Dædalus coming up in Dædalus:

Inventing Courts Linda Greenhouse, Judith Resnik, Marc Galanter, Michael J. Graetz, Jamal Greene, Gillian K. Had½eld, Deborah Hensler, Robert A. Dædalus Katzmann, Jonathan Lippman, Kate O’Regan, Frederick Schauer, Susan Silbey, Jonathan Simon, Carol S. Steiker, Stephen C. Yeazell, Journal of the American Academy of Arts & Sciences and others Spring 2014

From Atoms Jerrold Meinwald, Jeremiah P. Ostriker, Christopher Cummins,

to the Stars K. N. Houk & Peng Liu, John Meuring Thomas, Chaitan Khosla, Spring 2014: Growing Pains in a Rising China Fred Wudl, Gáspár Bakos, Scott Tremaine, Pieter van Dokkum, Growing Elizabeth J. Perry Growing Pains: Challenges for a Rising China 5 David Spergel, Michael Strauss, Anna Frebel, and others Pains in Barry Naughton China’s Economy: Complacency, Crisis a Rising & the Challenge of Reform 14 China What is the Brain Rusty Gage, Tom Albright, Emilio Bizzi, Gyorgy Buzsaki & Deborah S. Davis Demographic Challenges for a Rising China 26 Good For? Brendon O. Watson, James Hudspeth, Joseph LeDoux, Earl K. Miller, Martin King Whyte Soaring Income Gaps: China in Terry Sejnowski, Larry Squire & John Wixted, and Robert Wurtz Comparative Perspective 39 William C. Hsiao Correcting Past Health Policy Mistakes 53 plus Food, Health, and the Environment; What’s New About the Old?; Mark W. Frazier State Schemes or Safety Nets? Water; On an Aging Society &c China’s Push for Universal Coverage 69 Mary E. Gallagher China’s Workers Movement & the End of the Rapid-Growth Era 81 Benjamin L. Liebman Legal Reform: China’s Law-Stability Paradox 96 Guobin Yang Internet Activism & the Party-State in China 110 Ching Kwan Lee State & Social Protest 124 Robert P. Weller The Politics of Increasing Religious Diversity in China 135 William C. Kirby The Chinese Century? The Challenges of Higher Education 145 Jeffrey Wasserstrom China & Globalization 157 Joseph Fewsmith Local Governance in China: & Xiang Gao Incentives & Tensions 170 Elizabeth Economy Environmental Governance in China: State Control to Crisis Management 184

U.S. $13; www.amacad.org Cherishing Knowledge · Shaping the Future Cover_Spring 2014 3/7/2014 9:55 AM Page 2 Inside front cover: Villagers gather outside a house in Yuangudui, Gansu Province, China. © REUTERS/ Carlos Barria. Elizabeth J. Perry, Guest Editor Phyllis S. Bendell, Managing Editor and Director of Publications D Micah J. Buis, Senior Editor and Associate Director of Publications Peter Walton, Senior Editorial Assistant J Emma Goldhammer, Senior Editorial Assistant

Committee on Studies and Publications Jerrold Meinwald and John Mark Hansen, Cochairs; Jesse H. Choper, Denis Donoghue, Gerald Early, Carol Gluck, Sibyl Golden, Linda Greenhouse, John Hildebrand, Jerome Kagan, Philip Khoury, Steven Marcus, Eric Sundquist

Dædalus is designed by Alvin Eisenman. Dædalus Journal of the American Academy of Arts & Sciences

Design for the hedge maze is by Johan Vredeman de Vries, from Hortorum viridariorumque elegantes & multiplices formae: ad archi- tectonicae artis normam affabre delineatae (Cologne, 1615).

Dædalus was founded in 1955 and established as a quarterly in 1958. The journal’s namesake was renowned in ancient Greece as an inventor, scien- tist, and unriddler of riddles. Its emblem, a maze seen from above, symbol- izes the aspiration of its founders to “lift each of us above his cell in the lab- yrinth of learning in order that he may see the entire structure as if from above, where each separate part loses its comfortable separateness.” The American Academy of Arts & Sciences, like its journal, brings togeth- er distinguished individuals from every ½eld of human endeavor. It was char- tered in 1780 as a forum “to cultivate every art and science which may tend to advance the interest, honour, dignity, and happiness of a free, independent, and virtuous people.” Now in its third century, the Academy, with its nearly ½ve thousand elected members, continues to provide intellectual leadership to meet the critical challenges facing our world. Dædalus Spring 2014 Subscription rates: Electronic only for non- Issued as Volume 143, Number 2 member individuals–$46; institutions–$126. Canadians add 5% gst. Print and electronic for © 2014 by the American Academy nonmember individuals–$51; institutions– of Arts & Sciences $140. Canadians add 5% gst. Outside the United China’s Economy: Complacency, Crisis & States and Canada add $23 for postage and han- the Challenge of Reform dling. Prices subject to change without notice. © 2014 by Barry Naughton Demographic Challenges for a Rising China Institutional subscriptions are on a volume- © 2014 by Deborah S. Davis year basis. All other subscriptions begin with Legal Reform: China’s Law-Stability Paradox the next available issue. © 2014 by Benjamin L. Liebman Single issues: $13 for individuals; $35 for insti- Editorial of½ces: Dædalus, American Academy of tutions. Outside the United States and Canada Arts & Sciences, 136 Irving Street, Cambridge ma add $6 per issue for postage and handling. 02138. Phone: 617 576 5085. Fax: 617 576 5088. Prices subject to change without notice. Email: [email protected]. Claims for missing issues will be honored free Library of Congress Catalog No. 12-30299 of charge if made within three months of the publication date of the issue. Claims may be Dædalus publishes by invitation only and as- submitted to [email protected]. Members of sumes no responsibility for unsolicited manu- the American Academy please direct all ques- scripts. The views expressed are those of the tions and claims to [email protected]. author of each article, and not necessarily of the American Academy of Arts & Sciences. Advertising and mailing-list inquiries may be addressed to Marketing Department, mit Press Dædalus (issn 0011-5266; e-issn 1548-6192) Journals, One Rogers Street, Cambridge ma is published quarterly (winter, spring, summer, 02142-1209. Phone:617253 2866. Fax: 617 253 1709. fall) by The mit Press, One Rogers Street, Cam- Email: [email protected]. bridge ma 02142-1209, for the American Academy of Arts & Sciences. An electronic full-text version To request permission to photocopy or repro- of Dædalus is available from The mit Press. duce content from Dædalus, please complete the Subscription and address changes should be ad - online request form at http://www.mitpress dressed to mit Press Journals Customer Service, journals.org/page/permissionsForm.jsp, or con- One Rogers Street, Cambridge ma 02142-1209. tact the Permissions Manager at mit Press Jour- Phone: 617 253 2889; u.s./Canada 800 207 8354. nals, One Rogers Street, Cambridge, ma 02142- Fax: 617 577 1545. Email: [email protected]. 1209. Fax: 617 253 1709. Email: journals-rights@ mit.edu. Printed in the United States of America by Cadmus Professional Communications, Science Corporations and academic institutions with Press Division, 300 West Chestnut Street, valid photocopying and/or digital licenses with Ephrata pa 17522. the Copyright Clearance Center (ccc) may reproduce content from Dædalus under the Newsstand distribution by Ingram Periodicals terms of their license. Please go to www Inc., 18 Ingram Blvd., La Vergne tn 37086. .copyright.com; ccc, 222 Rosewood Drive, Postmaster: Send address changes to Dædalus, Danvers, ma 01923. One Rogers Street, Cambridge ma 02142-1209. The typeface is Cycles, designed by Sumner Periodicals postage paid at Boston ma and at Stone at the Stone Type Foundry of Guinda ca. additional mailing of½ces. Each size of Cycles has been sep arately designed in the tradition of metal types. Growing Pains: Challenges for a Rising China

Elizabeth J. Perry

The accumulative achievements of China’s ongoing socioeconomic reforms are by most measures little short of astounding. From one of the globe’s poorest countries at the time of Mao Zedong’s death in 1976, the People’s Republic of China (prc) has become a booming economy–second biggest in the world– thanks to a swift rise that has rescued hundreds of millions of its people from poverty and afforded the government enviable resources for further devel- opment. Yet while one may marvel at the speed and success of the so-called China miracle, neither the Chinese people nor their leaders seem at ease with the current situation. Rampant grassroots protest bespeaks intense popular indignation at everything from land grabs to environmental pollution, while top of½cials themselves rail against the corroding effects of cadre corruption and income inequality. To evaluate the challenges facing China after thirty- ½ve years of reform is a dif½cult task, and not only because of the apparent disconnect between objec- ELIZABETH J. PERRY, a Fellow of tive gains and subjective gripes. For one thing, the the American Academy since 2002, head-spinning pace of change threatens to render is the Henry Rosovsky Professor of any academic assessment quickly obsolete. For Government at Harvard University another, the prc’s post-Mao record of achievement and Director of the Harvard-Yench- is in fact decidedly uneven across geographic re - ing Institute. Her many books in- gions, social strata, and policy sectors. While major clude Shanghai on Strike: The Politics cities boast gleaming new infrastructure and atten- of Chinese Labor (1993), Patrolling the Revolution: Worker Militias, Citizen- dant urban amenities that equal or surpass those of ship, and the Modern Chinese State the advanced industrial world, much of the rural (2005), and Anyuan: Mining China’s interior remains mired in grinding poverty. The af - Revolutionary Tradition (2012). fluence of new urban middle and upper classes, flush

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00268 5 Growing with the proceeds from lucrative real estate terred the resurgence of massive political Pains: deals, is offset by the indigence of the mil- protests. Yet among ordinary Chinese cit- Challenges for a Rising lions of migrants who labor in their midst. izens as well as government of½cials, not China And although the Chinese state can take to mention Western social scientists, there credit, at least through the 1990s, for spear- is widespread skepticism of the long-term heading a series of bold economic mea- compatibility between a flourishing mar- sures that replenished central coffers and ket economy and a conventional Commu- enriched many citizens, post-Mao achieve- nist polity. ments in the area of social welfare–not to mention political and legal reform– From the very beginning of the reform have to date been less impressive. era, the apparent incongruity in the basic The project of “reform and opening” makeup of the Chinese political economy (gaige kaifang), launched by reformist has prompted persistent predictions of politician Deng Xiaoping in December imminent regime change from outside 1978, only two years after Mao Zedong’s observers. Signi½cantly, however, this death, brought both unprecedented pros- same sense of precariousness has helped perity and unparalleled problems. The motivate successive generations of Chinese most immediate initial challenge facing Communist Party (ccp) leaders to invent Deng and his colleagues was that of pre- and implement an array of policies in- serving Communist Party rule while dis- tended to preempt–or at least postpone mantling the command economy and –the need for a drastic political overhaul. regimented social order that constituted For the ½rst three decades of reform, as the de½ning yet debilitating features of classic state dismantled the rudimentary welfare Communist systems. This was a feat that provisions of the Mao era, it looked as had eluded most other Communist states. though the only thing that could be con- In subsequently characterizing his reform sidered socialist about “socialism with effort as “socialism with Chinese charac- Chinese characteristics” was the contin- teristics,” Deng Xiaoping drew attention ued rule of a ruthless Communist Party. to the distinctiveness of the Chinese tra- Basking in the glow of stunning and sus- jectory. tained economic growth, party leaders Swift as China’s ascent has been, it has were able to disregard many of the negative not been seamless. The contradiction be - externalities that emerged in the wake of tween an increasingly open economy and rapid marketization. society and a still intact Leninist party- Much has changed in recent years. state came to a dramatic head only a de- Leaders evidence growing awareness of cade into the post-Mao reform effort with the danger of hitching the legitimacy and the Tiananmen uprising of 1989, when longevity of their Communist party-state millions of citizens joined hands to criti- to an economic engine whose velocity is cize inflation and corruption and to call slowing. The second term of the Hu Jintao for political reform. That was also the year, –Wen Jiabao administration (2007–2012) of course, when Communist regimes col- saw a flurry of government regulations and lapsed across Eastern Europe, soon to initiatives intended to redress many of the culminate in the breakup of the Soviet social ills and grievances that had accrued Union itself. In China, the state’s brutal dur ing the previous thirty years of extreme - suppression of the Tiananmen uprising, ly rapid yet highly unequal growth. New la- followed by its sustained attention to bor laws, medical insurance schemes, pen- “stability maintenance” (weiwen), has de- sions, poverty alleviation programs, and

