industries producing textiles and clothing, electronics and electrical household goods, were relocated to the Pearl River delta. These enterprises share some features with those of the first wave, but they also have some specifics of their own. Firstly, the investors not only established the enterprises, but brought with them their own networks of suppliers and customers. The Taiwanese and Hong Kong enterprises which set themselves up on the mainland to take advantage of low production costs, were backed by more than thirty years experience as suppliers to the multinationals. In addition, they have their own way of doing business, to which the entrepreneurs from Guangdong were quick to adapt. Secondly, they had more complex production techniques, even in the case of less sophisticated industries like shoes, clothing and basic electrical goods. Thirdly, these overseas Chinese established strong ties with mainland officials and local government bodies. They brought the local power structures into the very operations of their own systems of production. More effectively still, in an increasing number of cases, the local authorities appealed to them to help strengthen technological development and to launch technical education initiatives (such as practical demonstrations, technical training, and apprenticeship schemes). There were also centres to promote technological innovation, aimed at providing technical know-how to enterprises in a particular sector of production (for example, shoes and underwear in Nanhai). In the industrialised world such centres are usually organised by the chambers of commerce or public education bodies. In China, they are handled by the joint enterprises, to which a foreign partner brings both its expertise and its market.
17 In the Pearl River delta area, these enterprises owned by foreign capital employ thirty million workers from the most impoverished provinces of China. There are reckoned to be another thirty million potential migrants in the inland provinces, which guarantees continuing low labour costs. The foreign enterprises have easily been able to make use of this situation, turning the whole area into one huge factory, with intense local
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concentrations according to the type of products. Shunde is the main centre in China for the manufacture of electrical household goods, Ronggui is the largest centre in the world for air-conditioning unit production, Shaxi is the centre for leisure wear, Humen (Dongguan) for clothing, etc. 21
18 Dongguan, which is close to the border with Hong Kong, is an example useful for examining the operation of the systems of production financed by FDI from Taiwan and Hong Kong. Dongguan is a relatively small town which serves as a centre of production for a great number of specialised products: coffee, computer mice, and other computer components. Its systems of production are known by the expression sanlai yibu (literally “three resources and one obligation” (22)), and are similar to the Mexican maquiladoras, in which products are manufactured from imported materials, and assembled according to models provided by the foreign client. The industrialisation of Dongguan began in the early 1980s, well ahead of the surge in the second wave of investment in the rest of the country, thanks to the relocation of industries from Hong Kong 23. The driving force behind its growth has been the manufacture of OEM products for its clients. Since 1989, Dongguan has attracted numerous Taiwanese enterprises specialising in information technology and shoes, and these have built up a network of local suppliers to reduce the time and cost expended in purchasing raw materials and parts, while meeting the standards set by the needs of international clients. The supply networks provide a link between local and foreign enterprises. They are all members of a single constituted system of production: customers, suppliers and manufacturing units are all closely integrated, and the whole system benefits from the comparative advantage of cheap labour. The parameters are set by the global market, and contributions from the local authorities in terms of innovations or technical support are minimal. The key question confronting these systems of production is how to move on from the stage of providing low-cost assembly to foreign customers, to become complete OEM suppliers, or even achieve ODM (Own Design Manufacture) status 24.
19 By the end of the 1990s this system had reached its limits 25. Production costs were relatively high in comparison with other regions of China. Foreign enterprises were being set up in China with their own supplier networks, and some regions were becoming direct competitors. In Suzhou, close to Shanghai, a number of firms have taken advantage of the cheaper local labour and the availability of direct links with the multinationals. Consequently Suzhou is now about to overtake Dongguan as the world’s largest producer of computer parts. The Shanghai and Zhejiang region has entered into direct competition with Guangdong 26. The exhaustion of the model of production in Dongguan is due to the difficulty in upgrading the systems of production. This illustrates a key point in the theory of industrial development, namely that the creation of enterprises is a process quite distinct from their development (see Figure 1) 27.
The systems of production set up by FDI
20 The third wave of investment was provided by the industrialised countries. Currently, numerous “third generation” systems of production are being piloted by foreign firms. The four hundred largest of these have investments in China. The world’s leading manufacturers of telecommunications and oil industry equipment, cars and machine tools, have already set up their own production networks in China. These investments are often focused on the Shanghai region. Foreign firms begin by setting up a
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representative’s office, and then establish their production sites. Foreign investors’ objectives are no longer just to relocate the manufacturing process to cut costs and then re-export, but to develop a market in China itself (see Figure 4).
Table 1: Basic indicators of foreign companies. Investments and exports (US$ million)
Source: Zhongguo tongji nianjian 2002, op. cit, Total Exports: table 17-10, p. 626; Investments: table 17-20, p. 636.
Figure 4: A scheme of the piling-up of productive systems
21 These new systems of production are still at a preliminary stage, and the foreign firms involved are beginning to perceive the problems which any enterprise must encounter, in whichever country it first sets up operations 28. Even those foreign firms which are already established are still finding it difficult to make any profit. For a foreign firm everything is more expensive in China, from land purchase to building costs, installations, employee recruitment and training, communications with headquarters, relations with government offices handling labour and the environment, and commercial dealings with suppliers. It is more expensive to set up an integral system of production than to collaborate with a local supplier (see Figure 5).
22 Unlike the systems of production established under the first two waves of investment, these firms have no difficulty making use of efficient managerial techniques, and in setting up organisational structures geared towards their production goals and their market. Their difficulties arise solely from their relations with their social environment. The future legal and institutional setting within which they will operate, will be a decisive factor for these “third generation” systems of production, and so the foreign investors who back them are relying on the complete opening of the Chinese
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economy in accordance with international agreements. It is still too early to make a full assessment of this third wave, and of the eventual outcome of the super-imposition of these three different systems of production on top of each other.
Do the state enterprises amount to a distinct system of production?
23 Discussions of the modernisation process in China tend to focus mainly on the emergent systems of production, namely on those which arose after the opening-up reforms. But there is another system of production which is easily overlooked because it is out of harmony with all the talking up of the “miracle”. This system of production, namely the state sector, plays a very important role in the economic ethos of the country.
24 Before the reforms, China was a socialist country whose economy was based on the state enterprises. The enterprises, the Party administration, the schools, and the hospitals were all single “work units” (danwei), and were in turn all completely integrated into the structure of the planned economy of the single-party state. These “work units” were there not only to produce goods, or supply services and training; they were also charged with major administrative, political and socio-economic functions (like health, education, housing and ration coupon distribution), fulfilling the role of different areas of state administration. This system still remains the social and economic basis of the so-called “socialist market-economy system”. The different newly emergent systems of production have established themselves on top of this underlying economic and political basis of society. For over twenty years now, the reforms have been seeking to improve the operations and achievements of the state enterprises, while also making their property rights and management powers more transparent, but without dismantling the enterprises themselves, along with the political and administrative apparatus of which they are a part. So even though the planned economy may have disappeared, this economic and political system still remains. As the new millennium dawns, this system still includes government administrative offices and Party organs, both central and local, along with social organisations, and state monopolies like banking, radio and TV, and the other media.
25 The state enterprises are the very heart of this system. Although they have lost many of their markets to the new systems of production, they still enjoy privileged access to the financial resources of the country. Between 1985 and 1992, the share of the state enterprises in the GNP fell by 6%, but their financial resources only went down by 4.7%. Since 1992, the share of the state enterprises in overall industrial production has continued to decline, but their investments have been increasing by 1.5%. In the 1980s, the government transferred considerable resources to the state enterprises by reducing the taxes on their returns. Next, in order to continue its financial support to the state sector, in the early 1990s the government introduced the sale of public debt in the form of bond issues, and then, in the second half of the decade, it organised support through bank loans, making it easy for the state enterprises to obtain credit at preferential rates. More recently, the government has set up and supported the stock markets with the same goal of financing the state sector. In this way the state enterprises benefit from public financial resources unavailable to the so-called “private” firms, and at the same time they have greater ease of access to other types of resource like, for example, the publicly funded research centres and universities 29. At the present time, the policy
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of supporting industrial giants (zhuada fangxiao), which is still far from successful, is centred on several very large-scale public enterprises 30.
26 The state enterprises have not only used their privileged access to finance investment in production. Over the last two decades, a large part of their investments have gone into housing their employees, and into funding social security payments and pensions, that is to say, into the social benefits needed to maintain social stability.
27 With the coming of the reforms, the state enterprises underwent major transformations, but their basic nature has not changed. There is no question of entirely privatising the state sector, but rather of selling off certain parts of it to procure new sources of finance. But the offers of shares for management buy-out did not deliver the promised results, and they have since become the focus of intense debates over the chances for personal gain which they afford. A large proportion of these systems of production are in decline, and their future depends on the ability of the government to keep up the flow of investment towards them. The banks and the stock exchange seem only to exist to channel this flow in their direction. And despite everything, these public enterprises still enjoy easier access to other major resources, of a technological nature, than the other kinds of enterprise 31. So, to a large extent, the challenge facing the state enterprises is to improve their ability to produce more and to innovate.
Uncertainties over the behaviour of the various economic players
28 How long will these growth engines continue to perform? And how long can the present structure of the Chinese economy be sustained? These persistent questions dominate all the debates about China. To answer them, a fundamental reflection on the nature of the market economy is unavoidable 32.
Figure 5: Investments in fixed assets China (left) and Guangdong (right) (billion of yuans)
Source: Zhongguo tongji nianjian 2002, op. cit, Table 6-2 p. 176.
29 Economic development requires trust: that means trust in oneself and in one’s own working tools, and trust in the other economic performers, but also trust in the institutions and the rules of the game 33. It has become commonly acknowledged since the work of Karl Polyani and the economic anthropologists (34), that this latter form of trust is an indispensable component of any economic system. This non-material element is a necessary supplement to capital and labour. Mutual trust is the basis for the long-term development of systems of production.
30 Although the contribution of trust to economic performance is difficult to quantify, it can be clearly stated that the ability of the economy to continue functioning over a
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long period requires certain rules and accepted norms to underpin the relations between the various economic actors. Does this trust between the agents themselves, and towards the economic system as a whole, exist in China today? Have the new systems of production contributed towards its emergence? Has the arrival of a private ownership economy promoted those rules in the operations of the market which respect the rights of the different actors, consumers, enterprises and workers alike?
31 Economists who favour the process of gradual change in the Chinese economy give a positive answer to these questions. Their argument is that the gradual introduction of private enterprise is forcing the economic system to adopt the contractual rules necessary for its satisfactory functioning. And indeed, the sheer number of economic reforms, and the massive redrawing of legal provisions, give some grounds for believing in the progressive adoption of new rules which will pay greater respect to the rights of others, and will be less arbitrary in the application of legal sanctions 35. If this proves to be the case, China will have found the magic formula for moving from a socialist economy to a market-based one, without any noticeable crisis, and within a political continuum free from upsets on the scale of those which Russia encountered at the time of the implosion of the socialist system there.
32 Better still, according to this view, the population as a whole, and more particularly those who are involved with the emergent systems of production, seem to believe that economic success is all that counts, whether it is that of an individual or of the overall system, and that this individual or collective success will give rise to an improvement in the law, and in social and judicial norms. In sum, the idea is that progress will be the fruit of economic success. Paradoxically, this idea is supported by the legacy from the old socialist ideology which proclaimed a strong belief in economic determinism. Developments in other domains are supposed to come as a result of economic changes (36), so most intellectuals seek economic explanations for social and political developments 37.
33 But we should recall that this widely shared belief is itself very new, and it contains two weaknesses. Firstly, only the success stories are highlighted in connection with the emergent systems of production, and only the strengthening of the private sector is given any consideration, not its failures 38. Secondly, the state enterprise system and the overall political structure, which remain firmly under the operational control of the rules governing the Party and the state, are forgotten. Simultaneously with the appearance of the new systems of production, there was a decentralisation of political power to enable greater flexibility in the chains of command, and this was accompanied by an increase in the personnel employed within the new structure 39. At the provincial and municipal levels, the political structures involved saw the birth of a greater freedom of action and a lessening of disciplinary control from the central government. The actors on the lower rungs of the ladder were able to work in their own interests 40. Following the reforms, the fiscal powers of the state were reduced, and the commercialisation of the public administration and services was a response to this new situation. The local governments have set up a lot of agencies which charge fees for formerly free services. The universities now charge for their courses. The schools and private colleges have enrolment fees. The hospitals sell their medicine at very high prices.
34 The government is encouraging this galloping commercialisation, while at the same time preaching against corruption 41. But the state itself supports these transactions
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because it needs the financial resources which they provide. People’s dealings with government agencies are assuming the nature of commercial transactions, like most social relations in China nowadays. This logic of immediate economic interest, without a safety net or institutional restrictions, affects all social activities, inside or outside the political structure.
35 This unlimited reign of an “axiomatic of interest”, as Alain Caillé calls it, appears to us to dominate the entirety of Chinese society. The new systems of production have favoured its development, and in the realm of interactions between private economic actors, the overriding rule is competition at all costs, with no regard for trust, and with no other criterion than success or failure 42. The really fierce competition is not between the state enterprises or the multinationals, but between the large number of small enterprises, and this has an enormous effect on prices 43.
36 Even in the coastal regions, despite their being more open and more accustomed to free market transactions, there is daily evidence of this lack of trust and an absence of clear rules governing business conduct. Not only do enterprises look mostly for short-term profit, without bothering about long-term capital accumulation, but they also seek to avoid partnerships and external input. They focus on speed, rapid expansion, and competitive prices. Even when they know each other by name, which is often the case, the owners of enterprises producing the same items and in the same municipality, never inform each other of their training needs or their labour problems. The large number of dinners which they attend are merely intended to show that everything is alright, not to discuss together their technical, legal or economic needs. A shared space for social intercourse is far from being established. As for the imposition of any official limitation, for whatever motive (including labour and environmental protection rights), this appears to such proprietors as an unacceptable state encroachment into private business, and an infraction of the mandate: “Enrich yourselves!”. Finally, our interviews have shown that the enterprises know their clients well enough, but they do not know the state of their market. Only very few of the owners are able to say whether their market is rising or falling, and very few can give an indication of its size, whether at the national or regional level. This uncertainty is quite clearly at the heart of their behaviour.
37 Even the state enterprises are forced into this competitive pattern (44), although it is in marked contrast to the known and respected rules which pertain in the political order. Both Chinese and foreign economists talk of an opposition between the market and the state. However, the crucial factor is not to be found in this opposition between the public and the “private” sectors, but rather in the difficulty of even imagining the emergence of an economic sphere outside the political system, in which confidence in a shared respect for the rules would itself be the rule rather than the exception. At present, it even seems rather difficult to maintain that Chinese society is dominated by the market economy, because it lacks the essential ingredient of such an economy, namely respect for the rules which underpin mutual trust. In its place there is deep uncertainty, and this engenders opportunist behaviour, whatever the existing property laws or the kind of market in operation, private or public. That is why it seems vain to believe that the growth of the structures of production outside state control will eventually lead to the adoption of rules which will inspire trust in the proper workings of the market. All indications are that the rules based on the socialist system are still firmly in place. Such things as the laws restricting personal freedom of movement,
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budgetary rules, employment laws, purchase regulations in the public markets, and the lack of trustworthy statistics, are all signs that there has been no change in the political system. And in the absence of any rules and standards of proper conduct, established not by force but by general consent (45), all that remains is the Hobbesian war of all against all. In the final analysis, this is the actual condition of all the economic relations outside the state, while the latter simply acts as a benevolent onlooker.
38 For all the enterprises set up by the first wave of investment, survival is achieved through meeting immediate demand, and this depends on extremely short-term calculations. The very few enterprises which seem capable of reaching a higher level, in technical expertise and in relations with their suppliers and customers, are those which often just happen to have a joint agreement with a foreign partner, or those whose market conditions just happen to force them to make more dynamic choices, such as investing in research and development (R&D), or undertaking engineering improvements. But in any given town, such enterprises can be counted on the fingers of one hand, and in a whole region they amount to no more than a few dozen 46. The enterprises belonging to the second wave of investment depend for their survival on their ability to offer their clients a range of OEM items, an ability which they have usually developed before setting themselves up in China. Finally, the Western and Japanese enterprises which have established operations in China have done so precisely for long-term strategic goals, namely to be present as players on the Chinese market 47. For these companies the improvement of the legal framework is of crucial importance 48.
39 For its part, the state enterprise system of production is destined to continue. This is not because of any economic logic, but because of a decision to support them for political and social reasons. For these enterprises, modernisation is still on the agenda. Until now, the modernisation of the state sector enterprises has only been considered from the angle of the ownership of capital. It has been just a question of share sales, financial takeovers, and debt cancellations. But for the state enterprises themselves, as for the banks, productivity remains a key question. This involves improvements in management efficiency, the introduction of planning capabilities, the development of the engineering and R&D side, and the ability to actively adapt and improve products and procedures. All these aspects of innovation seem to us not merely useful but absolutely necessary. What is at stake is not the present sharing of the diminishing pile of goodies, but increasing these firms’ capacity to produce real value.
40 In the immediate future, the new systems of production will still need to feed the political structure and the state enterprises financially. But they are no longer capable of sustaining the national growth by themselves. To achieve this, a new wave of investments must be encouraged. If growth is to continue in the future, new systems of production will have to appear on the scene. Moreover, the different systems of production will find themselves increasingly engaged in collaborative activities.
41 It is too soon to foretell whether a business ethos will take root in China, along with its accepted norms to underpin mutual trust. There is nothing in the present behaviour of those involved which would allow us to believe that there will be a real crystallisation of the private sector in China along these lines. Nor is it possible to believe that the present generation of entrepreneurs will distinguish themselves by their ethical choices. But it is possible that, under pressure from foreign competition, better distribution networks and a greater market sophistication may be introduced. If so,
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some enterprises could be encouraged to undertake bolder ventures. All this presupposes solid support from the state, linked to a strategy for the various sectors, and to thorough-going training schemes, as the examples of Japan and South Korea amply demonstrate. Sustaining growth has to go through a strengthening of the systems of production currently in place.
NOTES
1. We would like to thank Professors Cai He, Qiu Haixiong, Wu Nengquan, Xu Yong, Jean Ruffier, Gilles Guiheux (is this the correct spelling?), and Sophie Faure, in addition to two careful anonymous readers of this article, for their many helpful discussions and reflections on China’s social and economic development. The research involved was conducted through joint collaboration between the IRD (Institut de Recherche pour le Développement) in France, the Guangdong Institute for Research and Development (ZURIGuD), and the Centre Franco-Chinois de Sociologie de l’Industrie et des Technologies (Zhongshan University, Université de Lyon-3, and the IRD). The opinions expressed are our own. A preliminary draft was a paper presented to the seminar on “Ethics and productive efficiency” at the University of Lyon-3, in January 2003. 2. See Justin Yin Yifu, Cai Fang, and Li Zhou, Le miracle chinois, Stratégie de développement et réforme économique [The China Miracle], Paris, Economica, 2000. 3. The view of this growth as miraculous arises from a macro-economic perspective. See Robert E. Lucas’ lecture, “Making a Miracle” in his collection Lectures on Economic Growth, Cambridge, Mass., Harvard University Press, 2002. 4. There is a large body of literature on Asian economic development. On Japan, see in particular Ian Inkster’s excellent book, Japanese Industrialisation 1603-2000: A Global and Analytical Approach, London, Routledge, 2000; and on South Korea, A. Amsden’s Asia’s Next Giant: South Korea and Late Industrialisation, London, OUP, 1989. 5. Ezra Vogel, One Step Ahead: Guangdong Under Economic Reform, Cambridge Mass., Cambridge University Press, 1989. Since the publication of this work, many others have also shown the persistence of certain economic and social structures. Cf. Thierry Sanjuan, A l’Ombre de Hong Kong: le delta de la rivière des Perles, Paris, L’Harmattan, 1999. 6. A critical overviewof the role of politics in Asia is to be found in the collection by Henry S. Rowen, Behind East Asian Growth: The Political and Social Foundations of Prosperity, London and New York, Routledge, 1998. 7. Jean Ruffier, L’efficience productive: comment marchent les usines, Paris, Editions du CRNS, 1996. 8. This is just an indication of the main thrust of our research at the Centre franco-chinois de sociologie de l’industrie et des technologies de Canton. 9. Cf. Barry Naughton, Growing out of the Plan: Chinese Economic Reform 1978-1993, Cambridge, CUP, 1995. 10. See China Statistical Yearbook 2000. 11. These special economic zones were established in the early 1980s, but their major expansion occurred in the 1990s. 12. Not completely, by any means. Wages bills are higher in the other Asian countries than in China.