6 Dædalus, the Journal ofthe American Academy of Arts & Sciences higher-education expansion formed part events so as to “guide public sentiment” Elizabeth J. of an ambitious bid to secure popular sup- (yindao yuqing) in directions favorable to Perry port and thereby sustain party rule. The the party’s agenda. These various tech- newly installed Xi Jinping–Li Keqiang niques have deep roots in the history of the leadership seems committed to deepening ccp as both a revolutionary and a ruling a comprehensive project of social reform, party, but they have been substantially while at the same time declaring war on modi½ed and modernized to suit contem- the rampant cadre corruption that has porary conditions.2 become a lightning rod for popular dis- In light of the demise of Communist content. The Xi–Li administration openly party-states across most of the globe, it acknowledges worrisome economic indi- may be tempting to discount the ccp’s cators to underscore the need for further contemporary policy experiments as a ½scal reform. Moreover, with the fate of desperate ploy by a soon-to-be doomed the political system believed to hang in the regime. But the post-Mao state has already balance, party-state leaders express ur - survived–and indeed thrived–for far too gency for making progress on a range of long not to be taken seriously as a subject policy challenges that extend well beyond for comparative public policy investiga- gdp growth rates. The Mass Line Cam- tion. Moreover, the historical origins of paign, launched in June 2013, enjoins party the prc suggest that its future may not be cadres to eschew ex travagance in order to well predicted by the fates of the former avoid the loss of popular support be lieved Soviet Union or East European Commu- responsible for the collapse of the Soviet nist regimes.3 The prc–like all other Union. still extant Communist regimes (that is, Progressive social policies and stricter Cuba, Vietnam, Laos, and North Korea)– party discipline, buttressed by solid eco- ascended to power via an extended rural nomic reform, are not the only means by revolution that endowed the regime and which the ccp endeavors to stay in power. its ruling Communist Party with strong What the state euphemistically refers to nationalist credentials. This stands in con - as “social management” (shehui guanli), or trast to the Communist Party of the Soviet the resolution of social tensions through Union, which gained control through a a potent mixture of coercion and accom- relatively short and narrowly based urban modation, remains a staple instrument of revolution. The difference with Eastern control that helps account for the absence Europe, where Communist regimes were of large-scale political demonstrations in generally imposed by Soviet military might the twenty-½ve years since Tiananmen. at the end of World War II, is even sharper. Press and Internet censorship are an im - Unlike most of the formerly Communist portant element of this strategy. Another world, the prc and its few fellow surviving factor in the ccp’s capacity to defuse Communist states attained power in the political challenge is the leaders’ proven course of prolonged and pervasive peasant aptitude for “cultural governance,” or the mobilization. That rich revolutionary invention and application of resonant history bequeathed valuable practical ex- symbolic resources designed to enhance perience in social organization and con- the party’s image and endear it to the peo- trol, while bestowing important political ple.1 Rather than simply suppress unwel- advantages that have so far withstood the come media reports or blog postings, for test of time. This is by no means to suggest example, the authorities take an active role that such regimes are destined to last for- in planting their own interpretation of ever, but whatever the prc’s eventual life

143 (2) Spring 2014 7 Growing span turns out to be, its remarkable rise and Somewhat paradoxically, perhaps, Chi - Pains: resilience to date suggest that we are better na’s lack of democratic processes and in- Challenges for a Rising advised to treat its current challenges and stitutions contributes to the urgency with China complaints as the growing pains of a body which such policy challenges are regarded. politic still in the process of maturation, For example, in a context where massive not as the death pangs of a Communist di - protests ignited by medical malpractice nosaur destined to imminent extinction. or environmental pollution are viewed as Thus, rather than frame our inquiry in capable of detonating the entire system, terms of the prospects for regime change, the apparent danger of inaction is inten- as so much social science work on con- si½ed and the political dividend for allevi- temporary China is apt to do, the contrib- ating such problems is ampli½ed. While it utors to this issue of Dædalus were invited is certainly true that the absence of dem- to explore ways in which the Chinese state ocratic channels for expressing and re- is addressing actual policy concerns, from dressing popular grievances is itself re - popular protest to public health. Although sponsible for the severity of a number of these policy challenges may be especially these troubles, that same democratic de½- pronounced and politically sensitive in cit puts immense pressure on the govern- China, in light of the country’s exceptional ment leadership to arrive at effective solu- size and rapid economic growth under a tions. To be sure, the draconian methods basically unreformed Communist politi- employed by the Chinese state to address cal system, they are also problems com- some of its challenges would be deemed mon to all countries. Contributors were both unfeasible and unpalatable in a more encouraged to assess the Chinese state’s liberal political setting. Even so, the fact rec ord in a comparative context, high- that many of the problems with which Chi- lighting what is unique or unusual (for bet- na is currently grappling are global in com- ter or worse) in the prc’s efforts to resolve pass and consequence renders its public these universal dilemmas. policy record of more than parochial in- This collective exercise yields a complex terest and importance. portrait of a government and society that are tackling at once, with varying degrees Without democratic institutions capa- of success, a broad range of issues that ble of conferring procedural legitimacy, the bedevil developed and developing coun- ability of the prc to meet its pressing pol- tries alike. Some of the thorniest chal- icy challenges will depend to some degree lenges, ironically enough, stem either di - upon continued economic expansion ca - rectly or indirectly from the remarkable pable of generating adequate employment results of earlier prc reform efforts, in- opportunities and ½nancing critical redis- cluding the one-child-family program and tributive and other government-led pro- the rural industrialization boom. From grams. While the sizzling growth rates of dramatic demographic transition to devas- the initial decades of reform are unsus- tating environmental degradation, the tainable over the long run, a steady pace ensuing problems are often intractable and of development is vital to realizing the the solutions seldom entirely obvious or state’s ambitious social policy agenda. As easy. In contrast to some other countries, Barry Naughton points out in his essay in however, the Chinese case is noteworthy this volume, China is already exceptional for a growing recognition of the serious- among large economies in its unusually ness of these questions on the part of both high level of state investment. Linking this government of½cials and ordinary citizens. overinvestment (compounded by ½nancial

8 Dædalus, the Journal ofthe American Academy of Arts & Sciences fragility, local government debt, demo- equality, Whyte explains, conforms closely Elizabeth J. graphic changes, and other systemic short- to spatial lines that were drawn during the Perry comings) to an inevitable economic slow- Mao era.4 To overcome such deeply en - down, Naughton argues nonetheless that trenched divisions between city and coun- “serious market-oriented economic re- tryside will demand bold and wide-rang- forms are possible in the immediate ing reform. future.” So long as central leaders act pre- Among the most pressing reforms re- emptively in promoting a ½nancial re- quired to blunt the impact of rural poverty structuring to blunt the power of vested are improvements in health care provision. interests (including their own), the Chi- Yet as William Hsiao emphasizes in his nese economy can move to a lower but essay, the quality and accessibility of med- more sustainable growth rate in the con- ical care in contemporary China also fol- text of a richer, more prosperous society. lows the spatial divide: “The disparity in Naughton stresses that “[i]t absolutely has access to quality health care between the capacity to do so, but policy-makers rural and urban areas has in essence cre- must summon the will and determina- ated a two-tiered system. Although the tion.” The previous Hu–Wen administra- top level is similar to health care available tion proved unable to meet this political- in ½rst-world nations, the lower tier of ly dif½cult challenge; whether the Xi–Li the Chinese health care system is more leadership will rise to the task remains to typical of that found in the third world.” be seen. The solution, Hsiao argues, will require Even under the most optimistic of eco- more than simply increased state invest- nomic scenarios, however, it is clear that ment. In fact, he cautions that “more in - the state will need to overcome a number vestment in health may not improve health of vexing social problems. Among the outcomes.” Nothing short of a funda- most serious, as Deborah Davis observes mental reorientation in medical ethics, in her essay, is the demographic issue. com bined with a major restructuring of Decades of low fertility encouraged by public hospital governance, will do the the single-child-family policy have con- trick. Despite this grim assessment of the tributed to a rapidly aging population. The problems bedeviling the Chinese health deleterious consequences are particularly system, Hsiao’s comparison with another pronounced in the countryside, where large developing country, India, puts the massive out-migration has left elderly vil- Chinese record in a more favorable light. lagers with no adult children to provide After a decade of government attention support. While the problem of an aging on the part of both countries to providing population is nothing new for many coun- health care to the rural poor, China has tries in the developed world, Davis points managed to extend medical insurance to out that “China will become old before it 95 percent of its citizens whereas India becomes rich.” The dilemma is intensi½ed has succeeded in covering a scant 25 per- by the fact that wealth in China is so un - cent of its population. evenly distributed. Martin Whyte notes As Mark Frazier reminds us, how we in his contribution that “China has expe- evaluate China’s relative progress on so- rienced an unusually sharp increase in in- cial policy (including old-age pensions, come inequality since the early 1980s and public education, and affordable housing, currently ranks fairly high compared to in addition to health care) depends on the other societies in terms of the gaps be- cross-national comparison set. The most tween its rich and poor citizens.” This in- common sets of countries against which

143 (2) Spring 2014 9 Growing China is typically assessed, the East Asian adherence to legal procedures may actu- Pains: developmental states and the post-socialist ally be serving to engender even greater Challenges for a Rising transitional economies, may not be the social instability. Because the Chinese China most appropriate or illuminating for this Communist Party does not derive its own purpose. According to Frazier, a more use- legitimacy from the law, its commitment ful grouping is what he calls “large uneven to the legal process is inherently weak. A developers” (such as India, Brazil, and rise in popular protest over the past decade South Africa) with legacies of severe rural- has been met by a retreat from legal re- urban inequality combined with periods form in favor of what Liebman calls a “re- of rapid economic growth. Put in this turn to populist legality,” or the reliance framework, the Chinese policy path on dispute mediation led by local party emerges as quite distinctive, although the of½cials. Ironically, this effort to dampen comparative ef½cacy of its “more categori- rampant protest by party mediation seems cal and spatial” approach to overcoming to have had precisely the opposite of its the urban-rural divide remains to be seen, intended effect, encouraging yet other especially should the Chinese state be faced complainants “to pursue their grievance with a sudden and sharp economic down- outside the legal system,” thus promoting turn. even more unrest. Posing a particular challenge to the prc’s Coping with a high level of protest is commitment to poverty alleviation is the certainly nothing new for the Chinese po- dismal plight of hundreds of millions of litical system. Popular protest has been a internal migrants. The continuing struc- staple feature of state-society relations in tural divide between city and country- China for centuries. Imperial China, Re- side–reinforced by a “household regis- publican China, and Mao’s China were all tration” (hukou) system that remains of- beset by widespread societal contention ½cially intact, despite the emergence of a that severely tested state control.5 Despite “floating population” (liudong renkou) this continuity, the modes and meanings whose actual places of residence (in cities) of social protest and state response have do not match their of½cial (rural) status– fluctuated markedly, reflecting profound makes this a slippery issue for the state to changes in both concerns and capacities. address. Compounding the state’s dif- Among the most striking recent develop- ½culties is the growing activism of young ments has been the turn to the Internet migrant workers whose increased mobi- and other forms of new social media on lization and awareness of their legal rights, the part of aggrieved citizen activists and Mary Gallagher contends, “stands in sharp attentive state of½cials alike. Guobin Yang contrast to the state of labor movements explains in his essay that the areas and in other transitional and developing coun- sites of government regulation and control tries.” To deal with the upsurge in large- have expanded in tandem with changes scale strikes and demonstrations, the state in citizen activism: “Today, content and has intervened more directly in the dispute service regulation is all-encompassing, in - resolution process in a move that Gallagher cluding Internet cafés, bulletin board sys- characterizes as “problematic for the rule tems, text messaging, online news, video of law and the fledgling legal system.” and audio sharing websites, online games, Gallagher’s conclusion is consistent with and blogs and microblogs.” Managing and that of Benjamin Liebman, who further channeling online contention is but one suggests that the Chinese party-state’s of a number of adaptive state techniques preference for rapid conflict resolution over for coping with new modes of popular pro-