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13. Cf. the work of Guilhem Fabre, which shows nonetheless that the growth in real estate sales, encouraged by various means, has still been unable to efface the effects of the property bubble brought about by speculation in land values; Guilhem Fabre, Le miroir chinois de la transition: Genèse d’une crise 1989-2000, Paris, L’Harmattan, 2000. 14. Alwyn Young, A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore, NBER Macroeconomics Annual, MIY Press, 1992. 15. Paul Krugman, The Return of Depression Economics, London, Allen Lane, The Penguin Press, 2000, pp. 32ff. 16. A good journalistic account of the various opinions on the economic and political future of China is to be found in Gordon G. Chang, The Coming Collapse of China, New York, Random House, 2001. A recent special issue of the China Economic review, December 2002, Vol. 13, No. 4, also addresses the issue. See in particular the catalogue of problems drawn up by Thomas Rawski in “Will Investment Behaviour Constrain China’s Growth?”, ibid., pp. 361-372. There is a fiercely critical analysis of the economic reality in China by He Qinglian in “China’s Listing Social Structure”, New Left Review, No. 5, 2000, pp. 69-99. When this was republished in China, in the review Shuwu (Changsha, March, 2000), it cost the author his professorial post. 17. Gilles Guiheux (as above), “The Incomplete Crystallisation of the Private Sector”, China Perspectives, No. 42, 2002, pp. 24-35. Strictly speaking, collective enterprises do not include private enterprises, but actually a good many collective enterprises are “lent” to a private enterprise management team. Often the most important enterprises are to be found in this category. 18. In nine sectors the total output increased in value by 10-15% per year; these were domestic electrical goods, hand tools, paper, domestic chemical products, organic chemicals, furniture, textiles, agricultural products and beverages, and coal and ferrous metals. 19. Collective enterprises, but also shareholder enterprises which took over from the collectives after the change in the law in 1998. 20. The “Own Equipment Manufacture” is an arrangement which allows the supplier to become an integral part of the customer’s productive system, as though the parts were produced by the customer himself. 21. See Haixiong Qiu, Establishing Nanhai as a Technology Model City, Canton, Research Institute for Guangdong Development, 2001, p. 234. 22. Sanlai or “three resources”; these are the raw materials, the parts, and the samples provided by the foreign investor. Yibu designates the repayment by the local enterprise to the foreign investor in the form of the finished products. 23. In Dongguan, as in the rest of the province, the impossibility of setting up private enterprises at the time led to the flow of local investment into joint enterprises, thus showering the Hong Kong investors with an additional layer of riches. See the work of Huang Yasheng on foreign investments in China during this period, http://www.people.hbs.edu/yhuang. 24. Under the Own Design Manufacture arrangement, the supplier designs his own production methods while still retaining the designation as supplier to a foreign customer. The most systematic study of the training delivered by this technological upgrading is provided by Garay Gereffi, “International Trade and Industrial Upgrading in the Apparel Commodity Chain”, Journal of International Economics, No. 48, 1999, pp. 37-70. 25. This phenomenon can also be observed in the border regions of northern Mexico, where the maquiladoras developed from being simple low-cost assembly plants to become more complex systems of production, participating in the international flows of capital and commodities: the latter are in turn the source of investment capital for the factories located in Mexico or other foreign countries. Not only have the maquiladoras changed in form and function, but they have become part of a truly innovative economic and technological dynamism. Cf. Daniel Villavicencio, “Le développement des maquiladoras du Nord Mexique et l’importance des réseaux
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binationaux d’innovation”, a paper given to the IRD seminar, “Savoir et développement”, Paris, January 27th-28th, 2003. 26. It may well be that the current advantage enjoyed by Shanghai over Guangdong is due to the availability of skilled labour. In Shanghai, foreign enterprises seem to occupy the more sophisticated sectors like pharmaceuticals. What we are witnessing is perhaps less the growth of a capacity for autonomous development in this region than the expansion of Foreign Direct Investment in the technology-intensive sectors. 27. The more heavily industrialised areas bring about the dismantling of industries in the less advanced areas. This phenomenon, first noted in the case of the nineteenth century European industrialisation, is being repeated nowadays. Currently the “winning” areas are those which have invested heavily in new technologies, even within the traditional industrial sectors. Cf. Georges Benko and Alain Lipietz, Les régions qui gagnent, Paris, PUF, 1992. 28. This has again been verified by a recent enquiry on behalf of French firms, headed by the “Mission Economique de Canton”; see the Report by Verillaud, “Les investissements étrangers en Chine”, Mission Economique, Canton, April-May 2002. See also Xavier Richet, Wang Hua, and Wang Wei, “Foreign Direct Investment in China’s Automotive Industry”, China Perspectives, No. 38, 2001, pp. 36-42; and S. T. Walsh et al., “Direct foreign manufacturing investment decisions for China”, Engineering Management Journal, No. 11, 1999, pp. 31-39. 29. According to informants in January 2002 in Shuikou, a Guangdong industrial centre for the production of plumbing installations, and in December 2002 in Jiangmen, in a collective enterprise producing washing machines. The traditional clientele served by the major industrial research centres has always been the large state enterprises. 30. Jean-François Huchet, “Concentration and the Emergence of Corporate Groups in Chinese Industry”, China Perspectives, No. 23, 1999, pp. 5-17. 31. Here we have in mind the great number of research and technical development centres. Cf. Gu Shulin, China’s Industrial Technology, Routledge, 1999. 32. We are referring here to works like Alain Caillé’s Critique de le raison utilitaire, Paris, La Découverte, 1988; or S. Rosefielde, Comparative Economic Systems: Culture, Wealth, and Power in the 21st Century, Oxford and Harvard Mass., Blackwell, 2000. 33. For institutionalist economists, this amounts to trust in institutions. Cf. Douglas C. North, Institutions, Institutional Change and Economic Performance, Cambridge, CUP, 1990. 34. Cf. Karl Polyani, C. Arensberg and H. Pearson, Trade and Markets in Early Empires, Glencoe, Il., The Free Press, 1957. 35. Thomas Rawski, “China Reform Watch: Turning Point Looming”, China Perspectives, No. 38, 2001, pp. 28-35. 36. This point of view was also maintained by academics in the United States, like Cui Zhiyuan or Gan Yang. 37. See Hui Wang, “Fire in the Castle”, New Left Review, 2000, pp. 69-99; he discusses the debates conducted by Chinese intellectuals connected with the board of the journal Dushu, and their more or less complete support for so-called “liberal” views in the 1990s. 38. If these are not always failures, they are at least vulnerable. Yang Bing, one of the richest men in China, and an exemplary model, is currently in jail. 39. This provides a component of what Guilhem Fabre calls the “new ‘new class’”. 40. See Jane Duckett, “Bureaucrats in Business, Chinese-style: The Lessons of Market Reform and State Entrepreneurialism in the People’s Republic of China”, World Development, No. 29, 2001, pp. 23-37. The bureaucracy is very far from being inactive, and the state enterprises by no means live only on the crumbs thrown to them by the central government. On the contrary, such enterprises and local officials are veritable instigators of highly profitable commercial activities. The same point is made by Jean C. Oi, see “The Role of the Local State in China’s Transitional Economy”, The China Quarterly, No. 144, 1995, pp. 1132-1150. The concept of “local state
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corporatism” has enjoyed great success in throwing light on the economic operations of the political bureaucracy. A recent application of this idea to the situation in Guangdong is to be found in Qiu Haixiong and Xu Jianniu’s forthcoming article in Chinese, “Analysis of the Guangdong industrial clusters as examples of ‘local state corporatism’”. 41. Discussion of this topic has largely dried up, at a time when corruption is more on the agenda than ever, and when the government is launching campaigns for administrative probity. 42. Several businessmen have told us of cases of pressure, misappropriation, and falsification of invoices, which are sometimes life-threatening. 43. One of our team recently visited a pharmaceuticals firm in Shanghai, and they clearly confirmed that their main worry did not arise from the presence of American firms but from a small private competitor of this sort in Fujian. Nearly all of the private firms that we have visited brought up price undercutting as the only major threat. 44. This competition is the main source of their problems. See Dong Xiao-yuan and Louis Putterman, Investigating the Rise of Labor Redundancy in China’s State Industry, Working Paper No. 00-9, Dept. of Economics, Brown University, June 2000. 45. At another time and in different terms, Cornelius Castoriadis called this the social “imaginary”. See Cornelius Castoriadis, The Imaginary Institution of Society (1975), tr. Kathleen Blamey, Cambridge Mass., MIT Press and Oxford, Polity Press, 1987; (pb. ed. 1997). 46. Through our own on-the-spot investigations, we are attempting to obtain precise data on these obstacles to growth. 47. Pien Wang, Kulwant Singh, and Wenfeng Tong, Determinants and Outcomes of Knowledge Transfer: A Study of MNCs in China, Singapore, Best Paper Proceedings, Academy of Management Conference, 2001. 48. The importance of the stakes here is reflected in Jefferson’s hope that changes in the legal framework will be brought about by pressure from international agreements. See Jefferson, “China’s Evolving (implicit) Economic Constitution”, op. cit.
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General Public Policy and Development Strategy The Chinese state in perspective
Chen Sheying
1 The purpose of this article is to seek a comprehensive understanding of China’s development and the role of public policy by addressing some fundamental theoretical and practical issues1. A comparative perspective is provided by reflecting on the idea of the welfare state in developed nations and revisiting and contrasting the case of the Chinese economic state2. Arguing that Third World experience is under-represented in social policy studies at the same time as the focus/emphasis on the “social” or “welfare” in public policy may have contained a Western bias, the article reintroduces analytical framework of a policy system conceived by Robert Morris3. The long neglect by policy study of a guide to the priority aims and preferred means of a policy system is shown, and we highlight a recent groundbreaking effort to identify different general public policy patterns which dismiss the welfare state as the paradigm for public and social policy study. The difference between general public policy and development strategy is made clear, and the true meaning of a “developmental state” is clarified under the new comparative framework. A historical perspective is further presented by illuminating the processes of politicisation and de-politicisation of the Chinese economic state that has always zigzagged between developmental and non- developmental paths4. There is a need for people to monitor and prevent government public policies from following non-developmental paths, as it is important within economic development for both economic and welfare states to learn from each other as they constantly rebalance their policy foci. Implications for China’s future development are discussed. Welfare state and social policy 2 Although developed nations are hardly the central focus in development studies, they do serve as examples of advanced states of development, as the word “developed” naturally suggests. In the developed world, public policy dialogue has featured an overarching theme and (once) a shared social ideal, i.e. the welfare state, although nations had different tales to tell of their experiences of it5. After its rise and its fall,
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within a hundred years, what a welfare state actually is, however, has become increasingly uncertain, and its true meaning remains illusive and little scrutinised.
3 What are we really referring to when we talk about a welfare state? In very simple terms, we may just mean the social (welfare) functions of any government. However, we would tend to exclude a good many nations when we come to decide which could be considered welfare states. It seems that the label has a more symbolic meaning. Although the real picture is not always as rosy and just as the ideal implies6, this kind of state plays a pivotal role in promoting the welfare of its citizens, while the provision of welfare carries major weight in state affairs. This conception has to do with the relative importance allotted to the various functions of a government. Calling a country a welfare state does not mean, however, that the state does not care about the country’s economy, politics, defence (or warfare) or other kinds of public affairs. But it does indicate an outstanding position adopted by the state on welfare provision in the light of historical and cross-national comparisons.
4 A review of Morris’ framework of a policy system is in order here. By taking social policies as guiding principles for public action, Morris discerns several elements or dimensions that affect both their evolution and implementation. These include: a) a society’s aspirations or goals; b) social norms or “societal policy”; c) a guide to the priority aims and preferred means of the policy system, or “general public policy”; d) sectoral public policy (e.g., income security, housing, health, personal social services, the family domain, and the aged); e) the leadership role played by governmental units in moving beyond or modifying social norms; f) advocated vs. adopted policy; and g) criteria for assessing policy guidelines (e.g., charity vs. rights or middle-class viewpoints, and distributive-regulative vs. redistributive)7. While there may be some problems with the completeness and logical arrangements of this framework, the concept articulated by Morris of a “general public policy” as a guide to the priority aims and preferred means of the policy system is of particular interest. A review of the literature indicates that, while issues on other dimensions or elements have been extensively studied, this aspect of the policy system has received little, if any, attention from policy and other researchers, including Morris himself. Yet this guide is so important that an inquiry that is blind to general public policy may simply cause confusion in cross-national studies. In practice, the world must pay most serious attention to this if it is to avoid repeating the numerous tragedies caused by state policies throughout human history.
5 As the welfare state has taken centre stage in public policy dialogue in the West, the field of social or welfare policy has often been placed in the spotlight. For many Third World countries, however, it seems that neither the ratios of social spending nor the foci of attention of their governments prove the idea of a welfare state as pertinent to their practice. Therefore, the welfare state should only be regarded as a particular rather than universal general public policy. Policy researchers are thus faced with the fundamental task of identifying other general public policy patterns that have also existed. Yet while the Third World is frequently the subject of development studies, it has carried little, if any, weight in social policy discourse, even in a new theoretical framework as broad and influential as the “three worlds of welfare capitalism” introduced by Esping-Andersen8. The economic state and the case of the PRC
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6 The issue of under-representing the Third World in social policy may not only hold back its development but also leave the welfare states helpless for the lack of comparisons and alternatives, as is the case when under-representing the latter in development studies. As a result, a more comprehensive guide for public policy and development study may never be found. The issue is particularly bothersome when dealing with socialist-communist states and those in transition from socialism- communism. Many researchers have explicitly limited their discussions about the welfare state to (mainly) capitalist societies9, and Esping-Andersen notes that a social order such as state socialism “has little use for a welfare state”10. However, not all have implied that the welfare state is not applicable to socialist-communist societies. Some have simply used the term(s) “(socialist) welfare state” in their study of Third World countries, despite the unresolved theoretical troubles of the welfare state in the West11.
7 No new conceptual model promising more relevance to the development of the Third World was available or taken seriously until the “economic state” was uncovered12. The economic state is not just another label, nor simply a different societal ideal. By examining the PRC as a particular, socialist example, the uniqueness of the typical economic state has been revealed in terms of fundamental differences, when compared to the welfare states, in its policy system as well as socio-economic and governance structures/functional prescriptions. For instance, the Chinese classical socialist economic state showed evidence of domination by a wide variety of economic departments, which represented major structural differences from any welfare state government. The economic state can also be defined in functional terms as a state in which the economy is promoted largely by the organised efforts of the government rather than by private institutions. In other words, it is a state that assumes primary responsibility for the development of the economy (just as the ideal welfare state does for social welfare). The label “economic state” points to the fact that the state plays a pivotal role in promoting the economy, and economic administration carries major weight in state affairs. To know why social welfare policy was so underdeveloped in a socialist country such as China, one must further understand the economic state from the standpoint of a Stalinist “big push” development strategy13. That strategy places top priority on developing the economy, particularly the means of production or the advancement of “heavy industry”14. Other state affairs, such as social welfare, had to be justified by their role in helping to promote productive forces and/or developing the economic infrastructure. Understandably, the main way of providing social welfare was through a model “perfectly” integrated with the economy, which in China was a welfare system based almost completely on occupation—or danwei (work unit) 15—that went beyond the wildest imaginings of Mishra concerning an integrated welfare state16.
8 In sum, just like the welfare state, the economic state is also about the relative importance of various functions of a government, but its priority aims and preferred means are economic (or, when applied to people, work-related). It suggests that, by historical and cross-national comparisons, the state has adopted an outstanding position on economic administration. This position, in turn, affects policy and development in other areas, particularly in the social (welfare) sector. Developmental(ist) vs. non-developmental(ist) states: Importance and further analysis of general public policy
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9 In view of the dilemmas arising in the practice of Western welfare states and the many unanswered questions concerning developing nations, the significance of the discovery of the economic state general public policy can hardly be overstated. Yet that significance does not stop there; as we continue to examine and reflect on other general public policy patterns in world history, clarification is lent to the difference between a general public policy and a development strategy.
10 Compared with a “development strategy”, a general public policy does not take development for granted, as that universal assumption could be misleading. In real terms, presuming that development (in its typical sense) always proceeds in the interests of a government may not only be ignorant but also dangerous. In other words, the existence of non-developmental or even anti-developmental general public policies must be recognised and their causes carefully studied so that they may be prevented or stopped. In addition to the impact of various and conflicting political interests, the irrational aspects of policy-making, the role of misinformation, misunderstanding, and the emotional reactions of individuals, groups and society as a whole that affect the general public policy of a state have recently been pointed out17. In China, for example, the party-state has made (and, albeit reluctantly, admitted) many major mistakes that went against its own interests. The most fundamental, if not implicit, of these was to stray from its main mandate as an economic state. In general, development as an implied purpose, either in the economic or social sense, for a nation-state is not always valid, hence the world dichotomy between “developing” and “developed” countries. In that sense, the economic state and the welfare state may both be considered developmental states, while the warfare and political-ideological states tend to be non- developmental or counterproductive in nature. While it is possible to debate the general public policy of any state, it is only in the cases of developmental states that we can discuss different “development strategies”, otherwise we may just be unwittingly delivering futile talks about particular “developmental” issues. The identification of specific general public policy patterns should therefore be the first step undertaken in social policy and developmental research towards gaining a comprehensive view of the “forest” before we end up surrounded by the “trees”.
11 While “priorities” and “preferences” may appear to be minor technical concerns in certain fields, their consequences in public policy can be grave and devastating and their causes may be complex and hard to alter. Eventually, the states themselves will have to reap what they have sown. For example, the political-ideological orientation of the world’s socialist-communist states at their birth was not totally unreasonable since most of them were conceived in war and revolution, but its prolonged domination by a merciless dictatorship left little room for development. The Soviet Union and its Eastern European allies ended as the “communist empire” broke up and they dumped the Marxism-Leninism they had practised for decades—a sad story indeed for the international socialist-communist movement. In China, the intense politicisation of the economic state also brought the country to the edge of collapse. The signs of crisis had repeatedly prompted the government to attend to its main responsibility, that is, economic construction. However, it was only after Chairman Mao’s demise, with his successors envisaging the total failure of the Cultural Revolution, that the window of opportunity to “transfer” its focus to economic work was opened. The expected and unexpected successes of de-politicisation and economicisation, in turn, reaffirmed the new leadership’s conviction in an out-and-out economic state (even though reform
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immediately started a structural and functional de-economicisation). Indeed, the achievements of the opening up and reform policies since 1978 would have been impossible without a determined general public policy focusing on economic construction (instead of the repetition of political crusades such as the Cultural Revolution once every few years, as Mao had speculated). It seems that a timely adjustment of the state’s general public policy is a matter of life and death. The implementation of a general public policy will have its effect over time and in the long run control the lot of the state. Historians may see socialism in China as having failed completely, but at least the Chinese case shows that the failure was largely attributable to the damaging politicisation of its general public policy, or poor politics, while the economic state and its state-dependent economic system never really enjoyed a good chance of being systematically tested. (This does not mean that economic reform was unnecessary, but the situation could have been very different if the state had functioned fully as an economic state from the start.)
12 From the lessons of non-developmental vs. developmental public policies, we can draw two conclusions. The first is that, when evaluating and predicting a policy system, we will not arrive at a germane understanding and sensible conclusion unless and until we have analysed its general public policy. After embarking on the reform path, the Chinese state has probably faced no less criticism than before for failing to eliminate, and perhaps even for generating more, social issues, including increasing inequality, stagnating political progress, and diminishing social protection of its citizens18. However, the economic state has impressed the world with a stunning and continued high growth rate. And, after two decades of almost exclusive focus on the economy, it has put itself in a position to be able to address those social issues more actively (although that approach is still likely to be combined with economic interests)19. De- politicisation has already improved Chinese political life by reducing the impact of bad politics (although changing it to little or no degree despite the party-state’s increasing efforts to fight corruption and at limited political reform). If re-politicisation is required to pursue democracy, it may also reopen the door to bad politics. In that sense, re-politicisation contains both great opportunities and enormous dangers that have the potential to push China forward or roll the country back on its road to development, particularly when people are unprepared for it. It should be noted that establishing a focus on the economy was never easy, and was almost tantamount to a regime change. Upholding it could prove even harder. Indeed, the post-Mao leaders have had to be very resilient in the face of strong resistance from the Leftists as they have sought to get rid of the old political-ideological state and stick to its new general public policy as an economic state, although the process (and the need for “stability”) has undoubtedly also repressed democratic political activists. That determination of policy, drawing on the painful past experience of lost economic opportunities (as well as on current personal, factional and Party interests, etc., of course), can be considered the most fundamental “Chinese characteristic” of the recent development. Indeed, to develop the economy the leaders have left no stone unturned, even at the cost of other aspects of social life, including encouragement for everybody “jumping into the sea” (going into business). Many post-communist countries, including Russia20. are no less open, reformist and capitalistic than China in recent years, but the remarkable differences in the respective economic outcomes should be attributed, at least in large part, to the differences in their general public policies. Without persistently putting its shoulder to the economic wheel with hard-devised strategies that will assure victory, a
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reformist leadership may accomplish no more than lip service, or disservice, through endless economic and political chaos.
13 The second point is that people and future leaders should be educated about the importance of the general public policy of their state so that they may closely monitor and influence policy at that high level with a keen awareness and thus prevent it from falling into non-developmental paths. This can be done in multiple ways, including structural alterations in the government, changes in state spending priorities, and ideological shifts in leading/misleading the public. The point is that no matter how important a general public policy is to politicians, it is the people that have the highest stake in it. In this regard, the notion of development as a right declared by the United Nations in 1986 should be heeded21. Recently, for instance, some figures who questioned the move by the United States towards war against Iraq were pressured off the political scene. This is not surprising even in a Western democracy if the concerns were considered only as particular, sectoral policy-making issues with immediate consequences in international relations. However, if they were expressed in terms of the general public policy and whether the country would be led down a non- developmental path, then the close monitoring and questioning would be fully legitimised. As the people have the right to development, they have the right to be concerned about the general public policy of their state and of other states in the world, for these will no doubt affect their lives in a global environment. In his examination of the limitation of national interventionism in the United States, Waddell notices that in the 1980s there was a revival of a strong warfare/weak welfare paradigm for state power22. The concern in the case of Iraq is, on the surface, one of whether the Iraqi general public policy is anti-developmental in both a national and international sense and whether a regime change could be justified, as in Afghanistan, and how. The deeper issue is whether warfare will take control of the general public policies of the nation-states and bring about more rather than fewer non-developmental cases or periods23. This discussion would be more meaningful than general talks on peace vs. war24. Another example is that the American media is also accustomed to something called the “China threat” in the military sense. From the perspectives of general public policy and the economic state, however, the real threat in the post-Cold War environment has become an economic one, ever since China switched to a “strong economy/weak politics/weak warfare” paradigm for state power. The most obvious evidence is its ending of the Cultural Revolution and its bold measures to unilaterally cut its armed forces (by one million under Deng Xiaoping and half a million again under his successor Jiang Zemin). While the American state is devoting much of its attention to warfare and ideological issues such as human (political) rights, the depoliticised Chinese state has focused almost exclusively on “economic construction” by emphasising (economic) development as a human right and, albeit implicitly, the right of the economic state. It is predicted that the GDP of China will surpass that of the United States in 30 years25. This difference in the general public policies of the nations will not be able to facilitate the process unless changes (forced or conscious) take place in either or both of them. Welfare state vs. economic state: The issue of “isms” vs. emphases 14 The welfare state and the economic state, as well as the warfare, political and ideological states, reflect different guides to the priority aims and preferred means of the policy system. The question is how selective emphases on political, economic and
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social ends and means characterise a nation’s public and social policy. The study of general public policy is first concerned with the non-developmental vs. developmental nature of a policy system. Although there is always a mix and no pure pattern will be found in reality, some theoretical archetypes (e.g. the warfare, political-ideological, welfare and economic states) and practical paradigms (e.g. the American strong warfare/weak welfare and the post-Mao Chinese strong economy/weak politics models) can be identified. It should be noted that the recognition of different general public policy patterns, particularly the classification of practical paradigms, may be a matter of academic controversy and even political confrontation. For instance, some Americans and others may argue that American governments often, if sometimes forced to, put at least moderate emphasis on the stimulation of economic growth. Likewise, the United States is also strong on ideology and politics, hence a potentially more complex but pertinent public policy paradigm of strong warfare/strong ideology- politics/moderate economy/weak welfare for state power. It should also be noted that the meaning of the theoretical archetypes and the characterisation of practical paradigms are constantly changing or developing, as should our understanding. For instance, the Chinese economic state has been attributed very different importance in the post-Mao era compared with the Mao era. Its practical policy paradigm shifted from strong politics/vague economy and welfare (so to speak) to strong economy/weak politics/weak warfare/weak welfare/weak everything else (though after a two-decade- long focus on the economy, the state is now in a better position to get strong in the other areas). Moreover, although it is common sense that economy and welfare are important in development (in different ways) while politics/ideology and warfare can be detrimental to it, their characterisation of the policy system, as they represent the dominating general public policy, cannot be taken straightforwardly as developmental or non-developmental. There are just and unjust wars, and politics may hinder or liberate productive forces. For instance, although confrontations are often costly (and destructive), while they are overbearing they will seldom gain appreciation and reciprocal benefits (even in cases where international policing or peace-keeping is needed)26. However, from a long-term point of view, there is historical evidence that the economic and welfare states can be considered developmental states while warfare and political-ideological states are non-developmental or counterproductive.
15 The economic state and the welfare state as different general public policies can therefore be considered as having different development strategies. Because of the importance of the general public policy in its effect on all sectoral policies, the problems we face in developmental studies are firstly issues confronting the different policy paradigms. Here we are not talking about different “policy regimes”. The Chinese case shows that de-politicisation has largely resulted in the ideological issue of socialism vs. capitalism giving way to a practical concern over emphases (priorities and preferences) and balances in the strategic plans of the nation for development, particularly in view of Deng’s will concerning “no argument”27. The Party-state has shifted away from doctrinaire communism to a “socialist road with Chinese characteristics”. Chinese communists, of course, would hardly accept such a label as pragmatism for what they have been doing, though switching from dogmatism to pragmatism was necessary for de-politicisation. Today’s pursuit of this socialism with Chinese characteristics, with the emphasis on “Chinese characteristics” rather than on “isms”, is a result of the simply too high historical price the state has paid in the past.