10 Dædalus, the Journal ofthe American Academy of Arts & Sciences test. Ching Kwan Lee points out in her es - rary China. The phenomenal explosion in Elizabeth J. say that ever since the run-up to the Beijing university enrollments and commensu- Perry Olympics in 2008, the Chinese state has rate expansion in campus size and facilities also resorted increasingly to a practice that reflect a major state investment in the of½cials call “buying stability”–bargaining development of higher education. Yet as with protesters by offering them cash Kirby notes, the state’s strategy “has been payments–as a means of deterring or de - elitist as well as massive.” Aiming to pro- fusing street demonstrations and other dis- mote a privileged stable of “world class” ruptive activities. Although the approach universities capable of competing with has helped depoliticize state-society in- top-ranked institutions around the globe, teractions, Lee argues that this “turn to the the Chinese government has been pouring market as a mechanism of governance” enormous sums of money into a handful holds a number of corrosive implications, of its leading universities, a strategy that of which the most serious may be a decline exacerbates preexisting divisions between in state authority. privileged and disprivileged students and faculty. By Kirby’s account, the jury is still Throughout Chinese history, “hetero- out on a haunting question facing China’s dox” religions helped inspire and instigate educational ambitions: “can ‘world class’ anti-state contestation. That historical her- universities . . . exist in a politically illiberal itage, compounded by Marxism-Leninism’s system?” hostility toward religion in general, con- China’s policies in the ½eld of higher tributes to the party-state’s suspicion to - education are obviously influenced by the ward all manner of spiritual beliefs and pressures and promises of “global rank- practices–from Falun Gong to Islam. The ings,” which raise high hopes of being remarkable religious upsurge now sweep- able to clamber up to the top tier on the ing China thus triggers special political basis of certain objective and universally concerns. The state has, unsurprisingly, acknowledged benchmarks. But Jeffrey been slow to bestow of½cial recognition Wasserstrom, citing the insight of British on the myriad of new religious groups his torian C. A. Bayly with respect to an that have emerged. As Robert Weller ex - earlier age of globalization, points out that plains, the response of Chinese of½cials the relentless drive toward international has been to “govern with one eye closed,” uniformity does not necessarily imply or “simply leave religion alone as long as homogenization: “[t]oday, as well, it is they feel that no lines have been crossed,” useful to see globalization as leading to rather than to change the of½cial regula- standardization without the eclipsing of tory system to conform to the new reality. difference.” Drawing on examples as far Hypocritical though this stance may be, it a½eld as world exhibitions and world reli- allows the state to manage the situation gions, Wasserstrom shows how China’s without revamping its basic corporatist adoption of common cross-national forms model. has in turn ½lled them with distinctive While state authorities are reluctant to national content. abandon or overhaul the fundamental sys- The two concluding essays point to seri- tem of social control, they have not been ous issues of governance that may well shy about experimentation in a range of stand in the way of China’s aspirations, key policy domains. William Kirby’s essay global and domestic alike. The essay by on higher education explores one of the Joseph Fewsmith and Xiang Gao highlights most dynamic policy arenas in contempo- a “crisis in local governance” that shields

143 (2) Spring 2014 11 Growing grassroots of½cials from accountability uneasy, often politically fraught situation Pains: and subverts Beijing’s efforts to build a de½ned by of½cial adherence to traditional, Challenges for a Rising service-oriented government. As central often ineffectual modes of government China leaders move away from a singular focus policy-making at the national level and on economic growth to a broader array of crisis-management at the local level.” Yet concerns encompassing corruption con- she also looks more hopefully to a rising trol, stability maintenance, social welfare, urban middle class, armed with Internet and environmental protection, the inter- access, that “is changing the relative power ests and incentives of central and local dynamic between the state and society.” governments are no longer closely aligned. To date, Beijing’s reluctance to tighten In short, China’s ongoing process of “re - the reins on the localities has redounded form and opening” remains fluid and high- in its favor by deflecting public grievances ly unpredictable. While few would deny from central to local authorities, but the the stunning strides of the past thirty years, continuation of this decentralized ad - the very successes of earlier programs and ministrative system means that “the peo- policies have generated new and dif½cult ple who have borne much of the cost of problems that may well demand a more this rapid development have been those thoroughgoing recon½guration of political who should have been its bene½ciaries: institutions and operations than the top the local residents.” leadership has yet been willing to under- The decentralized governance system take. But this does not necessarily mean also presents major problems for envi- that democratization is on the immediate ronmental protection, an issue that is of horizon. Nor does it relieve us of respon- growing concern not only to China’s own sibility for taking a serious look at the ways residents but to the global community at in which China is coping with current di - large. Pollutants from China’s coal-½red lemmas. However long or short the future power plants fall as acid rain on Seoul of the Chinese Communist system may be, and Tokyo, and even much of the partic- the complex challenges of attaining and ulate pollution hanging over Los Angeles balancing goals of economic development, these days reportedly originates in China.6 of½cial accountability, environmental pro - Observing that China’s environmental tection, poverty reduction, and social equi- protection record fares badly by almost ty will surely remain high on both Chinese any comparative measure, Elizabeth Econ- and global agendas. omy places the blame squarely on the sys- Taken as a whole, the prc’s approach to tem of governance: “At the heart of the policy challenges is in many ways unique, Chinese government’s inability to protect thanks to the country’s unusual size and the environment is the country’s own par- regional diversity, as well as to its distinc- ticular mix of political institutions, pro - tive revolutionary history and current cesses, and incentive structures.” While political-economic con½guration. Yet as this administrative con½guration may have the essays in this volume demonstrate, served China surprisingly well during the placing particular policy approaches in preceding decades of head-spinning eco- com parative perspective is illuminating, nomic growth, it appears less well suited not least because different policy domains to the more diverse policy agenda that the evoke different parallels. China’s rapid center is increasingly anxious to pursue. eco nomic growth invites comparison to Echoing the conclusion of other essays in the other developmental states of East this issue of Dædalus, Economy detects “an Asia, while its dif½culties in delivering

12 Dædalus, the Journal ofthe American Academy of Arts & Sciences social welfare may be better understood bled by serious transnational challenges Elizabeth J. in the context of other large and uneven that range from pandemics and climate Perry late developers like India and Brazil. The change to ½nancial meltdowns and ter- Communist party-state’s response to rorism. Institutions of governance as dif- Internet activism and social unrest might ferent as the Chinese Communist Polit- seem at ½rst blush comparable only to buro and the U.S. Congress ½nd them- other authoritarian systems, yet several of selves severely tested both ideologically the essays draw telling comparisons (and and operationally in trying to address such contrasts) with the United States as well. issues. We would be foolhardy to dis regard Thinking comparatively about global or discount China’s efforts to resolve dilemmas is of more than academic in - global problems simply because we predict terest. We live today in a fragile yet inter- that its political system is some day des- dependent post–Cold War world trou- tined to disappear.

endnotes 1 Elizabeth J. Perry, Anyuan: Mining China’s Revolutionary Tradition (Berkeley: University of California Press, 2012). 2 Elizabeth J. Perry, “Cultural Governance in Contemporary China: ‘Re-Orienting’ Party Pro - paganda,” Harvard-Yenching Institute Working Paper Series (2013). 3 Sebastian Heilmann and Elizabeth J. Perry, eds., Mao’s Invisible Hand: The Political Origins of Adaptive Governance in China (Cambridge, Mass.: Harvard University Press, 2011); and Martin K. Dimitrov, ed., Why Communism Did Not Collapse: Understanding Authoritarian Regime Resilience in Asia and Europe (New York: Cambridge University Press, 2013). 4 For more on the Mao-era origins of China’s urban-rural divide, see Jeremy Brown, City versus Countryside in Mao’s China: Negotiating the Divide (New York: Cambridge University Press, 2012). 5 Elizabeth J. Perry, Challenging the Mandate of Heaven: Social Protest and State Power in China (Armonk, N.Y.: M.E. Sharpe, 2002). 6 Joseph Kahn and Jim Yardley, “As China Roars, Pollution Reaches Deadly Extremes,” The New York Times, August 26, 2007.

143 (2) Spring 2014 13 China’s Economy: Complacency, Crisis & the Challenge of Reform

Barry Naughton

Abstract: China’s economic success has bred a new complacency and resistance to change. This in turn has created a credibility crisis, as many Chinese citizens believe the opposition of vested interests makes reform impossible. However, proponents of economic reform argue that the current economic strategy is unsustainable. They point to reform backsliding, overinvestment, and ½nancial fragility as problems that will collide with an inevitable economic slowdown caused by rapid demographic changes, and that will potentially cause economic and political crisis. Renewed economic reform is thus the only prudent and viable choice. The November 2013 Third Plenum shows that China’s leaders have tentatively accepted the need for reform.

At ½rst look, it seems that China’s new leadership assumed power at the pinnacle of economic success. Immediately upon putting their new administration in place, General Secretary Xi Jinping and Premier Li Keqiang made clear their belief that China’s new economic clout entitles it to a position of greater respect and global influence than ever before. In fact, China’s economy had already become a certi½able “growth miracle” when the previous administra- tion of General Secretary Hu Jintao and Premier Wen Jiabao took power in 2003. At that time, China’s economy had already sustained a torrid annual growth rate of 9.6 percent over twenty-four years, a period begun by the major economic reforms of BARRY NAUGHTON is Professor 1978. But in the decade spanning 2003 to 2012, of Chinese Economy and the Sok- which included the global ½nancial crisis, China’s wanlok Chair of Chinese Interna- growth actually accelerated, reaching 10.4 percent tional Affairs at the University of annually.1 China overcame the global crisis by California, San Diego. His books pouring resources into investment and accelerating include The Chinese Economy: Tran- the already eye-watering speed of its infrastructure sitions and Growth (2007), Growing gdp Out of the Plan: Chinese Economic build-out. Per capita has pushed over the upper- Reform, 1978–1993 (1995), and the middle income threshold. Not surprisingly, then, edited volume Wu Jinglian: Voice of an air of triumphalism began to creep into Chinese Reform in China (2013). attitudes and government proclamations. Surpassing

© 2014 by Barry Naughton doi:10.1162/DAED_a_00269 14 the Japanese economy in aggregate size, But nothing much happened, and there Barry and becoming the second largest economy was no follow-through. Today, in Beijing, Naughton in the world, was a particular point of pride there is a widespread perception that the for China. past ten years have been a “lost decade” Transformation at this pace inevitably insofar as market-oriented economic re - creates enormous stresses and strains. form is concerned. This does not mean that Besides the dislocation, the inequities, and Wen Jiabao presided over a do-nothing the environmental costs, headlong growth administration. Rather, on the social front, also led to another problem: as incomes Wen cut taxes on the rural economy and grew, the impetus for market-oriented eco- boosted spending on education and med- nomic reforms diminished. As Wu Jinglian, ical care; he created the foundation for the dean of China’s reform-oriented econ- rudimentary national systems of health omists, put it, “As life got comfortable, insurance and pensions; and he increased reforms stopped.”2 During the 1990s, defense outlays, contributing to a stronger driven by profound economic and politi- military, which most Chinese citizens cal crises, the Chinese government had certainly see as a positive. The Hu–Wen pushed through a procession of funda- administration was energetic in spending mental economic reforms. Under Premier money, which was acceptable simply Zhu Rongji, China between 1993 and 1999 because they had the money to spend. enacted a series of deep and dif½cult However, in terms of creating the institu- reforms of the ½scal, ½nancial, and market tional framework on which future pros- systems. These reforms culminated in perity would depend, the outgoing admin- the massive downsizing of the Chinese istration achieved almost nothing. state enterprises sector from 1996 to 2001, and were sealed by China’s entry It is common for Chinese citizens to into the World Trade Organization in 2001, explain reform stagnation, or the defeat thereby locking in many of the most of individual reform initiatives, by refer- important reforms. As a result of these ring to the increased strength of “vested reforms, the Hu–Wen administration interests.” Even the current Chinese pre- inherited a highly favorable economic mier, Li Keqiang, regularly refers to the position when it took power in 2003: the need to manage and minimize interest previous administration had paid a sub- group opposition if his current reform stantial price to break down the old system proposals are to advance successfully.3 But and lay the foundation for a new, better- who, exactly, are these vested interests? functioning economy, but had only just The idea of “vested interests” covers a begun to enjoy the bene½ts. Hu and Wen broad spectrum. At one extreme, the op- were poised, as the Chinese saying puts it, position of interest groups to reforms to enjoy the shade of the trees planted by shades into and becomes identical with the ancestors. the problem of corruption. Some vested At ½rst, the Hu–Wen administration interests are well-connected families, cor- seemed ready to follow the reform trajecto- rupt of½cials, and even criminal gangs. But ry of the previous Jiang Zemin–Zhu Rongji at the other end of the spectrum, the prob - administration, retaining many of the lem of vested interests is created by the same economic technocrats. The admin- stabilization of the entire Communist istration’s initial economic proposals were Party–dominated economic and govern- full of good ideas, and represented a robust mental system. The easiest way to see this program for a continuation of reform. is through China’s budgetary history