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16 Western welfare states are at a similar crossroads28. While a claim of “the end of ideology” is hardly ever true, there has been a consensus that the welfare state is in trouble and that the deep-seated issue is firstly economic rather than ideological. This serious developmental issue has led to a Western-wide movement towards welfare reform, which is also part of the reason why China will not become a welfare state, at least in the near future. In the United States, both Democrats and Republicans agreed to “end welfare as we know it”, and former President Clinton (a Democrat) signed the welfare reform bill into law in 1996 (the Personal Responsibility and Work Opportunities Reconciliation Act). American mainstream opinion is that “only work works”, thus the main approach to welfare reform is to move people “from welfare to work”. However, this reform has not produced its expected effects29. The key is that pro-work welfare reform requires a good economy30. In fact, the idea of workfare is nothing new, and the reliance on behavioural change has never been successful in addressing welfare as an economic issue. If we look at China, the lesson is different but bears on the same point. Just as the dilemmas of the welfare state have led to welfare reform, the problems of the economic state have led to economic reform. Yet the Chinese experience shows that work has not worked, as putting all the people into an overstaffed economy and getting them to “eat out of the same big pot” only held down productivity. In a sense, the Chinese approach to economic reform by accepting unemployment and emphasising the building of a differentiated “social security” net in terms of a “serialised reform” (rhetorical at the beginning but more serious recently) can be characterised as a movement in the opposite direction—“from work to welfare”. Although China has headed towards a “socialist welfare pluralism” without a state welfare system comparable to its Western counterparts31. the Chinese experience provides important suggestions from the other end of the scale as to how far Western welfare reform can go. Studies of socialist welfare in Eastern Europe also contain similar implications32.
17 In a sense, the Chinese economic reform was a successful welfare reform, as it firstly separated statutory welfare from the economy and started treating business as business—with phenomenal results33. In contrast, Western welfare reform has not been a successful economic reform since it has not found an effective way to link welfare with work. This certainly has important implications for Mishra’s differentiated and integrated welfare models in terms of which one is actually more feasible and advantageous34. Yet the broader lesson to be shared by the welfare and economic states is that welfare reform and economic reform must go hand in hand. And the primacy of the economy in development must be recognised and reflected35, however differently, in the general public policies or development strategies of both economic and welfare states. In this regard, a concern over the preoccupation among Third World states with “economism” and the focus of the United Nations on social as opposed to economic development36, although they certainly have a point to them, may also mirror a “Western ethnocentrism” that has not proven very helpful to either the Third World or the welfare states themselves. The future of the welfare and economic states and the “socialist road with Chinese characteristics” 18 As a result of the seemingly irresolvable crisis, some Westerners have already declared the end of the post-war welfare state37. Others talk about its resilience in the face of current challenges38 and argue that the welfare state will continue to spread around
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the world39. These declarations, however, can hardly be fruitful without a new path being mapped out for the economic future of the welfare state. In this regard, attention needs to be paid to a recent effort that attempts to (re)introduce to social policy in the West the idea of development in its basic economic sense. Some do it through promoting “positive welfare”40 or the building of a “sustainable welfare state” 41. Others explore the possible ways out open to the welfare state in terms of various “third ways” (between capitalism and socialism, or a “right mix between the private market and state intervention”)42. Among the scholars, an outstanding advocate of the developmental approach to the future of the welfare state is Midgley43. This approach gives a new meaning to social development that is not opposed to but combines social welfare with economic development, resulting in such innovative ideas as developmental social programmes or “developmental welfare”. These concepts engage the economic notion of social capital that is adapted from the welfare idea of social support networks44. By illustrating the case for and against the redistribution of social welfare and the current hegemonic influence exerted by neo-liberalism on social policy, Midgley highlights the emphasis placed by social development on productivism and social investment and illuminates a comprehensive strategy for promoting social welfare45. This strategy of redistribution through social investment involves the following aspects: increasing cost effectiveness in social welfare, enhancing human capital investments, promoting social capital formation, developing individual and community assets, facilitating economic participation through productive employment and self-employment, removing barriers to economic participation, and creating a social climate conducive to development. This groundbreaking effort actually transforms the meaning of social welfare and constitutes a rather radical proposal for a shift in the general public policies of developed nations from a typical redistributive welfare state to a new focus on social investment that facilitates, rather than impedes, economic development. This proposed departure from the welfare state represents, in a sense, a step towards the economic state, and here the experience of Third World development becomes highly relevant. This down-to-earth approach, in turn, provides a better example for the Third World to follow in advancing its welfare arrangements, not with the old redistributive welfare state nor in the neo-liberal sense of development, but in accordance with its primary concern about the economy coupled with a desire for matching social improvement.
19 On the other hand, the case of the PRC is the history of the extreme politicisation and then de-politicisation of an economic state that has finally embarked full speed ahead on development, which has taught the leaders a fundamental lesson about not allowing their general public policy to revert to a non-developmental path via re-politicisation. Bearing in mind the painful losses China now realises it suffered and a current urgent need to catch up with the rest of the world, Chinese general public policy will continue to be implemented in such a way that China remains a determined economic state for the foreseeable future. Nevertheless, there has been a rapid process of de- economicisation among central and local authorities as a result of economic reform, which, coupled with the ongoing de-politicisation, may be considered a gradual deconstruction of the Chinese state in recent years. However, as suggested by its success in the past two decades, the primacy of the economic state in development must be maintained by the constant rebalancing of public policy foci to achieve goals, which is instructive not only for the Chinese but also for the welfare states. To deal with various social issues in development, the economic state can also learn from the
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historical lessons of the welfare states, including the new trend towards “developmental welfare” in the West.
20 The Western and Chinese stories of their welfare and economic states show that they have somehow moved towards each other from opposite positions, (e.g. “from welfare to work” and “from work to welfare”). Although it is unlikely that they will share the same ideal dynamic point of balanced socio-economic development—because of the various structural-functional and economic, political, social. and cultural differences— the welfare and economic states as different development strategies certainly can and should learn from each other. For example, by comparing China’s planned socio- economic change with that of the West, a lesson can be learned that economic reform and social (welfare) reform must go hand in hand.
21 PUBLIC policy study has suffered from a lack of models and frameworks suited to Third World development on the one hand and the impasse in the Western welfare state on the other. In order to obtain a comprehensive understanding of this, Morris’ framework of the policy system is reviewed and a theoretical breakthrough is indicated by identifying different general public policy patterns as different guides to the priority aims and preferred means of a policy system. The Chinese case is conceptualised as an ever-changing economic state, and the welfare state as the policy or development paradigm is seriously challenged. The economic state and the welfare state reflect the relative importance of economy/welfare in state affairs. An international and historical view is required to understand and apply these models. The practical paradigm of the Chinese state in the post-Mao era is further spelled out as strong economy/weak politics, in contrast with the US strong warfare/weak welfare paradigm. These can be expanded as a post-Mao Chinese policy orientation towards strong economy/weak everything else (e.g. politics, warfare and welfare) set against the pattern for the United States that is characterised by strong warfare/strong politics-ideology/ moderate economy (compared to China)/weak welfare. The difference between development strategy and the general public policy is indicated, and the importance of studying different and conflicting general public policies is underscored. In evaluating and predicting a policy system, a germane understanding and sensible conclusion is impossible unless and until we have analysed the general public policy of that system. By recognising warfare and political-ideological states as likely to have non- developmental or counterproductive general public policies, the meaning of a “developmental state” can better be understood under the new comparative framework. The economic state and the welfare state, where variations require further scrutiny, classification and quantification, represent different development strategies. They need to learn from each other. Further, there exists a right of development and a need for people to monitor and prevent government general public policies from moving onto a non-developmental path.
22 These inquiries and findings have significant implications. Prior to the discovery of the general public policy, policy studies were guided by existing theories including traditional political economy. Yet for the Chinese, who practised socialism for decades, socialism became more confusing and unclear to many, as did its importance. As has been noted, Deng Xiaoping, the “designer general” of Chinese reform who was frequently labelled as a “capitalist roader” by his comrades and Westerners alike, never abandoned his communist principles. However, he was certainly disillusioned about the dogmatic “ism” that he had loyally followed and the associated ideological fights in
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which he had participated. His “white cat/black cat” philosophy made a fundamental difference to his life and to China’s fate. On the other hand, capitalism has not been able to lift all countries out of developmental and non-developmental problems (e.g. poverty and war). A focus on the study of different general public policies and the factors affecting them in all different worlds will supply much needed new insights. In real terms, world peace can hardly be assured if the world’s citizenry is not made aware of the danger of non-developmental general public policies and the true meaning of a developmental state, no matter how many democratic or peace-loving individuals we would like to recognise. Likewise, economic theories have not successfully explained various types of economic growth, stagnation and crises, despite the phenomenal advances in econometric instruments and analytical details. The fundamental issues will remain unanswered if the policy concepts and models illuminated in this article are ignored. Among these is the “Chinese secret” in development in terms of an extraordinary economy-centred general public policy that grew out of its past mistakes and its keen awareness of the urgency of fulfilling the state’s chief mandate.
NOTES
1. The author gratefully acknowledges the helpful comments of two anonymous reviewers. 2. Sheying Chen, Social Policy of the Economic State and Community Care in Chinese Culture: Aging, Family, Urban Change, and the Socialist Welfare Pluralism, Brookfield, VT, Ashgate, 1996; Sheying Chen, “State Socialism and the Welfare State: A Critique of Two Conventional Paradigms”, International Journal of Social Welfare, No. 11, 2002, pp. 228-242. 3. Robert Morris, Social Policy of the American Welfare State: An Introduction to Policy Analysis, 2nd edition, New York, Longman, 1985. 4. Sheying Chen, “Economic Reform and Social Change in China: Past, Present, and Future of the Economic State”, International Journal of Politics, Culture, and Society, Vol. 15, No. 4, 2002, pp. 569-589. 5. Theodore R. Marmor, Jerry L. Mashaw, and Philip L. Harvey, America’s Misunderstood Welfare State: Persistent Myths, Enduring Realities, New York, Basic Books, 1990. 6. Leon Ginsberg, Conservative Social Welfare Policy: A Description and Analysis, Chicago, Nelson Hall Publishers, 1998. 7. Robert Morris, op. cit., 1985. 8. G. Esping-Anderson, The Three Worlds of Welfare Capitalism, Cambridge, Polity Press, 1990. 9. Ibid.; Neil Gilbert, Capitalism and the Welfare State: Dilemmas of Social Benevolence, New Haven, Yale University Press, 1983; Norman Johnson, The Welfare State in Transition: The Theory and Practice of Welfare Pluralism, Sussex, Wheatsheaf Books, 1987.
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10. G. Esping-Andersen, “The Comparison of Policy Regimes: An Introduction”, in M. Rein, G. Esping-Andersen, and L. Rainwater, eds., Stagnation and Renewal in Social Policy: The Rise and Fall of Policy Regimes, Armonk, NY, M.E. Sharpe, 1987. 11. Ivan Svetlik, “From a One-Dimensional to a Multidimensional Welfare System”, in Bob Deacon and Julia Szalai, eds., Social Policy in the New Eastern Europe: What Future for Socialist Welfare?, Aldershot, Avebury, 1990; Pranab Chatterjee, Approaches to the Welfare State, Washington, D.C., NASW Press, 1996; Marcus J. Kurtz, “Understanding the Third World Welfare State after Neoliberalism”, Comparative Politics, Vol. 34, No. 3, 2002, pp. 293-314; Stephen Philion, “Chinese Welfare State Regimes”, Journal of Contemporary Asia, Vol. 28, No. 4, 1998, pp. 518-537. 12. Sheying Chen, op. cit., 1996. 13. Robert F. Dernberger, “The Chinese Search for the Path of Self-Sustained Growth in the 1980’s: An Assessment”, in Joint Economic Committee, China Under the Four Modernizations, Part I, Washington, D.C., U.S. Government Printing Office, 1982, pp. 19-76. 14. Sukhan Jackson, Chinese Enterprise Management Reforms in Economic Perspective, Berlin & New York, Walter de Gruyter, 1992. 15. Sheying Chen, op. cit., 1996. 16. Ramesh Mishra, The Welfare State in Crisis: Social Thought and Social Change, Sussex, Wheatsheaf Books, 1984. 17. Sheying Chen, “The Context of Social Policy Reform in China: Theoretical, Comparative, and Historical Perspectives”, in C.J. Finer, ed., Social Policy Reform in China: Views from Home and Abroad, Aldershot, Ashgate, 2003. 18. Li Xing, “The Transformation of Ideology from Mao to Deng: Impact on China’s Social Welfare Outcome”, International Journal of Social Welfare, Vol. 8, No. 2, 1999, pp. 86-97. 19. Sheying Chen, “Social Problems of the Economic State: Historical Roots and Future Directions”, China Report, Vol. 2, No. 38, 2002, pp. 193-214. 20. Joseph R. Blasi, Maya Kroumova, and Douglas Kruse, Kremlin Capitalism: The Privatization of the Russian Economy, Ithaca, ILR Press/Cornell, 1997; Linda J. Cook, “The Russian Welfare State: Obstacles to Restructuring”, Post-Soviet Affairs, Vol. 16, No. 4, 2000, pp. 355-379. 21. Arjun Sengupta, “On the Theory and Practice of the Right to Development”, Human Rights Quarterly, Vol. 24, No. 4, 2002, pp. 837-889. 22. Brian Waddell, “Limiting National Interventionism in the United States: The Warfare-Welfare State as Restrictive Governance Paradigm”, Capital & Class, No. 74, 2001, pp. 109-140. 23. Daniel Altman, “War Uncertainty Weighs on Economy”, New York Times, January 18th 2003. 24. John le Carré, “The United States of America Has Gone Mad”, The Times (UK), January 15th 2003. 25. SinoVision News, 3 September 2002. 26. Gordon Sinclair, “America: The Good Neighbor”, Congressional Record, n.d. (e-mail distribution on September 14th 2001). 27. Deng Xiaoping, “Key Points of Talks in Wuchang, Shenzhen, Zhuhai, and Shanghai (18 January – 21 February 1992), in State Statistical Bureau (SSB) of PRC, China Development Report 1996, Peking, China Statistical Publishing House, 1996 (in Chinese).
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28. Martin E. Evans, “Britain: Moving Towards a Work and Opportunity-Focused Welfare State?” International Journal of Social Welfare, Vol. 10, No. 4, 2001. 29. Kathy Chen, “After Years of Declines, Welfare Rolls Rise in 33 States Amid Persistent Recession”, Wall Street Journal, Vol. 238, No. 122, 2001, p. A16. 30. E.J. Dionne, “Pro-Work Welfare Reform Requires a Good Economy”, Staten Island Advance, January 2nd 2003. 31. Sheying Chen, op. cit., 1996. 32. Ivan Svetlik op. cit., 1990. 33. Sheying Chen op. cit., 1996. 34. Ramesh Mishra op. cit., 1984. 35. Baizhu Chen and Yi Feng, “Economic Development and the Transition to Democracy: A Formal Model”, Social Choice and Welfare, Vol. 16, No. 1, 1999, pp. 1-16. 36. Christian Comeliau, “The Development Debate”, UNESCO Courier, Vol. 48, No. 10, 1995, pp. 20-24. 37. Paul S. Hewitt, “The End of the Postwar Welfare State”, Washington Quarterly, Vol. 25, No. 2, 2002, pp. 7-17. 38. Peter Taylor-Gooby, “The Silver Age of the Welfare State: Perspectives on Resilience”, Journal of Social Policy, Vol. 31, No. 4, 2002, pp. 597-622. 39. James H. Schulz, “Why the ‘Welfare State’ Will Continue to Spread Around the World”, Generations, Vol. 17, No. 4, 1993, pp. 43-45. 40. Robert Walker, “Promoting Positive Welfare”, New Economy, Vol. 6, No. 2, 1999, pp. 77-83. 41. Maurizio Ferrera and Martin Rhodes, “Building a Sustainable Welfare State”, West European Politics, Vol. 23, No. 2, 2000, pp. 257-283. 42. John Myles and Jill Quadagno, “Envisioning a Third Way: The Welfare State in the Twenty-First Century”, Contemporary Sociology, Vol. 29, No. 1, 2000, pp. 156-168; Teresa Brennan, “Which Third Way?”, Thesis Eleven, No. 64, 2001, pp. 39-65. 43. James Midgley, Social Development: The Developmental Perspective in Social Welfare, Thousand Oaks, CA, Sage Publications, 1995. 44. John Gelissen, “Welfare States and Dimensions of Social Capital: Cross-National Comparisons of Social Contacts in European Countries”, European Societies, Vol. 4, No. 2, 2002, pp. 185-208; Sheying Chen, Measurement and Analysis in Psychosocial Research: The Failing and Saving of Theory, Ashgate, Brookfield, VT, 1997. 45. James Midgley, “Growth, Redistribution, and Welfare: Toward Social Investment”, Social Service Review, Vol. 73, No. 1, 1999, pp. 3-21.
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Book Reviews
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Catherine Keyser, Professionalizing Research in Post-Mao China – The System Reform Institute and Policy Making M. E. Sharpe, New York 2003
Jon Sigurdson
1 This book provides an illuminating insight into the rise and demise of a Chinese think tank that played an important role during that part of the reform period that came to end in June 1989. The author gives us a detailed case study of the Chinese Economic System Reform Research Institute (SRI), which was formally established in early 1985 and which by 1989 had become an important advocate for continuing reform at a time when social discontent was growing. The author portrays how a group of young researchers came to play a key role in providing an intellectual basis for the reform of Chinese society in the early post-Mao period. She provides deep insights into the background of these people and how they were able to break away from a dogmatic and doctrinaire formulation of economic policies.
2 The SRI staff were young reformers, many of them economists, who were eager to find new approaches for China’s modernisation. Abandoning the prevalent dogmatic ways of the Communist Party, they organised themselves to find and analyse facts in light of the country’s ambitions, resources and constraints. Most of them had spent time in the countryside during the Cultural Revolution, where they had become acutely aware of the great discrepancy between party policy and the real world in which the majority of Chinese people struggled. From a small group of some 20 people, the SRI gradually expanded to become a full-fledged research institute with almost 200 staff, of an average age of just 35.
3 The importance of the SRI can only be understood in the light of the legitimacy crisis from which the post-Mao leadership suffered at the time Deng Xiaoping had taken over control. The many irrationalities of the Chinese economic system had to be addressed
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and there existed no blueprint to match the desire for urgent and far-reaching reforms. Thus it was necessary to find ways to promote and make possible an open expression of reform ideas as well as policy options that did not reflect particular interests among the established bureaucracies.
4 Quick and extensive reforms were needed because of the failure of the Cultural Revolution, which had raged in China for a decade and which had, at the same time, given many people in China a new and critical perspective on the Communist Party. This is an important reason why the SRI with its young people was able to exercise such a big influence. There is a certain similarity here with Japan after 1945 when young people entered agencies and ministries and played such a significant role in shaping a new country.
5 A key event for the young reformers was a nationwide economic policy conference that took place at Moganshan in September 1984. This was the beginning of the confrontation on where to draw the dividing line between central planning and the market in order to obtain optimal results from the system reform. One of the key topics at the conference was dual pricing, a system which China adopted as one of the outcomes of Moganshan. Selected documents from the conference have been included in a valuable appendix. After the apparent partial success of the reform process in the mid-1980s, attention turned to the urban industrial areas, where the reform issues were much more complex than had originally been envisaged. Residents in urban areas, it turned out from surveys, were not ready for the proposed changes, and in late 1988 the Chinese reform movement suffered a setback: the abortive price reform in the summer of 1988 critically dented the ability of the young reformers to support a badly needed restructuring of state enterprises.
6 Before the activities of the SRI came to end in early June 1989, its staff had spread their influence among a wider circle of colleagues at other research institutes and in universities. At an early stage, the institute established contacts with researchers abroad and was able to attract necessary funding, including grants from the Soros Foundation. The SRI was merged with a conservative think tank following the 1989 events and effectively disappeared during the following year.
7 The SRI provided an important direction for the research community and the leadership that needed policy options based on solid knowledge. Thus the young staffers contributed to an understanding that research requires political and intellectual independence and that the search for truth must go beyond temporary political requirements. This book is a case study of a think tank and its ramifications for Chinese society at a time of major institutional changes. It would have been useful to broaden the frame of reference to provide a comparison with similar situations in other post-socialist countries. In this respect the reader is only given a brief reference in one of the early footnotes.
8 The author first came into contact with the SRI when one of its study delegations paid a visit to the American Enterprise Institute in Washington D.C. on a trip to the US in 1986 to learn about economic institutions. When embarking on her investigation into the SRI, the author decided on the twin objectives of understanding the young reformers and how they were able to circumvent all the bureaucracy that had previously constrained independent research and its publication. The author has been able to meet 35 SRI staff and carry out multiple interviews with most of them.
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9 The title of the book contains the phrase “Professionalizing Research”, but this is misleading if the reader is looking for an overview of the research landscape in China after the Mao era. There is for example little coverage of the Chinese Academy of Social Sciences, which was established in 1977 and from its early beginnings operated a number of research institutes covering fields that were later the focus of the SRI. However, the great contribution of the book lies in its ability to describe in considerable detail how a group of committed young researchers re-examined and modified the way in which economic research should be conducted, that is independently, and then translated that research into policy choices. Zhao Ziyang, China’s premier at the time, supported the SRI and was eager to learn from its research. The young reformers were able to put forward a new interpretation of past political events that changed the former effectiveness of certain political institutions. But perhaps their most important asset was their shared experience and their common desire to bring about much needed reform.
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Joe Studwell, The China Dream. The Elusive Quest for the Greatest Untapped Market on Earth London, Profile Books, 2002, 359 p.
Jean-François Huchet
NOTE DE L’ÉDITEUR
Translated from the French original by Nick Oates
1 IN TWELVE clear, concise and well argued chapters, Joe Studwell delivers a methodical deconstruction of the myth surrounding the China market that haunts the minds of governments and the heads of large corporations in the West to the point of obsession. Drawing on a well sharpened sense of the formula, as well as on relevant sources for his arguments, the author reveals to what extent the China market risks continuing to deceive a good number of Western investors, as has been the case on repeated occasions since China and the West first made each other’s acquaintance. The author explains with brio the psychological and economic incentives that drive Western investors to put colossal sums into a market that has not ceased to disappoint them, and we discover a mixture of amnesia and lack of critical sense regarding the political and economic situation on the part of Western business circles and governments.
2 In the first part of the book, Studwell devotes himself to describing, both from the perspective of the foreign investor and from that of the Chinese government, how the idea of an economic miracle took shape from 1978.
3 On the part of the foreigners, the author records the different postures in crisp fashion. We are presented with those who do the calculations over again — which subsequently prove suspect, without this being said loud and clear —, such as Larry Summers who, before joining President Clinton’s team, applies in a study by the World Bank a calculation of purchasing power parity that allows China to triple its per capita revenue
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by the wave of a magic wand, thus entertaining the promise of a massive solvent internal market. Then there are the professionals in the creation of myths and markets, such as the American investment bank Goldman Sachs and other financial players, who try to convince investors of the imminence of an exponential explosion of the China market. Next we find a very particular category, that of the intermediaries who expound on “the Chinese complexity”. These agents are sometimes the same as those players in the second category, or sometimes even political actors who are “friends of China”, in the image of a Kissinger who cashes in on his relations with the Chinese political elite to the tune of hundreds of thousands of dollars. Finally, there are those at the heart of big corporations and governments who succumb to the myth by investing hundreds of millions of dollars without really taking the time or the energy to decrypt China’s economic and political realities.