143 (2) Spring 2014 15 China’s (Figure 1). From the beginning of reform Technology megaprojects, cultural vanity Economy: in 1978 until 1995, budgetary revenues as a projects, global propaganda initiatives: if Compla - cency, share of gdp declined nearly every year. a top leader wants it badly enough, the Crisis Indeed, the productive era of the 1990s mon ey can be found. Even the universi- & the Challenge reforms was driven by an acute budgetary ties have plenty of money. Virtually every- of Reform crisis. Zhu’s reforms included a new tax one in a position of authority has a bigger system and new ½nancial discipline that budget, is better off, and has plenty to do. staunched losses in the state enterprise Bitter disputes over resource allocation are sector. As state ½rms were chopped back less salient, and side payments can be and restructured, the few that survived made to buy off dissenters. As the flow of made a sustained return to pro½tability, resources through the party- and state- which increased resources available to na- dominated sectors of the economy in- tional leaders both directly and indirectly. creased and stabilized, the system naturally Figure 1 also shows that after 1995, the became organized around that flow. State- trend turned dramatically, and budgetary owned enterprises returned to ½nancial revenues as a share of gdp increased every health, bene½ting from the radical down- year between 1995 and 2012. The result sizing and restructuring that Zhu Rongji was an enormous increase in the volume had pushed through at such cost in the late of resources available to the system. 1990s. With a few entry barriers, and a lit- A few numbers can give a sense of the tle manipulation, combined with genuine magnitude of this transformation. As bottom-up economic growth, the state- Figure 1 shows, Chinese budget revenues owned enterprises were transformed from increased from 10.8 percent of gdp in 1995 a burden to an asset. The most extreme to 22.6 percent of gdp in 2012. Doubling example is China Mobile, the state-run the budget’s take of gdp in seventeen company that not only is by far the largest years is a substantial achievement, but telecom operator in the world, with over we must also consider the rapid growth 700 million subscribers, but also sits on of gdp itself: real budgetary revenues one of the biggest corporate cash piles in (deflated by the Consumer Price Index) Asia, with $64 billion in the bank.5 were almost exactly twenty times in 2012 At the same time, the reconstruction of what they had been in 1995. In 2012-con- the party apparatus and the rationaliza- stant usd, the value of Chinese budget- tion of party-state career paths have given ary revenues has increased from $113 bil- the system a new stability and predictabili- lion in 1995 to $1.86 trillion in 2012. These ty. Trajectories of a career in government numbers look like some kind of spread- have become more knowable, as the re - sheet error, but they are not.4 Chinese quirements for promotion have become government revenues (central and local increasingly routinized. Steady promotion, consolidated) are about equal to the U.S. in turn, leads to abundant and increasing federal government on-budget revenues, opportunities to earn outside income. Stu- excluding social security, which are esti- dents in elite universities have increas- mated by the Congressional Budget Of½ce ingly come to see government as the most at $1.97 trillion for 2012. attractive career option. In other words, Less than two decades since the coun- the stagnation of reform was not merely try faced a potential crisis of state capacity, short-run complacency and procrastina- the Chinese system is now awash in cash. tion; rather, it reflected the long-term sta- Money is available not just for the critical bilization of the system. The hierarchical necessities, but for elective projects as well. Chi nese political system, which had to be

16 Dædalus, the Journal ofthe American Academy of Arts & Sciences Figure 1 Barry China’s Budget Share in gdp, 1978–2012 Naughton

Source: Chinese of½cial data, updated most recently with the National Bureau of Statistics, Zhongguo Tongji Zhaiyao 2013 [China Statistical Abstract 2013] (Beijing: Zhongguo Tongji, 2013).

constantly remade in the 1980s and 1990s in tions. Of course, at the same time, the order to adapt to new challenges, is today private sector has grown tremendously; no longer driven by any immediate, inter- and while the state sector has stopped nal sense of crisis. Instead, the Chinese sys- shrinking in absolute terms, the growing tem–perhaps like most systems in the private sector makes up a steadily larger world–is engaged primarily in reproduc- share of the overall economy. However, ing itself more or less as it is. The biggest private business owners now sense in- vested interest, then, is the interest repre- creased competition from state ½rms, and sented by the Communist Party itself. an increased need for accommodation with savvy power holders–with “vested The new stability of the system is viewed interests”–who can help extract bene½ts warily by those outside its embrace. In from the booming economy and from pri- the ½rst place, there is a widespread vate businesses. perception–both inside and outside China Even more important, an awareness of –that it is increasingly dif½cult to do busi- the stagnation of reform in China over ness in China without political connec- the past decade has gradually seeped into

143 (2) Spring 2014 17 China’s public consciousness, producing an inter- ping backward? Acutely aware of this Economy: esting disconnect. Over the past ten years, public sentiment, both Xi Jinping and Li Compla - cency, the government’s propaganda organs Keqiang have been critical of the gap Crisis have continued to trumpet the indispens- between rhetoric and action: Xi spent his & the Challenge ability of economic reform. Every few ½rst months in power denouncing “empty of Reform years, major new reforms are discussed, talk.” It is clear that those engaging in and policies are implemented, but they empty talk are, in fact, Xi’s predecessors, have little impact. As a result, of½cial pro- but is it clear that Xi will be any different? nouncements have lost credibility, and More broadly, why would those who this loss, combined with the stabilization bene½t so abundantly from the current of China’s system and the greater influ- system act to change it? Why would any- ence of interest groups, has led to a crisis of body change a model that seems to have con½dence in China’s ability to change. delivered such abundant resources and This type of credibility crisis is something success? quite new in China, although it has been commonplace in the United States and Remarkably, economic reform is not other economically developed societies dead in China and is in fact experiencing for some time. Such a crisis in con½dence a resurgence. Reformers have important is characterized by the belief that prob- positions in the new government and in lems are peculiarly entrenched and in- the country’s most influential business tractable, and nothing really can be done media. At their core, these reformers about them, with only the extremely have only one argument, but it is a pow- naive believing otherwise. This type of erful one: that the current economic situ- cynicism was, until recently, almost com- ation and policy trajectory are simply not pletely absent in China. China had been sustainable. Economic conditions are changing so rapidly that it was apparent changing rapidly, and the current way of to everyone that the future was, if nothing doing business risks serious crisis. The else, full of different possibilities, even if most dangerous course of action is there- the present was impoverished. That sense fore not to reform, in effect remaining on of con½dence about the future seems to the current course. If policy-makers do not have vanished in China. preempt the changes that are coming, then Understanding this facet of the public change will be disruptive and potentially mood is important to understanding the devastating. But there is still time to act. recent pronouncements of China’s new The unsustainability argument has four leaders, and their reception. Both Xi key components. First, the failure to sub- Jinping and Li Keqiang made rather bold stantially improve the quality of China’s pronouncements in favor of restarting economic institutions will begin to grad- market-oriented reforms in the early ually erode the pace of productivity im- stages of power transition in late 2012. provement. China’s total factor produc- Yet the popular response to these procla- tivity has increased dramatically during mations was only mildly positive: “Really? the reform era, and grew strongly through We’ll believe it when we see it.” A palpa- most of the ½rst decade of the century. ble skepticism about reform is thus part This productivity improvement has been of a broader crisis of con½dence. Can diffuse and attributable to multiple causes, China change? Has government and pol- including the learning and adoption of icy been captured by interest groups, such new technologies, as well as improved that no change is possible? Is China slip- institutions. A key link has been the will-

18 Dædalus, the Journal ofthe American Academy of Arts & Sciences ingness to let underperforming entities for more than a couple of years. In 2007, Barry fail, concentrating production in the most Premier Wen Jiabao described China’s Naughton competitive and productive ½rms. How- economy as “unstable, unbalanced, un- ever, the strength of this competitive coordinated, and unsustainable,” and mechanism seems to have waned in recent since that time, the unprecedented de- years, and without a new wave of reform, pendency on state investment has only productivity growth will continue to slow. further unbalanced the economy. Productivity is not simple to measure; What’s wrong with this investment- there are time lags both in the appearance driven, unbalanced growth? After all, of productivity effects and in our ability investment-led growth has served the to measure them. So by the time econo- Chinese economy well over the past two mists have formed an academically rigor- decades. One of the great paradoxes of the ous judgment, it is quite late to do any- Chinese economy is that although house- thing about it. But in the interim, policy- hold consumption is an unusually low makers will look at growth rates com- share of total gdp (35 percent), household pared to investment rates. There are many consumption has also grown extremely reasons why growth should slow, but as rapidly over the past decade, only not as long as investment rates stay high, policy- fast as overall gdp. And if you can have makers will take declining growth rates both more consumption and more in - as evidence that something is wrong with vestment, why not have it all? Well, be - their system’s productivity, and will be cause it is probably just not possible. motivated to push harder for reforms. Economists do not have any logical limit Second, the limits to investment-driven to how high a country’s investment rate growth are appearing. China was able to can be, or for how long. But all previous sidestep the worst of the global ½nancial high-growth economies have eventually crisis by increasing domestic investment. come to a point where investment rates gdp growth scarcely dropped because the subside, and usually at levels well below increase in domestic investment almost the current Chinese level. In the past, with completely offset the drop in net exports. unlimited supplies of labor, investment But this success was achieved at substan- was the key growth driver. All that was tial cost. Because the stimulus program needed to bring that labor out of the coun- was so rushed, some unknown proportion tryside was new industrial plant and infra - of new investment was doubtless wasted structure. Moreover, as a follower econo- on useless projects, although we have no my, planners and businesses could focus way of knowing how large that propor- on transplanting business models, tech- tion is. More fundamental, as Figure 2 nologies, and infrastructure layouts from shows, the investment surge of 2009 was developed countries. The system delivered not a one-off stimulus. Instead, China’s investment, and investment delivered investment rate moved more or less per- growth. That equation is no longer so sim- manently to a higher level. Since 2009, ple. Matching the right investment to the China has been investing a remarkable 48 evolving needs of the economy is becom- percent of gdp. An investment effort of ing much more dif½cult. The fundamental this magnitude is completely unprece- infrastructure framework China’s plan- dented for a large economy. Japan, Korea, ners copied from more advanced econ- Malaysia, and Thailand all drove growth omies is nearing completion. Meanwhile, with investment, but none of them ran excess capacity has emerged in many in - investment rates that exceeded 40 percent dustrial sectors as the economy has slowed.

143 (2) Spring 2014 19 China’s Figure 2 Economy: Investment and Net Exports (Share of gdp), 1978–2012 Compla - cency, Crisis & the Challenge of Reform

Source: Chinese of½cial data, updated most recently with the National Bureau of Statistics, Zhongguo Tongji Zhaiyao 2013 [China Statistical Abstract 2013] (Beijing: Zhongguo Tongji, 2013).

These suggest that China may be ap - rises that investment from the private sec- proaching the limits of this development tor will drop. strategy. Moreover, investment has an in - Third, past investment excesses have herent tendency toward instability, since already created ½nancial fragility. The huge it is driven by investors’ expectations of quantity of new ½xed assets the Chinese the future. While consumption is relatively economy has created over the past ½ve stable, investment is subject to the “ani- years is just now coming onstream. Many mal spirits” of those making decisions. In of these assets are housed in corporate China, the government’s willingness to structures that have no good business serve as the reliable investor of last resort model. The extreme example is China’s has also kept the investment propensity gleaming new high-speed rail network. of private businesses high. The two have The system has a current debt load equiv- been in a productive symbiosis that thus alent to $429 billion. Whether or not a far has served the economy well. As the massive high-speed rail is worth building momentum of the economy slows and is one question–about which opinions existing opportunities close off, the danger differ–but whether there is a revenue

20 Dædalus, the Journal ofthe American Academy of Arts & Sciences model to service this enormous debt is Fourth, China is going through profound Barry another question altogether. Outside of a changes in its labor markets that point to Naughton few high-capacity lines like Beijing-Shang- substantially slower growth. For decades, hai, most observers doubt it. The challenge employers had been able to hire at will is mirrored by literally thousands of local new workers migrating from the country- government projects and “funding plat- side, offering a wage that changed little forms” around the country. Encouraged to through the 1990s and early 2000s. But invest following the global ½nancial crisis, some time after the mid-2000s, competi- these local governments now face debts tion for workers began to drive up un - they cannot service with the income skilled wages. By 2012, real wages for mi- streams they can plausibly generate grant workers were two and a half times through user fees and sales revenues. In the what they had been in 2003, increasing aggregate, this debt amounts to more than by 10.8 percent annually. This dramatic $1.6 trillion, by of½cial estimates. Put to - change in labor market conditions led gether, these two debt loads amount to 25 many observers to proclaim “the end of percent of China’s gdp. cheap China.” The sudden change also Chinese regulators and ½nancial sector revived interest in a so-called Lewis turn- of½cials are well aware of these problems. ing point, a structural shift that occurs They have been pushing China’s state when the reservoir of surplus labor in the banks to increase bad loan provisions and countryside is ½nally depleted, and em - raise capital; they will certainly not be ployers have to pay higher wages to draw caught by surprise. Nonetheless, the hard people out of agricultural work.6 In past work of actually restructuring these cor- Asian growth “miracles,” the arrival of a porations has barely begun. Indeed, it can Lewis turning point often signaled the end hardly proceed in the current inherited of the very-high-growth period. Rapid environment: credit is still flowing freely; growth of unskilled wages tends to force shambolic state-backed corporations have the end of an early growth phase led by the easy access not just to bank loans but also export of labor-intensive manufactures. to nascent bond markets; and govern- Economies start to lose comparative ad - ments turn to short-term ½nancial mar- vantage in clothing, shoes, and toys, and kets to fund long-term debts. Some kind export growth becomes a less important of credit squeeze will be necessary to demand-side driver of growth. These drive forward ½nancial restructuring, forces are now operating in China, and and both the squeeze and the restructur- since export demand from the European ing will be painful. Yet the longer ½nancial Union, Japan, and the United States is likely restructuring is delayed, the longer re- to be weak for the immediate future, ex - sources will flow into low-productivity or ports will make a much smaller contribu- no-productivity projects and corporations. tion to China’s future growth than they did The creation of a vast sector of “zombie during the past decade. ½rms,” neither dead nor alive, would ulti- Just as rural labor surpluses were be - mately create a far larger and more dan- ginning to disappear, China reached gerous risk of ½nancial panic and collapse. another crucial turning point. In 2012, the The relevant comparison is with Japan in population at working age began to de - the 1990s, when the delay of ½ nancial re - cline. This is an entirely different type of structuring kept numerous zombie ½rms demographic transition, accelerated by alive, and kept the economy from recover- China’s draconian birth control policies. ing for an entire “lost decade.” Previously, China had been experiencing

143 (2) Spring 2014 21 China’s a “demographic dividend” in which the economies such as Japan, Korea, and Tai- Economy: population at working age was growing wan moved out of their very-high-growth Compla - cency, more rapidly than the overall population. phases, they each faced major challenges Crisis As a result, dependency ratios decreased to their growth models. Japan’s growth & the Challenge and the work force became younger and rate dropped sharply in 1973, and then of Reform better educated. However, as the essay by again in the 1990s. Never again did Japan Deborah Davis in this issue details, China’s come anywhere close to replicating the demographic dividend is now exhausted– high growth rates of the 1950s and 1960s. as it eventually had to be–and China’s Similarly, the end of the Korean high- population has begun to age and experi- growth phase in 1997 arrived with the ence a higher (elderly) dependency ratio. Asian ½nancial crisis, massive ½nancial The working age population has reached distress and restructuring, and a perma- a plateau, and will start to decline rapidly nently lower growth rate. The evidence is in absolute size by 2020. The fact that the clear that if China does not handle this tran- Lewis turning point and the end of the sition well, it could have a substantial eco- demographic dividend are occurring at nomic price to pay. the same time means that the shift in labor force conditions will be unusually At this point, a broader argument about abrupt. For comparison, Japan’s labor the nature of China’s economy and society force began to shrink about twenty-½ve comes into play. Typically, as forerunner years after the end of its high-growth era– economies have reached the end of their when the country was already quite rich– high-growth phases, they have upgraded and Korea’s labor force began to shrink into high technology and more sophisti- about ½fteen years after the end of its high- cated sectors. China clearly hopes to follow growth era. In China, these two changes this lead. To prepare, China has invested are occurring simultaneously. massively in university education since The structural changes in China’s labor 2001, and has also begun to pour govern- force mean growth is bound to slow; but ment money into research and develop- this does not have to be a bad thing. After ment in promising “emerging” industrial all, higher wages mean that incomes are sectors. Last year, China invested just shy growing, that people are better off, and of 2 percent of its gdp into research and that there is an opportunity to shift the development, a sum much greater than pattern of economic development so that that of other economies at comparable it provides a greater share of output for levels of gdp per capita. But ordinarily, household consumption. Moreover, China forerunner economies have facilitated this is a huge continental economy and does upgrading process by transitioning into not have to tie its economic growth only more of a “light touch” role for government to its export strategy. Chinese incomes support for development, and a broader overall are still relatively low and there is liberalization of economic and social con- plenty of room for catch-up. So this struc- ditions. Thus, the government typically tural change is a huge challenge, but not hands off more of the responsibility for necessarily a looming disaster. This is a development to the private sector, and transition that must be managed carefully, relies on dispersed entrepreneurship to but one that can lead to a much more pro- identify and exploit the promising new ductive and capable society overall. Here, sectors. In China, the movement in recent though, the record of Asia’s earlier “mir- years has not been in this direction. Gov- acle economies” advise caution. When ernment, flush with money, has stepped

22 Dædalus, the Journal ofthe American Academy of Arts & Sciences up its own direct role in technology Structural changes in the growth poten- Barry research and innovation. Entry barriers tial are intersecting with ½nancial fragilities Naughton that have long since fallen away for ordi- linked closely to the post-2009 investment nary manufacturing sectors are still in surge. Growth slowdown will force the place for high value services such as ½- hand of policy-makers. Otherwise, the nance and information (including Internet danger that unaddressed problems will businesses). There is a very real danger lead to a broader loss of con½dence may that a top-down, state-directed program grow, and threaten the system’s ability to of innovation, combined with state con- stably reproduce itself. The reformers trol of large swathes of the economy, will argue that without further market-oriented end up retarding China’s essential gradu- reform, there is no way to resolve these ation toward an innovative, diverse, and challenges. In a sense, Xi and Li have in- resilient economy. herited a situation that is the exact oppo- Today’s China clearly faces a set of site of the one inherited by Hu and Wen ten challenges that are different from those years earlier. The Xi–Li economy looks in the past. China must upgrade the quality good, but it comes with a legacy of deferred of its human resources; identify the sec- problems and unresolved issues. Xi and Li tors, products, and services where oppor- still have a chance to address these prob- tunities lie; and transition from a follower lems, to move China toward a path of sus- economy to a position at the global fron- tainable, but slower, growth, but they have tier in numerous sectors. Can it do those to do so promptly, before a host of bills things without also further scaling back comes due. The timing of this is not under the power of the state, eliminating visible the control of Chinese policy-makers. and invisible barriers to the growth of By tradition, one year after the Com- innovative businesses, and empowering munist Party Central Committee is ½rst households to make more of the funda- empanelled, each new Chinese adminis- mental economic decisions? It seems un- tration convenes a Third Plenary Session likely, which leads us back to the problem in order to lay out its economic program. of economic reform. In the past–especially in 1978 and 1993– this Third Plenum has marked a turning The reform proponents’ arguments point, the initiation or revitalization of a about sustainability have a high degree of major reform program. Xi Jinping and Li internal coherence, and also great immedi- Keqiang convened their own Third Plenum acy. In the ½rst place, the current changes from November 9 through November 12, in the external economic environment 2013, and produced a strong reform docu- are obvious for all to see. Slowing labor ment that addressed key economic issues force growth, soaring wages, and rapidly while also expanding well beyond the changing cost structures and competitive- strictly economic realm. The document ness are part of daily life for all Chinese that emerged is best characterized as part citizens. But these changes directly imply vision statement and part to-do list. The that the existing economic strategy has vision statement is an essential part of a reached its limits. In fact, all four of the document of this type, which emerges out fundamental challenges described above of a long consensus-building process with- are reaching a climax at the same time. in the Communist Party leadership. This Investment-led growth is running out of process tends to generate broad statements steam just as the productivity dividend of principle, plus (at best) a few compelling from previous reforms risks reversal. slogans. To a certain extent, the 2013 Third

143 (2) Spring 2014 23 China’s Plenum resolution shares these features, out the core economic elements of this Economy: but the content is surprising. It calls for a initial reform package. It is striking that Compla - cency, rede½ned role for government, with gov- the framers of the document have provided Crisis ernment playing a reduced role in micro- a number of tangible commitments that & the Challenge economic decision-making, the market will serve as benchmarks by which to of Reform playing a “decisive role” in resource allo- judge whether or not the reforms are cation, and the development of new actually implemented. Further, Xi Jinping models of social governance. It does not personally and publicly identi½ed with shy away from key areas of ½nancial and the resolution in a remarkable account he ½scal reforms, and it marks a clear effort published the week following the Third to revitalize reform in the state-owned Plenum, stressing his chairmanship of the enterprise sector. This vision is surprising drafting committee and his deep engage- because it revives a rhetoric and vocabu- ment with the entire process. Xi, we would lary not much in evidence in China lately, say, took personal ownership of the docu- and it charts a course that is very different ment. By crafting a document designed to from many of today’s policies. The to-do impress, by including concrete and observ- list, meanwhile, is extremely ambitious. able contents along with the more abstract Laid out in sixty articles and comprising goals, and by encouraging personal iden- well over three hundred policy measures, ti½cation with the resolution, Xi Jinping the to-do list commits the regime to an is clearly signaling his intention to pur- impressively broad array of actions, rang- sue this agenda.7 ing from relaxing the single-child birth Of course, actually implementing these control policy to increasing the share of ambitious goals is far more dif½cult than dividends that state-owned enterprises merely stating them. This, in turn, leads hand over to the government and its social to our ½nal question: can Chinese policy- welfare funds. makers act preemptively, dismantling their The Third Plenum resolution is best own special privileges, before the arrival understood within the context of achieve- of a serious economic crisis? The ques- ment, change, and credibility crisis de- tion is not only whether reform propo- scribed above. Xi Jinping and Li Keqiang nents can overcome the entrenched power –and their secretaries and advisers– of vested interests, but also whether they clearly exerted a major effort to make the can overcome such power in the absence Third Plenum resolution a credible docu- of a full-blown crisis. If the chances for ment that would generate momentum for renewed market reforms were assessed the reform process. In the ½rst instance, solely on the basis of short-run economic they did so by producing a plenum docu- and political conditions, it would be hard ment that was simply bigger than many to be optimistic. In that sense, both the people expected: it was both broader and complacency and the crisis of con½dence more detailed than most previous docu- would be justi½ed; it is dif½cult to make ments. Moreover, the overall approach of an argument for change based on a crisis the document has the potential to create that has not yet hit. a coherent response to the multiple eco- But at the end of the day, the reformers nomic challenges that China faces. Fi - are right that only major institutional nancial reforms, ½scal reforms, and state- changes that make the economy more enterprise reforms are all cued up in the open, competitive, and rule-bound can Third Plenum, and pricing reforms and a avoid the serious problems looming over - reduction in administrative barriers round head. Even these reforms will require

24 Dædalus, the Journal ofthe American Academy of Arts & Sciences adept policy-maneuvering to avoid sub- the transition to a lower growth rate, but Barry merged obstacles. The reformers are right in the context of a wealthier, better-off Naughton about impending changes and potential society. It absolutely has the capability to crises, and they are right about the type of do so, but policy-makers must summon economy and society that China must the will and determination, craft an ef - become in order to be technologically fective proposal, and push for a renewed creative, institutionally flexible, and sup- domestic and foreign opening of the portive of a high standard of living for a economy. majority of its citizens. China must make

endnotes 1 National income, expenditure, and ½scal data in this paper, including those used in Figures 1 and 2, are Chinese of½cial data, updated most recently with the National Bureau of Statistics, Zhongguo Tongji Zhaiyao 2013 [China Statistical Abstract 2013] (Beijing: Zhongguo Tongji, 2013). gdp from the production and expenditure side, see p. 19, 33–35; ½scal data, see p. 72–73. 2 Wu Jinglian, “Toward a Renewal of Reform,” in Wu Jinglian: Voice of Reform in China, ed. Barry Naughton (Cambridge, Mass.: mit Press, 2013), 12. Wu is quoting his close friend Zhang Zhuoyuan. 3 Li Keqiang’s remarks reported in Du Yongtao, Fu Yingnan, Wei Xi, and Liu Yang, “Li Keqiang Emphasizes that the Biggest Dividend that China Enjoys is the Reform Dividend” (in Chinese), People’s Daily Online, November 22, 2012, http://½nance.people.com.cn/n/2012/1122/c1004 -19667962.html. 4 Chinese currency values have been converted to U.S. dollars at prevailing exchange rates, and deflated by the U.S. Consumer Price Index. 5 Daisuke Wakabayashi and Min-jeong Lee, “Samsung’s ‘Good’ Problem: A Growing Cash Pile,” The Wall Street Journal, May 8, 2013, http://online.wsj.com/article/SB10001424127887323798 104578454440307100754.html. 6 Migrant wages from Feng Lu, “Consolidation or Stimulation? Remarks on China’s macro- economic situation and policy,” U.S.-China Economics Dialogue, Beijing, June 19, 2013. For a good collection of academic articles on the Lewis turning point, see the 2011 special issue of China Economic Review, especially the article by the leading proponents of this view, Cai Fang and Du Yang, “Wage Increases, Wage Convergence, and the Lewis Turning Point in China,” China Economic Review 22 (4) (2011): 601–610. The empirical evidence in favor of the Lewis theory in other developing economies is mixed, but China ½ts many of the Lewis model’s predictions. Moreover, China has unique institutions that make the basic Lewis assumption of surplus rural labor more plausible, including collective land ownership and institutional barriers that retard rural-to-urban migration. 7 Chinese Communist Party Central Committee, “Resolution on Several Important Issues on Comprehensively Deepening Reform” (in Chinese), November 12, 2013, http://news.xin huanet.com/politics/2013-11/15/c_118164235.htm. Xi Jinping emphasizes his personal role in Xi Jinping, “An Explanation of the ‘Resolution on Several Important Issues on Comprehen- sively Deepening Reform’” (in Chinese), November 15, 2013, http://politics.people.com.cn/ n/2013/1115/c1001-23559327.html. As of mid-December 2013, there is still no of½cial English translation of the Third Plenum resolution.