4 Several categories of players can also be discerned on the Chinese side. There are of course the intermediaries, who, moreover, are often working for the myth creators among the ranks of the foreigners. But it is above all the Chinese government that has been able to perpetuate the image of an El Dorado. Studwell explains how the Chinese leadership has handled, with no little skill, several public relations tools: colossal real estate investments that sometimes, however, house veritable “Potemkin’s villages”; the strict control of information concerning the political and economic situation; statistics that are simply lies; or even indeed a capacity to get the CEOs of multinationals and heads of state to depart from their daily routine during their sumptuous visits on Chinese soil. Studwell demonstrates perfectly how the myth of the China market reproduces the image of all speculative phenomena. It is created and it develops in relation to the expectations of different actors, in part disconnected from the reality, and who have a common objective: to earn lots of money very quickly.
5 The second part of the work looks at the tomorrows that bring disillusionment. With a few exceptions, since 1994 the big foreign companies have been waking up with a hangover and it is beginning to dawn on them, following the exuberance of the early 1990s, that the returns on their investments will be several degrees removed from what they had banked on. Studwell pertinently explains how their projections have been cut down to size by highly unreliable or manipulated statistics and by the perpetuity of an all-pervasive bureaucratic system in the economy that limits the development of the activities of foreign investors (and private Chinese companies, come to that). And yet the author reveals how these same enterprises are on the point of committing the same mistakes following the accession of China to the WTO.
6 Finally, the last part of the work attempts to offer a more accurate reflection of the reality of the Chinese economy by showing the weaknesses of the country’s economic development since 1978. The author concludes that there is a possibility of a fiscal and banking crisis in the years to come if drastic measures are not taken to change the modus operandi of the Chinese economy, in particular with regard to the governance of enterprises and public institutions. International investors are thus forewarned. This is certainly the least original part of the book, even if we find here some interesting ideas on the limits of hybrid property rights of rural collective enterprises, which were responsible, according to some observers, for the Chinese economic miracle, or even on the duality of the Chinese system of production featuring a dynamic sector sustained by private Taiwanese, Hong Kong and Chinese companies operating in very localised coastal districts and which support at arm’s length public and semi-public enterprises
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that are clearly collapsing but which nevertheless still account for the major part of the Chinese economy.
7 One cause of regret may be that the author has not addressed the important question of the progressive dissemination of know-how and technology throughout the fabric of national industry. Irrespective of the nationality of the investors, the question of knowing whether the national enterprises will gradually be able to climb up the value added chain is critical for future growth. As the Taiwanese experience shows, or even that of Japan or Korea (even if in these two countries the dissemination of foreign technology was conducted by means of technological co-operation rather than by the take-over of majority shareholdings or the creation of factories on national soil as is the case in China), the role of foreign companies is often essential in this process. The author is quick to highlight (p. 226) the fact that China draws little added value from its exports (the difference between the value of imported goods that are assembled and reprocessed and the value of the exported goods), a sign of weak technological competence in the export units, but does not say a word about technology transfers. Few studies have been conducted in this nevertheless fundamental field, and it would have been interesting if the author had dedicated a chapter to it.
8 This criticism aside, the work by Joe Studwell offers a salutary description of the economic reality in China. Intended for a wide audience, it is a profitable read for all those who wish to understand the true nature of China’s economic development. It is compulsory and priority reading for all foreign investors who think they have discovered in the China market a genuine treasure island. Unfortunately, the danger remains that this inventory of the state of affairs will be quickly forgotten: the desire for conquest combined with acute amnesia is omnipresent in business circles. The dream of the China market still has some life left in it and there is thus the risk that it will claim several more victims yet.
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C. Riskin, R. Zhao and S. Li, eds., China’s Retreat from Equality— Income Distribution and Economic Transition M. E. Sharpe, 2001, 222 p.
Sylvie Démurger
NOTE DE L’ÉDITEUR
Translated from the French original by Nick Oates
1 WITH the help of two national surveys, one among rural and the other among urban households, this collective work offers a detailed analysis of how income distribution evolved in China between 1988 and 1995. The study put forward here can be read as a complement to two works published by Griffin and Zhao (1993) and Khan and Riskin (2001), the first of which presents the results of the 1988 survey and the second the results of the 1995 survey. The aim of this third volume is to provide elements that explain the evolution observed in income distribution between these two years, and its preferred method of explanation is by reference to market reforms.
2 The work combines qualitative analyses with a very complete set of quantitative analyses based on the data collected on household income in 1988 and 1995. The various chapters offer an exhaustive view of the mechanisms which underlie the evolution of the income distribution profile during the first half of the 1990s, a period marked by an unstable macroeconomic situation that nevertheless permitted real GDP to virtually double during the seven years that separate the two surveys.
3 The first part of the work underlines the rapid and significant evolution of the inequalities in income in China between 1988 and 1995 (+20% for the Gini calculated on the equivalent income per adult), which confirms a pronounced increase in inequalities
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in both rural and urban incomes (of 30% and 21% respectively). On the other hand, if the general inequality in China remains dominated by the strong deviation in rural- urban income, the contribution made by that deviation showed a tendency to decrease between 1988 and 1995 as a result of the sharp rise in inequality within the urban and, in particular, rural zones.
4 Whatever the indicators retained to measure income and its distribution, the widening of the inequalities in China during the reform period is undeniable. The question of the evolution of income distribution today constitutes an important challenge because of its potentially significant negative consequences in terms of social welfare and the sustainability of the growth process. However, one of the contributions made by this work (underpinned in particular in Chapter 2) is to qualify the extent of this increase, which, at first sight, may appear spectacular in relation to the relatively egalitarian distribution of income prevailing at the end of the Maoist period. Indeed, Zhao Renwei underlines the importance, before the reforms were launched, that benefits in kind played in income, in particular for the urban population, which rendered the distribution of monetary incomes artificially equitable. Moreover, the freezing of wages — which made up the essential part of incomes — that was imposed for twenty-odd years introduced intergenerational distortions within the urban zones. Thus, without denying the rapid widening of the inequalities in China which accompanied the implementation of the reforms, the retrospective analyses put forward in this work serve to temper the pessimism of the conclusions as far as the explosion of these inequalities is concerned. From this perspective, the different chapters suggest a complementary interpretation, in so far as the adoption of mechanisms of the market economy has led to necessary adjustments, which contrast with a situation where the absence of markets, particularly a labour market, and the dominance of the plan on economic activities determined the income distribution profile in an arbitrary manner. Thus, it seems possible to attribute one part at least of the observed rise to a phenomenon of “catch-up” resulting from the progressive transformation of the Chinese economy into an economy guided by market forces.
5 The mechanisms which have led to this increase in inequality in China are complex. It is first necessary to distinguish rural China from urban China, and this is the aim of parts 2 and 3 of the work. In this distinction, the origins of the incomes are formed by very different sources, and the economic reforms have had a differentiated impact on the evolution of income distribution (within the two categories as well as between them). To this rural/urban distinction is added a regional one between coastal China and the interior. Finally, within these categories, it is necessary also to distinguish what, in the evolution of the income distribution, originates on the one hand from sources of income (the increasing importance of wages in rural incomes for example) and on the other from returns based on the characteristics of the individual (the role of education particularly in the explanation of regional differences in urban incomes). This distinction is of interest in terms of economic policy in so far as the problem of access to the factors that enable income to be increased is often posed in a sharp manner for the most underprivileged populations. This is particularly the case in education, to which, the authors demonstrate, ethnic minorities (Chapter 3) and poor migrants (Chapter 13) have little access.
6 The work also dedicates a chapter to the study of rural poverty. Contrary to the official figures, Carl Riskin and Li Shi reveal that the poverty rate in rural China remained
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constant between 1988 and 1995, which means that the absolute number of those living in poverty increased. They similarly show that half of the poor live outside zones officially designated as such and that the representation of national minorities among the poor living outside these zones soared significantly between 1988 and 1995. At a time when the new government is clearly flaunting the reduction of poverty and the improvement of living conditions in rural communities as priority targets, the questions discussed with great rigour in the third part of this work concerning poverty, nutrition, migration and the distribution of land in rural China seem especially topical.
7 If the analysis put forward opens up a number of interesting paths, it is nevertheless regrettable that the authors fail to go beyond the purely descriptive framework that offers traditional methods for the decomposition of inequality. Recourse to more recent complementary techniques, such as the methods of micro-simulation decompositions that explicitly integrate a modelisation of the labour market, would have allowed a clearer light to have been shone on the profound changes that have taken place in the labour market and their impact on income distribution. Within this framework, the evolution of employment and unemployment and the expansion of career choices (through the development of township and village enterprises and of the private sector in particular) are certainly key factors in the evolution of income distribution.
8 These few remarks take nothing away from the quality of this work. The analysis, complete and documented, of the evolution of inequalities at the start of the 1990s presents an obvious interest from both a scientific and an economic policy viewpoint. Moreover, this is certainly a first stage in the study of the evolution of income distribution in the course of the process of reform and development. The current work being conducted on a third survey (1999) should allow a more complete vision to be gained of the evolution of the inequalities over the whole course of that decade.
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Adam Segal, Digital Dragon. High- Technology Enterprises in China Ithaca and London, Cornell University Press, 2003, 188 p., and Kellee S. Tsai, Back-Alley Banking, Private Entrepreneurs in China, Ithaca and London, Cornell University Press, 2002, 316 p.
Gilles Guiheux
NOTE DE L’ÉDITEUR
Translated from the French original by Nick Oates
1 IN MANY respects, the dynamism of China’s economic growth represents a huge challenge for the social sciences. Unlike Western capitalism, the economy and in particular the private sector over the last ten years have developed in the absence of a coherent corpus of laws regulating the systems and transfers of property ownership. In another paradox, some analysts have held the view that China has followed a development model inspired by the experiences of its Japanese, Korean and Taiwanese neighbours, but the hypothesis of a “developmentalist” central Chinese state is contradicted by the variety of local situations and the distance that separates them from the directives formulated at the central level. The works of Adam Segal and Kellee S. Tsai both offer important responses to the challenge presented by the Chinese case to classical analyses of economic development.
2 The object of Adam Segal’s study is the high-technology enterprises under private management (the minban or minying kejiqiye). These enterprises, neither public nor private, in fact come under various systems of property ownership: they are sometimes state enterprises, sometimes collective enterprises, sometimes private enterprises 1. The goal of the author is not only to show that the policies implemented to promote the development of these enterprises have differed from one place to another in China, but also to explain why. To do this, he examines four big cities: Peking, Shanghai, Xi’an and Guangzhou. He has hunted through the local press, read the administrative reports or the development plans for this sector of activity, and conducted over a hundred
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meetings with entrepreneurs as well as representatives of the administrative departments concerned.
3 To understand the variety of strategic choices operated by the authorities, Segal places them in the framework of local economic systems that he characterises by four elements: the technological and scientific resources available, the balance of power between the different administrative departments, the relations between the local government and the central authorities, and local traditions in the field of economic policy. These four elements define an institutional configuration specific to the area under consideration, which, he concludes, has fashioned the local path that has been taken when it comes to the promotion of the high-tech enterprises. The heart of the work is thus formed by the chapters in which the author reconstitutes these local trajectories. Each time, the author directs his questions at three aspects: the legal form (the system of property) adopted by the enterprises, the type of financing that has been implemented, and the relationship between the local government and the enterprises. Studying the emergence of the same sector of activity at several points on Chinese soil, the author logically associates the characteristics of the local system with the success or failure of the promotion of the high-tech industries.