143 (2) Spring 2014 25 Demographic Challenges for a Rising China

Deborah S. Davis

Abstract: Looking into the near future, China faces immense demographic challenges. Prolonged sub- replacement fertility has created irreversible conditions for rapid aging of the population, and massive migration to cities has left many villages populated by elderly farmers with no adult children to support them. Soaring divorce rates and high levels of residential dislocation have eroded family stability. To a large extent, government policies created to accelerate economic growth inadvertently fostered these demographic challenges, and now the country is facing the negative consequences of interventions that previously spurred double-digit growth. Legacies of Confucian familism initially blunted pressures on families. Filial sons and daughters sent back remittances, parents cared for migrants’ children and invested in their children’s marriages, and families with four grandparents, two parents, and one child (4+2+1) pooled resources to continuously improve a family’s material well-being. But now the demographic chal- lenges have further intensi½ed and the question arises: can the state adopt new policies that will allow the prototypical 4+2+1 families created by the one-child policy to thrive through 2030?

For more than a millennium, Asia has been the demographic center of the world, and since 1500 China has been the global demographic giant (see Figure 1).1 Sometime in the next ½fteen years India will again overtake China as the largest nation, but demographic challenges within China will shape both China’s future and that of the world.2 In part, China’s continuing global influence flows from its DEBORAH S. DAVIS is Professor sheer size, but as I will discuss, underlying demo- of Sociology at Yale University. graphic dynamics in fertility, urbanization, and Her publications include Creating family formation have created demographic chal- Wealth and Poverty in Postsocialist lenges for which there are no easy answers. Pro- China (edited with Wang Feng, longed sub-replacement fertility in particular has 2009), The Consumer Revolution in created irreversible conditions for rapid aging of Urban China (2000), and Chinese the population, and massive migration to cities has Families in the Post-Mao Era (edited with Stevan Harrell, 1993). For a left many villages populated by frail elders without complete list of publications, see adult children to support them. Promulgation of http://sociology.yale.edu/people/ no-fault divorce legislation and a liberalized sexual deborah-davis. climate, in the context of this rapid aging of the

© 2014 by Deborah S. Davis doi:10.1162/DAED_a_00270 26 Figure 1 Deborah S. World Population, 1000–2000 Davis

80 70 60 50 % Asia 40 % China percent 30 % India 20 10 0 1000 1500 1600 1900 2000

Source: Based on data from Home Maddison, http://www.ggdc.net/maddison/Maddison.htm.

population and high levels of residential resources to continuously improve mate- dislocation, have further eroded the stabil- rial well-being; but now the demographic ity of family life. Government policies cre- challenges have intensi½ed and the ques- ated to jump-start the economy initially al- tion thus arises: can the state adopt new lowed China to reap a demographic divi- policies that will allow the emerging proto- dend. As birth rates plummeted, the ratio typical 4+2+1 families created by the one- of workers to non-workers rose, and sav- child policy to thrive through 2030? ings from child-rearing at both household and community levels spurred investment When China is compared to other na- in education, health, and infrastructure. tions, attention immediately focuses on But after twenty years, the dividend has its unique one-child policy. Nowhere else run out, and China is facing the negative in the world has a central government so consequences of policies that previously systematically imposed such a draconian spurred thirty years of double-digit growth. limit on women’s childbearing. One out- Legacies of Confucian familism initially come is sub-replacement fertility; a second blunted the pressure on families. Filial sons is a rapid and accelerating aging of the and daughters sent back remittances, population. In 1980, less than 6 percent of parents cared for migrants’ children and the Chinese population was 65 or older. invested in their children’s marriages, and Like India and Vietnam, China was a urban families with four grandparents, country dominated by the young. How- two parents, and one child (4+2+1) pooled ever, should birth rates continue at their

143 (2) Spring 2014 27 Demo - current sub-replacement level over the areas. Moreover, the shift is not only due graphic next twenty years (as they are predicted to the fact that more people, particularly Challenges for a Rising to do), by 2030 China will have a slightly those between the ages of 18 and 49, now China higher percentage of elderly than the live and work in cities, but that the num- United States or Russia. By contrast, In - ber of very large cities has also greatly in - dia’s elderly population will have risen to creased. In 1981, there were only eighteen only 8 percent and Vietnam’s to 12 percent cities with a population of more than one (see Figure 2). million; by 2009, there were 129.4 Finally, China’s rapid drop in birth rates did because it is primarily the young who not originate with the one-child policy leave the countryside in search of work in launched in 1980. Rather, birth rates ½rst the cities while those over 50 remain in plunged in the prior decade as a result of the villages, rural China is both “hollow- a nationwide drive to delay marriage and ing out” and quickly “growing grey.” space births.3 The rapid decline in birth Government ambition to jump-start rates between 1970 and 1979, however, does economic growth partially drove the rapid not mean that the one-child policy has had urbanization. Breaking with the Maoist no signi½cant impact. On the contrary, mantra of collective ownership and village by enforcing a one-child limit through- self-reliance, the Deng leadership dis- out urban China as well as in prosperous solved the People’s Communes, encour- peri-urban villages, the policy enforced aged rural entrepreneurship, and, for the sub-replacement fertility rates previously ½rst time in thirty years, allowed rural found only in wealthy countries with a residents to freely ½nd work in cities and high percentage of college-educated wo - towns. Massive migration into industrial men. Moreover, if such low birth rates and service jobs is not unique to China; persist in China at the same time as more in fact, both Japan and Korea experienced women enter college, life expectancy comparable mobility during their rapid increases, and out-migration continues to transitions into industrial giants. However, exceed in-migration, then China’s popu- China’s larger population and its imme- lation will age as quickly as did that of Ger- diate socialist past have made China’s ex - many, Italy, and Japan. However, in con- perience somewhat distinctive. First, the trast to these countries, China will become number of villagers who have moved to old before it becomes rich. In addition, towns and cities is approximately twice because China lacks the national pension the size of the entire Japanese population and medical insurance programs provided and ½ve times that of South Korea. One in these wealthy nations, the next genera- does not want to overemphasize China’s tion of Chinese elderly will face extensive exceptional size, but when considering hardships for which there are no easy so - future policy responses and cross-national lutions. comparisons, the human scale of China’s urbanization cannot be ignored. The second demographic trend that A second distinctive element of China’s poses future challenges is the abrupt urbanization is the continued reliance on switch from a village society of low mo- a nationwide household registration sys- bility to an urban society in which many tem that distinguishes between temporary millions change residence every year. In and permanent urban residents. Designed 1980, less than 20 percent of the popula- in 1958 to ration foodstuffs and control tion lived in cities or towns. By 2010, more population movement, the household than 50 percent had settled in urban registration system maintained through

28 Dædalus, the Journal ofthe American Academy of Arts & Sciences Figure 2 Deborah S. Percent of World Population (in select countries) Age 65 or Older Davis

2030 est 2010 1980 12 Vietnam 5 6 19 US 11 13 19 Russia 10 13 23 Poland 10 14 21 Korea (S) 4 12 32 Japan 9 23 28 Italy 13 20 8 India 4 5 28 Germany 16 21 20 China 5 8

For proportion of elderly and projections for 1980 and 2010 in all ten countries: World Bank, http://data.world bank.org/indicator/SP.POP.65UP.TO.ZS/countries (accessed April 8, 2013); for the projections for European countries: Marija Mamolo and Sergei Scherbov, “Population Projections for 44 European Countries,” http://www .oeaw.ac.at/vid/download/edrp_2_09.pdf (accessed April 9, 2013); for the U.S. projections: Population Division, U.S. Census Bureau, “Population by Age and Sex for the United States: 2010 to 2050” (NP2008-T12), Table 12 (released August 14, 2008), http://www.aoa.gov/Aging_Statistics/future_growth/future_growth.aspx (accessed April 9, 2013); for Japan: Ministry of Internal Affairs, Population Statistics Bureau, http://www.stat.go.jp/english/ data/handbook/c02cont.htm (accessed April 9, 2013); for China: Feng Wang, “Racing towards the Precipice,” China Economic Quarterly (June 2012) and Feng Wang, “The Future of a Demographic Overachiever,” Population and Development Review 37 (s1) (2011): 173–190; for Vietnam: International Futures, http://www.ifs.du.edu/ ifs/frm_CountryPro½le.aspx?Country=VN.

the public security bureau served to and other city residents–divisions re- freeze most rural men in their birth vil- sembling those between undocumented lages and allowed women to move only immigrants and native-born residents in when they married. Since the early 1980s, the United States. At one time, the gov- the Mao-era restrictions on geographic ernment announced it would end this movement have eroded, but by labeling discriminatory system by the start of the new arrivals as “temporary” urban resi- Beijing Olympics. But as of December dents, the household registration system 2013, little has changed, and even those denies them access to subsidized housing, who have lived and worked in the cities education, or medical care in the cities for more than a decade do not have the where they live. As a result, the house- same civil and social rights as permanent hold registration system enforces social urban residents.5 and economic divisions between migrants

143 (2) Spring 2014 29 Demo - In many ways, China’s demographic child policy. But in fact, girls have been graphic shifts since 1980 resemble those of other “missing” and the population therefore Challenges for a Rising fast-growing, industrializing economies. masculinized throughout China’s history. China Birth rates fall as more women complete Demographer Cai Yong estimates that in secondary school, contraception becomes the past hundred years, the sex imbalance cheap and effective, and employers pre- at birth peaked between 1936 and 1940.7 fer women over men for many new non- Nevertheless, the imbalance since 1980 agricultural jobs. As industrial jobs pull reverses a decline that began after 1949. youth away from the countryside and as Equally disturbing, the imbalance has wid- infrastructure improves, the urban popu- ened as a greater percentage of women lations grow and village populations age. conform to the one-child quota. Thus, for As women become more economically example, in 1980 the srb of 108 boys to 100 self-suf½cient and legal reforms tilt to girls barely exceeded the normal range of protect individual civil rights, divorce rates 103–106 boys to every 100 girls; but rise. Yet China’s demographic trajectory since 1990, the ratio has hovered around and patterns of household formation do 120 boys per 100 girls and in 2008 reached not exactly duplicate patterns observed a high of 123.2 before falling to 120 in elsewhere. First, when China plateaued 2010.8 Complete compliance with the one- at sub-replacement fertility, the sex ratio child policy would mean that half of all at birth (srb) became so distorted in families would have no son, an outcome favor of boys that today many millions of that is unacceptable in a society where girls are “missing.” In Europe and the tradition requires all men to have a son to Americas, srb remained unchanged even continue his family line. More practically, as fertility declined. Second, while China’s given the absence of a national system of crude divorce rate (cdr)–that is, the social security or pensions for elderly in number of divorces per 1,000 in the pop- the countryside or those working in the ulation in any one year–has doubled over urban private sector, the one-child limit the past decade, marriage remains nearly promises high levels of ½nancial insecurity universal, and rates of remarriage are in old age. And for those whose ½rst born is increasing. By contrast, in Europe, the a daughter, who by “tradition” will marry Americas, and even Hong Kong and Tai- out to another family, a one-child policy wan, marriage rates are falling. Third, immediately raises the specter of severe childbearing outside of marriage in China impoverishment. Thus, it is hardly surpris- is not only rare, but illegal.6 Speci½c state ing that many Chinese couples have re - interventions have been decisive, but so, sorted to sex-selective abortion to guar- too, has been the continuing influence of antee that they will have at least one son. the norms of Confucian familism, which Again, it is important to compare China have both exacerbated demographic dis- to its Asian neighbors. According to a 2012 tortions and ameliorated the initial con- United Nations Population Fund (unfpa) sequences of rapid urbanization, insecure report, srbs have recently tilted strongly marriages, and falling fertility. to boys in several parts of Asia, beginning in China, India, and South Korea in the I turn ½rst to the demographic masculin- 1980s and since then spreading to Azer- ization created by distorted srb and the baijan, Armenia, Georgia, Montenegro, subsequent problem of “missing girls.” Albania, and Vietnam. Population experts Concern with distorted sex ratios surfaced estimate the global impact is 117 million immediately after the launch of the one- “missing girls” as of 2010, most of them

30 Dædalus, the Journal ofthe American Academy of Arts & Sciences in China and India.9 On the other hand, societies with similar fertility but less dis- Deborah S. as seen recently in South Korea, Singapore, torted sex ratios and from poorer coun- Davis and Taiwan, as well as in China during tries with higher fertility but comparable the ½rst decades after 1949, policy inter- masculinization of the population. ventions can reverse population mas- culinization. The question is whether A second way in which China looks de - China, particularly within the context of mographically distinct not only from the one-child policy, can succeed. Since Europe and the Americas but also from the early 1980s, the Chinese government several Asian neighbors is the recent shift has adopted several policies to reverse in rates of divorce and marriage. During the masculinization of the population. In the Mao era, highly restrictive legal and 1986 they banned sex-selective abortion, regulatory procedures made divorce rare in 1993 they “forbade” it, and in 2002 the except in cases of extreme abuse or polit- prohibition was included in the 2002 Pop- ical stigma. However, as part of Deng’s ulation and Family Planning Law. In ad- commitment to reduce state supervision dition to broad policy initiatives, the gov- and politicization of everyday life, the ernment directly intervened in counties National People’s Congress promulgated where the srb was exceptionally high to a new Marriage Law in 1980, permitting enforce the ban on the use of ultrasound couples to dissolve their marriages outside for sex-selective abortion and to provide the courts whenever both parties agreed bene½ts to families with a single daughter. that mutual affection had completely dis- They also did extensive propaganda work appeared. In 2001 the Marriage Law was to support gender equality and punished further liberalized, and in 2003 the Min- of½cials in villages where srb did not de- istry of Civil Affairs removed the require- cline. After the srb in twenty-four experi- ment that couples seeking either to marry mental counties targeted in the “Care for or to divorce must secure written approval Girls” program fell from 133.8 to 119.6, the from their village head or employer. Not program went national.10 Nevertheless, surprisingly, divorce rates spiked upward the nationwide srb peaked in 2008, and after 2003. In 1980 there were fewer than between 2000 and 2010 the ratio rose even 350,000 divorces, by 1990 there were more among college-educated women. Thus, the than 800,000, in 1995 more than a million, key challenge is not the one-child limit per and in 2011 2.8 million.11 In cities like se, but rather the larger economic, social, Shanghai the rates were higher than in and political conditions that make a one- Taiwan or Hong Kong, and had begun to daughter family unacceptable. For some approach divorce rates in the United families, the key issue is the necessity to States (see Figure 3). continue the patriline and traditions of However, even though the cdr rose ancestor veneration. For others, it is pri- 600 percent between 1980 and 2011, and marily fear of economic insecurity. The by more than a factor of ten in the city of poorest families feel this pressure most Shanghai,12 marriage remains popular. For acutely, but even for those with steady cur- example, the crude marriage rate (cmr: rent income, there is no assurance that the number of marriages per 1,000 in the they can accumulate adequate savings to population in any one year) has risen over provide basic economic survival in old the past decade in China while falling or age. For these reasons, the demographic holding steady elsewhere in East Asia, challenges facing the Chinese government Europe, and North America (see Figure 4). differ signi½cantly both from those of rich In addition, the absolute number of indi-

143 (2) Spring 2014 31 Demo - Figure 3 graphic Crude Divorce Rates, 1980–2008 Challenges for a Rising China 6

5

4 China Shanghai 3 US 2 Taiwan Hong Kong 1

0 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

Sources: For China, 1980–2008: Zhongguo Tongji Nian Jian 2012, http://www.infobank.cn (accessed February 16, 2013); for Shanghai: Shanghai Tongji Nian Jian 2011; for Taiwan: Department of Statistics, Ministry of Interior, http://sowf.moi.gov.tw/stat/month/m1-02.xls; for United States: http://www.census.gov/prod/2011pubs/ 12statab/vitstat.pdf; for Hong Kong: Census and Statistics Department HK (1973–2009).

viduals marrying has recently spiked up - ically possible that in years when many ward. In 2011, twenty-six million people marriages fail, those who divorce will pre- married, a total that was eleven million fer not to risk another failure. In China, greater than in 2000, 2001, or 2002, and a though, the story is on the side of willing- difference that cannot easily be attrib- ness to try again. Nationwide between 1985 uted to a radical increase in the number and 2010, the percentage of those marry- of men and women of marriageable age ing in any one year who had previously in less than a decade.13 Rather, it is more been married rose from 3 percent to 11 likely that the cmr rose after 2003 as a percent.15 Moreover, when one compares result of three factors: slightly larger co- the absolute number of remarried persons hort size, catch-up among those who had by gender, age, and rural/urban residence, postponed marriage, and rising rates of we ½nd that the data contradict a common remarriage after divorce.14 perception that women are unlikely to Given that divorce rates have risen over remarry after divorce. Surveys from 2009 the same period, it is not unexpected that instead indicate that in villages, among remarriage rates would increase in tan- those under age 60, women are far more dem. But on the other hand, it is theoret- likely to have remarried than men, and in

32 Dædalus, the Journal ofthe American Academy of Arts & Sciences Figure 4 Deborah S. Crude Marriage Rate, 2001–2010 Davis

10

9

8

7

6

5

4

3

2

1

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

PRC United States Korea, South Taiwan Japan Singapore Germany France

Source: Taiwan Ministry of Information, http://sowf.moi.gov.tw/stat/english/enational/j23.xls.

cities remarried men outnumber remarried among those born after 1980 (see Figure women only among those over age 50.16 5). It is of course too soon to know what In sum, while marriages in China have percentage from this youngest cohort indeed become increasingly fragile, the will eventually marry, but the upturn in institution of marriage remains norma- cmr, the recent surge in the absolute tively robust. number of marriages, and the rising rate Another demographic indicator that of remarriage document strong commit- speaks to the continued desirability of mar- ment to the institution of marriage and riage is the low percent of never-married suggest that a large majority of those born persons across different age cohorts. Thus after 1980 will marry at least once. The when we compare 2009 rates of never- one demographic group in which rates of marrying, for example, we observe a pat- marriage may fall will be among rural men tern of nearly universal marriage except born after 1980, with the proximate cause

143 (2) Spring 2014 33 Demo - Figure 5 graphic Percentage Never Married (in 2009), by Age, Gender, and Residence Challenges for a Rising China 0.5 0.45 0.4 0.35 0.3 rural men 0.25 rural women 0.2 urban men 0.15 urban women 0.1 0.05 0 25-29 30-34 35-39 40-44 45-49 50-54

Source: Zhongguo renkou he jiuye tongji nianjian 2010 (Chinese Population and Employment Statistical Yearbook 2010), http://www.infobank.cn/IrisBin/Text.dll?db=TJ&no=479213&cs=13957592&str=%BB%E9 (accessed May 14, 2011).

of decline owing to the gender imbalance births outside of marriage, by far the more created by the one-child policy, not a re - important barrier to births outside mar- duced desire to marry. riage is adherence to the norms of patri- lineal familism. Finally, I turn to the persistent and strong As in other Asian societies, marriages linkage between marriage and childbear- are conflated with parenthood and family ing. As in other Asian societies, child- continuation. Therefore, while second bearing in China occurs almost exclusively marriages or those among the elderly may within and after marriage.17 Thus, in stark be legitimately con½gured around care- contrast to recent trends in Europe and the taking or shared livelihood, for young Americas, there are very few extramarital adults in a ½rst marriage, marriage is the births in China, and we observe no necessary ½rst step in a sequence that will signi½cant increase in such births even as lead to pregnancy and the birth of a child young women achieve educational parity to a married couple. Historically, because with men and society becomes noticeably wealthy men were permitted, even en - more accepting of nonmarital sexual couraged, to have multiple consorts, sib- relationships.18 While it is true that Peo- lings in wealthy households often had ple’s Republic of China law prohibits different mothers. At the same time, high

34 Dædalus, the Journal ofthe American Academy of Arts & Sciences mortality of women in childbirth and the joined the group, and in August 2012 the Deborah S. ravages of war and famine meant that chil - Ministry of Education mandated that Davis dren of the poor also often had half- and every province release plans to expand the step-siblings. However, overall, few chil- opportunities for children of rural mi - dren were born to an unmarried woman, grants to sit for high school and university and never-married women could not exams.19 openly raise a biological child as their own. During the high socialist years, this Demography is not destiny. Yet unless a conflation and sequencing of marriage society permits substantial, permanent and parenting became even tighter. The migration of adults, the number of births Marriage Law of 1950 prohibited concu- in any one year forever determines the binage, and the Chinese Communist Party maximum size of each birth cohort. Sim- proclaimed the nuclear family of parents ilarly, unless there is prolonged war with and their children as the cell of society, high male fatalities and/or high maternal while the politicization of private life mortality, the ratio of males to females threatened punishment to those who vio- established at birth will forever shape the lated the orthodox sequence of marriage life chances of that generation and leave followed by parenthood. an indelible imprint on a nation’s demo- To date, the conflation and sequencing graphic pro½le. Consequently, given three of marriage and parenthood continue. decades of low birth rates, high levels of Moreover, the one-child policy has height - sex-selective abortion, rising life expec - ened the value of parenthood for men as tancy and falling maternal mortality, no well as women, as the single child be - wars, and no international in-migration, comes a parent’s “only hope” for a secure it is not dif½cult to identify the key demo- old age. In contrast to the sub-replacement graphic challenges and their impact on fertility and the skewed sex ratios, howev- family life over the next ten or twenty er, this by-product of the one-child policy years. The Chinese population will age has not as negatively affected family life. very rapidly, an increasing percentage of On the contrary, it has increased social and young men will never marry, and a ma - ½nancial supports for children through - jority of people entering retirement after out the country, including new forms of 2020 will face an economically insecure activism among men and women mobi- old age with only one adult child as a lizing as parents in support of better treat - source of support. ment or protection of their children. The None of these trends will surprise the cases of parents ½ling suits in order to re- Chinese leadership. In fact, the govern- ceive compensation for tainted milk pow- ment has already responded to them. der is one well-known example; more re - Recently, the central government man- cent and less well known is the successful dated an improved rural medical insur- mobilization of migrant parents to allow ance system and reduced fees for village their children to take the university en - schools in the hope that the quality and trance exams in the cities where they live security of rural life will improve. In 2011 rather than having to return to the parents’ they instituted a pilot pension program rural county. The group, Citizens United for urban residents. As noted, they have Action for Equal Rights of Education, launched a nationwide campaign to “care formed in Beijing in 2010. Later the group for girls,” and at the Third Plenum in expanded beyond Beijing and drafted pro - November 2013, the leadership announced posals calling for reform. Several lawyers that henceforth couples in which only

143 (2) Spring 2014 35 Demo - one spouse had no siblings could have a over, although the November 2013 Plenum graphic second child. Yet, at best, these shifts gave a small subset of young couples the Challenges for a Rising ameliorate negative outcomes. If life option to have a second child, the one- China expectancies for those who reach age 50 child policy remains in place, and the continue to improve as expected, the el - current leadership appears unwilling to derly population will grow faster than it reject a policy with known negative con- has in the past two decades, and without sequences for the nation and individual massive international migration of single families. At the same time, they continue women under the age of 30, millions of to champion relocation of millions of vil- men now in their twenties will never ½nd lagers to cities and towns without elimi- a bride. Changes in pension and medical nating the discriminatory policies that safety nets can increase quality of life, but deny rural migrants equitable access to they cannot create a new demographic urban social welfare and housing.21 In a pro½le among those born before 2012. recent essay, Asia health policy expert During the previous three decades, Karen Eggleston and her colleagues ask, when birth rates fell below replacement, “Will Demographic Change Slow China’s China reaped a demographic dividend Rise?”22 Relying on a “standard growth from the rising ratio of working-age to accounting model,” they conclude that non-working-age people in the overall demographic trends will slow macrolevel population. As public health policy schol - growth over the next ½ve years, but that ars David Bloom and David Canning the most destabilizing impact of popula- explain in their comparison of China’s tion aging and distorted sex ratios will and India’s demographic challenges, if a arise only after economic growth stalls. society uses the demographic dividend to In contrast, by expanding the analytic lens increase investment in education, health, beyond economic accounting models to and infrastructure, they can translate the factor in dynamics of family life, one can demographic shift into rapid economic already observe deleterious impacts on growth and higher standards of living.20 Chinese society and local communities. Between 1980 and 2000, China bene½ted The national leadership is aware of these from such a virtuous exchange. With India negative consequences, but focused on now entering this demographic position, gdp growth rates and immediate threats the question is whether it can repeat to the political status quo, they have yet China’s experience. The jury is still out. to acknowledge either the root causes or For China, however, the question now long-term consequences of their migra- is how to respond after the demographic tion and population policies that created dividend has been spent. Population aging current demographic challenges. Over the need not halt macroeconomic growth if next decade, the number of 4+2+1 fami- managed well by such public policies that lies will increase, and the ability of the would allow those over 60 to remain eco- leadership to respond to their insecuri- nomically active, encourage transnational ties will decisively affect the quality of migration of working-age adults, improve life as well as rates of economic growth. medical safety nets, or devise new forms of mandated saving. However, as Bloom and Canning explain, such initiatives assume a level of wealth and institutions of ½nancial accountability that we do not yet ½nd in contemporary China. More-