4 Some of the results of the survey may well come as a surprise. For example, contrary to the received idea that the government is omnipresent in Peking, Segal reveals that the high-tech enterprises have developed in a way that has been largely independent of the central authorities. It is only in a second phase, after their initial success, that the local government and the State Council have set up a zone at Zhongguancun where these enterprises are given a privileged welcome. This trajectory is very obviously to be placed in the context of the characteristics of the local economic system. Peking benefits from the largest concentration of universities and other public research institutes, yet at the same time the tools of industrial planning are less developed here than in other cities such as Shanghai. In that city, the development of the high-tech industries has been concentrated around the large state enterprises. The situation is comparable in Xi’an, where the local economy is dominated by state enterprises and the defence industries. For its part, Guangzhou has logically appealed to foreign capital, in particular to entrepreneurs from Hong Kong.
5 In her work, Kellee S. Tsai examines the contribution made by informal financing to China’s growth (70% of the enterprises at which she conducted surveys have resorted to one form or another of informal financing: collateral loans, tontine schemes, loans from family or friends, etc.). The three questions at the core of the work are: how can the wide dissemination of informal modes of financing be explained while they are actually illegal? Why does the informal financing on offer vary from one place to another in China? Why, in the same local area, do private entrepreneurs have different ways of accessing this financing? Tsai looks not only at the diversity of the local situations, but also at the varying usage that private entrepreneurs make of the same financing resources available within a given territory.
6 The argument is supported by a work that covers a considerable amount of terrain and involves more than twenty months of research conducted between 1994 and 2001 (which gives Tsai the authority to comment on developments (2), three hundred interviews with private entrepreneurs, executive officers of banks and administrative departments, in eighteen different locations in the provinces of Fujian, Zhejiang and Henan. The scope of the sampling allows certain hypotheses to be verified statistically
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(correlation tests). Thus, in sixteen of the eighteen localities investigated, the attitude of the local government towards the private sector (repressive or favourable) explains the degree of institutional diversity when it comes to informal financing.
7 The data also reveals that the strategy of individual entrepreneurs where financing is concerned depends on the length of their experience, the scope of their political relations, their residential origins as well as their sex. Tsai thus also stresses the diversity of the private entrepreneurs themselves. If, under given conditions, they make different use of the modes of financing available, it is because each one is characterised by a different political and social identity. Thus, an entrepreneur who enjoys solid political relations will be more disposed to mobilise the formal credit system than a migrant woman possessing few points of contact in the local society.
8 The response that Tsai gives to the hypothesis of a “developmentalist” Chinese state, even local, consists in what she calls the “the local logics of economic possibility”. The author emphasises both the importance of the heritage of the Maoist period (the presence of state enterprises or powerful collective institutions) and the initiative of the entrepreneurs who, though certainly embedded in the given local structures, nevertheless possess capacities for innovation in the use of the available resources. What matters for the understanding of the processes underway are thus less the impulses given by the central government than the local configurations that are in place.
9 Naturally enough, the two works share the same comparative method, which stresses the break-up of Chinese territory into several parts. This choice allows two dangers to be avoided, one being abstract and misleading generalisations on the scale of a country that contains so many contrasts, the other the impasses of a pure monograph. The chosen method is extremely fruitful here and allows both authors to construct a number of typologies: four modes of development for the high-tech enterprises for Adam Segal (p. 18); and three development models in the informal financial sector for Kellee Tsai (p. 256).
10 The authors also insist on the necessity of deconstructing the central state as well as the local governments. The Chinese state is not to be considered as a coherent machine that marches to the beat of the same drum. One would search in vain for a central Chinese administration that would be the equivalent of Japan’s MITI or Singapore’s EPD. In China, it is necessary to envisage the state as a decentralised structure, yet “embedded” in specific institutional, political and social configurations. Adam Segal is interested precisely in the interactions between the local and central echelons. Kellee Tsai clearly demonstrates that at the level of the same city the Bank of China and the Bureau of Industry and Commerce can have divergent interests (while the former wishes to suppress the informal types of credit, the latter may actively support them, as collateral loan agencies or credit co-operatives are sources of revenue). At each level – national, provincial, municipal, district or village – the party-state is composed of administrative and political organs that work in co-operation with but are simultaneously rivals to each other.
11 Another conclusion common to the two works is the weight exerted by the past. Adam Segal evokes the “traditional patterns of industrial policy” which vary from one area to another and help to explain the capacity of local governments to formulate and implement an industrial policy. Kellee Tsai stresses the Maoist heritage, a factor that structures local logics. Where the state did not organise economic development during
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the Maoist period, the private economy is active (as in Wenzhou) and the local authorities are agreeable to the creation of new forms of financing 3.
12 Certainly, the reading of the two works leaves something to be desired. Adam Segal does not furnish, for example, any indices of the economic or technological performance of the enterprises under consideration. To what extent are these Chinese high-tech companies genuinely innovative? Do a number of them not merely content themselves with assembling parts, extensively imported, and are they thus not simple manufacturing enterprises? Has China not planted its territory with technology parks (gaokexue yuan) that, when they are not deserted, primarily welcome enterprises on the look-out for tax exemptions and easy access to credit? Is the comparison between Zhongguancun and Silicon Valley in California relevant (the thought here is in particular directed at the question of the circulation of information between enterprises with links to universities or contributing research centres)? Kellee Tsai, for her part, sometimes tries her reader’s patience with the immensity of the literature of sociology, economics, anthropology and political science that she draws on (is the reference to the habitus of Pierre Bourdieu, p. 259, really necessary?). Despite these comments, the two authors offer a considerable wealth of results and open up a path that is full of promise.
NOTES
1.On this point, see Bennis Wai-yip So, “Evolution of Minying High-tech Enterprises in China: Legitimizing Private Ownership”, Issues& Studies, vol. 37, No. 5, September- October 2001, pp. 76-99, and our article “The Incomplete Crystallisation of the Private Sector”, China Perspectives, No. 42, July-August 2002, pp. 24-35. 2.The creation in 1984 in Wenzhou of the first bank that was closed in 1989 for example (pp. 140 ff.). 3.That is not to say that in the areas where the local administration continues to entertain very close links with state or collective enterprises private entrepreneurs for whom access to formal credit is difficult do not display a great capacity for innovation in terms of financing. This is the case in the province of Henan, where although the private sector is relatively underdeveloped, there is a great variety in the types of informal financing.
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Lo Shiu-hing, Governing Hong Kong: Legitimacy, Communication and Political Decay New York, Nova Science, 2001, XII+ 349 pp.
Richard Baum
1 Since the mid-1990s, no one has written about Hong Kong politics more prolifically or knowledgeably than Lo Shiu-hing. In this, his third book on the subject in the past six years (not to mention a fourth on the politics of Macau), Professor Lo examines the record of Hong Kong's post-retrocession political development. The story he tells is a sobering one. Although he finds that China has by and large formally honoured its promise to respect the "one country two systems" formula embedded in the 1990 Basic Law, Lo nonetheless sees Hong Kong's principal political trend since 1997 as one of steady "institutional decay", accompanied by creeping domination by Peking's appointed Hong Kong proxies. As Lo puts it boldly in his introduction, "Objectively speaking, the HKSAR's polity, economy and legal system have... deteriorated since the handover. Politically, the HKSAR is becoming more similar to the PRC than ever before" (p. 3).
2 Professor Lo's catalogue of Hong Kong's deteriorating conditions is a long and inclusive one: "Specifically, political decay in the HKSAR is characterized by a more personal style of governance; a chaotic implementation of public policies; an increasingly politicized judiciary […]; endangered civil liberties […]; an amalgamation of political labelling and mobilization; a failure of political institutions to absorb public pressure and demands; and a governmental insensitivity to public opinion" (p. 13). Now this is a rather imposing list of regime shortcomings. And it is clear from the outset that Professor Lo is not interested in sugarcoating his critical observations. In seven well- defined thematic chapters, he examines successively the British legacy, the socio- economic environment, the civil service, the Chief Executive, the legislature, public opinion, and the role of Peking. Buttressing his arguments with a profusion of contemporaneous newspaper accounts and anecdotal evidence, as well as the observations of numerous Hong Kong-based analysts, he builds a strong case for Hong
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Kong's steady institutional deterioration and decay since 1997. There are two main problems with his analysis—neither of which necessarily bear on Lo's conclusions, which seem to me more or less sound, if perhaps too caustic and one-sided. The first problem is methodological, the second stylistic. Methodologically, Lo has perhaps unwittingly committed one of the cardinal sins of social science: selection bias. That is, he appears to have carefully chosen his evidence, his anecdotes, and his quotations to make the Hong Kong government of Chief Executive Tung Chee-hwa look as incompetent as possible – thereby bolstering his own pre-formed conclusions. Now it may be objected that it would be difficult to make the government of C.H. Tung look good no matter where you looked for evidence; but since Lo has looked mainly for bad news—finding a good deal of it—we will never know. Insofar as the book purports to be an objective account of Hong Kong's government and politics, its lack of balance is something of a liability.
3 Stylistically, the book suffers from a good deal of redundancy and some sloppy editing. The same arguments appear over and over, in slightly altered form, frequently accompanied by lengthy quotations from secondary sources. Much of this scholastic supporting material could have been excised (or abbreviated) with little or no loss of effect. It is as though Professor Lo felt duty bound to include every shred of evidence, every relevant quotation in his possession. His editor should have exercised a firmer hand.
4 Nevertheless, and despite these shortcomings, Governing Hong Kong is a useful book. Its slashing critique of the Tung administration's performance may be one-sided and overblown, but in view of the administration's inept handling of the recent SARS epidemic (among other failings), it may well be appropriate to point out that the HKSAR emperor's clothes are, well, very thin indeed.
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Sheng Lijun, China and Taiwan, Cross-Straits Relations Under Chen Shui-bian London & New York, Zed Books, 2002, 164 p.
Gunter Schubert
1 This is a very useful account of the latest developments in Taiwan concerning cross- Strait relations and the evolution of Taiwan’s mainland policy. Sheng Lijun’s book presents a huge amount of detail and information on the period between Lee Tenghui’s announcement of the “two states theory” (liangguolun) in mid-1999 and, roughly speaking, the end of the first year of the Chen administration. It also lays out the basic obstacles to a peaceful solution of the Sino-Taiwanese conflict by recalling the development of bilateral relations and the different concepts of cross-Strait rapprochement since the early 1990s. The main chapters of the book deal with former president Lee’s gradual transformation into a promoter of de facto-Taiwanese independence (and the concurrent story of growing disappointment and frustration with Lee on the part of the Peking government), the puzzle of Chen Shui-bian’s mainland policy, and the PRC leadership’s reaction to this policy so far. They follow a brief analysis of the military capabilities of both Taiwan and the PRC intended to assess the probability and outcome of a future war in the Taiwan Strait. The author comes to the conclusion that the current state of low intensity, short of war, serves Peking’s interest best and is likely to hold for some time to come. The PRC leadership will try hard to prevent Taiwan from becoming a regional economic centre, a status that would only give it international leverage to further postpone unification. Much more, Peking —while not being able to force any solution on Taiwan for the time being—will continue to contain any effort made by Taipei to internationalise the cross-Strait issue. The author’s realist perspective on cross-Strait relations is obvious as is his critical stand on Chen Shui-bian’s mainland policy, which he positions more to the left (“independence fundamentalists”) than in the middle (the advocates of a status quo). Rather uninformed is a sub-chapter on “Taiwan’s Weaknesses” that tries to give evidence of a “fragile democracy” by pointing to deficient civil society structures and societal core
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values, weak state-building and governance, economic malaise and internal thrift within the ruling DPP. This is far too negative a picture of contemporary Taiwan, misleadingly evoking the image of a country that will sooner or later have to give in to a perseverant China. The author neglects at this point the strong sense of national identity that makes Taiwan a strong opponent of the PRC in times of crisis. However, all the author’s points have to be taken into serious account when it comes to a proper judgement of Chen Shui-bian’s first year in office and the limits of Taiwan’s ongoing striving for internationally recognised sovereignty. For that reason, the book is a must for all those interested in the intricacies of cross-Strait relations and the debate on how best to strike a deal between Peking and Taipei.
China Perspectives, 48 | july- august 2003