36 Dædalus, the Journal ofthe American Academy of Arts & Sciences endnotes Deborah S. Davis 1 These estimates by historical demographer Angus Maddison; “Asia” includes not only all countries in Northeast, Southeast, and South Asia but also what is now considered the Middle East. 2 United Nations Department of Economic and Social Affairs, Population Division, 2013, http:// esa.un.org/wpp/unpp/p2k0data.asp. 3 Feng Wang, “The Future of a Demographic Overachiever,” Population and Development Review 37 (s1) (2011): 173–190. 4 Xuefei Ren, Urban China (Cambridge: Polity Press, 2013), 11. 5 Kam Wing Chan, “China Internal Migration,” in The Encyclopedia of Global Migration, ed. Immanuel Ness and Peter Bellwood (Oxford: Blackwell, 2012), 1–17. 6 Immigration and Refugee Board of Canada, “China: Treatment of pregnant, unmarried women by state authorities, particularly in Guangdong and Fujian; whether unmarried women are obliged to undergo pregnancy tests by family planning of½cials (2005–April 2009),” CHN103135.E, June 23, 2009, http://www.unhcr.org/refworld/docid/4a7040b626.html (accessed March 29, 2013); and Carl Haub, “Births Outside of Marriage Now Common in Many Countries of Europe,” Population Reference Bureau, November 2010, http://www .prb.org/Articles/2010/birthsoutsidemarriage.aspx. 7 Yong Cai, “China’s Demographic Challenges: Gender Imbalance,” paper presented at China’s Challenges, a conference at the University of Pennsylvania, April 25, 2013. 8 These are adjusted srb ½gures from ibid. In of½cial unadjusted ½gures from the Chinese gov- ernment, the high was 121 in 2004. See http://news.xinhuanet.com/english/china/2013-03/ 05/c_132209268.htm (accessed April 18, 2013). 9 United Nations Population Fund, Asia Paci½c Region Of½ce, Sex Imbalances at Birth: Current Trends, Consequences and Policy Implications, August 2012, http://www.unfpa.org/public/home/ publications/pid/12405. 10 Zijuan Shang, Shuzhao Li, and Marcus Feldman, “Policy Responses of Gender Imbalance in China,” Working Paper No. 123 (Morrison Institute for Population and Resource Studies, Stan- ford University, 2012), http://hsblogs.stanford.edu/morrison/½les/2012/11/125-n0ilb4.pdf. 11 See Zhongguo Tongji Nianjian 2012 [Chinese Statistical Yearbook 2012], online version, http:// www.infobank.cn. 12 In 1980, the cdr in China was 0.35; in 2011, it was 2.07. For Shanghai, the shift in the same period was from 0.27 to 3.39. 13 In 2000, 16.9 million people married; in 2001, 15.9; in 2002, 15.5; and in 2011, more than 26 million. See Zhongguo Tongji Nianjian 2012. According to the 2010 census, the size of cohorts born between 1972 and 1991 is extremely uneven: the youngest cohort (born in 1986–1990) is much larger than those born in 1981–1985 and 1976–1980, but about the same size as those born in 1971–1975. See Carl Haub, “China Releases First 2010 Census,” Population Reference Bureau, 2011, http//www.prb.org/articels/2011 china-census–results aspx (accessed February 26, 2013). 14 Yong Cai, personal communication with author, February 27, 2013. 15 Chinese Statistical Yearbook 2012. 16 Zhongguo renkou he jiuye tongjinianjian 2010 [Chinese Population and Employment Yearbook], http://www.infobank.cn/IrisBin/Text.dll?db=TJ&no=479749&cs=3604210&str=%D4%D9 %BB%E9. In Shanghai, 19.5 percent of all those marrying in 2011 had been previously married, half of whom were women; see Chinese Statistical Yearbook 2012. 17 Gavin Jones and Bina Gubhaju, “Factors Influencing Changes in Mean Age at First Marriage and Proportions Never Marrying in the Low-Fertility Countries of East and South East Asia,” Asian Population Studies 5 (3): 237–265.

143 (2) Spring 2014 37 Demo - 18 Exact rates of extramarital births are dif½cult to compute and compare, but rough estimates graphic for 2007–2009 were 5.6 percent for China, 1.4 percent for Japan, and 3.1 percent for Israel. Challenges By contrast, in France the rate of extramarital births increased from 11 percent in 1980 to 50 for a Rising China percent in 2007, from 12 percent to 44 percent in the United Kingdom, from 18 percent to 40 percent in the United States, and from 4 percent to 28 percent in Spain. See http://www .cdc.gov/nchs/data/databriefs/db18.htm#UScompared and http://en.wikipedia.org/wiki/ Legitimacy_%28law%. 19 Shan Wu, Chengxia Chou, and Yue Song, “Remove Hukou Restrictions and Fight for the Right of Migrant Children,” World Journal Magazine, April 22, 2012, 54–66, as cited by Zai Liang, “Migration, Hukou, and the Prospects of an Integrated Chinese Society,” paper presented at China’s Challenges, a conference at the University of Pennsylvania, April 25, 2013. 20David E. Bloom and David Canning, “Demographics and Development Policy,” Working Paper No. 66 (Program on the Global Demography of Aging, Harvard School of Public Health, 2011), http://www.hsph.harvard.edu/pgda/working.htm. 21 “Resolution on Several Important Issues on Comprehensively Deepening Reform,” Novem- ber 15, 2013, http://news.xinhuanet.com/politics/2013-11/15/c_118164235.htm (accessed No- vember 17, 2013). 22 Karen Eggleston, Jean Oi, Scott Rozelle, Ang Sun, Andrew Walder, and Xueguang Zhou, “Will Demographic Change Slow China’s Rise?” The Journal of Asian Studies 72 (3) (August 2013): 505–518.

38 Dædalus, the Journal ofthe American Academy of Arts & Sciences Soaring Income Gaps: China in Comparative Perspective

Martin King Whyte

Abstract: Despite repeated pledges by China’s leaders to reduce the gap between rich and poor, income inequality has continued to rise. China’s Gini coef½cient, a standard measure of income inequality, was higher in 2007 than in the United States, Russia, or most other societies. Why have China’s income gaps increased so fast and so far, despite programs designed to promote greater equality? Standard explanations, such as income gaps inevitably rising with rapid economic development or in a post-socialist transition, cannot explain the Chinese case. Paradoxically, the sharp rise in inequality is driven more by the legacy of China’s socialist system than by market forces or the global economy. It will not be possible to bring China’s soaring income gaps under control unless the new leaders who took power in 2012–2013 are able to make much more fundamental reforms than have been attempted to date.

During the more than three decades since China’s market reforms were launched in 1978, income gaps between rich and poor citizens have increased sharply. When Mao Zedong died (in 1976), no Chi- nese citizen owned substantial property or could live on inherited wealth. The maximum monthly salary was about 800 yuan, while beginning factory workers earned around 30 yuan (and most rural com- MARTIN KING WHYTE is the mune members much less). Substantial as these John Zwaanstra Professor of Inter- income gaps were, they are nothing like the gaps national Studies and Sociology visible in China today. A minority of Chinese (close and Associate of the Fairbank Cen - to 100 million) remain mired in poverty, while China ter for Chinese Studies at Harvard usd University. He specializes in re - has more than a million millionaires (in ) and search on grassroots social patterns more than two hundred billionaires.1 Rich entre- and trends in China during both preneurs and real estate tycoons often live in palatial the Mao and Reform eras, with a mansions, some designed as exact copies of Euro- focus as well on China’s develop- pean palaces, and their children may drive Ferraris, ment experience and inequality Maseratis, or Lamborghinis; play polo in their patterns in comparative perspec- tive. His most recent book is Myth spare time; and frequent nightclubs where they of the Social Volcano: Perceptions of spend more in one night than the average urban Inequality and Distributive Injustice in family earns in a month. Although China’s top po - Contemporary China (2010). litical leaders do not display such lavish lifestyles or

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00271

39 Soaring have personal fortunes on this scale, re - 1. What has been the trend in national Income cent reports indicate that those connected income inequality in China during the Gaps by family ties to top Chinese Communist reform period? Party (ccp) of½cials, such as Wen Jiabao 2. How does the Chinese trend look in (China’s outgoing premier) and Xi Jinping comparative perspective? (the top ccp leader since November 2012), control businesses and assets ranging well 3. What has caused the sharp rise in the into the millions, if not billions.2 The gap between rich and poor in China children of top of½cials live privileged lives over the last three or more decades? as well, although more in the form of at- 4. Why have past efforts to reverse these tending prestigious foreign universities trends and promote greater equality and being groomed to join the business not been very successful, and can any- and political elite and less in playing polo. thing better be expected from the new Despite their potential to bene½t from initiatives? rising inequality, for more than a decade ccp leaders have voiced alarm at the Before attempting to answer these steadily rising gaps between rich and poor questions, some clarifying comments are that characterize the society they lead, in order. The focus throughout is on the and they have launched a series of pro- national distribution of household in - grams designed to create a more equitable comes in China. However, in all societies, society. Recognizing that the market and particularly in China, there are many reforms launched under the leadership of other types of inequality (for example, in Deng Xiaoping tended to favor coastal re - political power, social status, access to gions and their cities, in 2000 Jiang education, and basic citizenship rights), Zemin (ccp leader between 1989 and and some may be more consequential than 2002) launched a campaign to “develop income in terms of their impact on a fam- the West” by steering state funding and ily’s well-being. For instance, even though foreign investment incentives toward China’s income gaps in 1978 were quite China’s inland provinces. Jiang’s succes- modest compared with other societies, sor, Hu Jintao (ccp leader from 2002 to many of life’s necessities were bureaucrati- 2012), promoted the goal of making China cally allocated rather than available for a more “harmonious society” and insti- purchase. So having more income didn’t tuted a wide range of policies–including get you very much, while Mao Zedong the New Socialist Countryside Construc- didn’t have to pay out of his top, but still tion and the Cooperative Medical Insur- modest, monthly salary for the use of the ance Scheme–designed to better the lot of many resorts that were maintained around the poorest Chinese, particularly in rural the country for his occasional personal areas. More recently, during the transi- use. Urban state employees were provided tion to Hu’s successor, Xi Jinping, the gov - with subsidized housing and a package of ernment on February 4, 2013, announced bene½ts and subsidies that was worth major new initiatives designed to narrow more than their meager monthly salaries, China’s sharp income gaps.3 while rural commune members (then 80 This recent history leads to several percent of the population) received none questions that will be addressed briefly in of these bene½ts and were bound to the the coming pages: soil as virtual “socialist serfs,” unable to migrate and gain access to the of½cial fa- voritism enjoyed by urbanites. Although

40 Dædalus, the Journal ofthe American Academy of Arts & Sciences market reforms since 1978 have sharply tistics, China’s Gini plateaued at around Martin reduced the role of direct bureaucratic 0.49 between 2005 and 2009 but has King Whyte allocation and increased the salience of since declined slightly but steadily, to an family income (while making migration estimated 0.47 in 2012.6 However, in 2012 possible once again), Chinese society re - another group of researchers released a mains a hybrid mix of bureaucratic and survey report suggesting that in 2010 market distribution, with the role of ad - China’s Gini had reached 0.61, which ministrative rank and connections (rather would put China at or near the top of the than income) still very important. world league tables.7 Regardless of how these debates are resolved, the dominant What have been the trends in income picture is clear: China has experienced an inequality nationally in China over the unusually sharp increase in income in - past three decades, and how do they com- equality since the early 1980s and currently pare with other nations? I rely here on ranks fairly high compared to other soci- existing national data on the distribution eties in terms of the size of the gaps be - of net household income, with the extent tween its rich and poor citizens. of income inequality measured by the How can this dramatic increase in summary Gini statistic, ranging from 0, China’s overall income inequality be ex- total equality, to 1, total inequality. The plained? A number of explanations are trend for China over the time period of commonly given. First, some analysts con- interest is displayed in Figure 1, along with tend that when an agrarian country the trends for selected other countries. industrializes, there is a predictable and In the initial year shown in the ½gure inevitable tendency for income gaps to (1981), China’s Gini is estimated at 0.28. increase initially before subsequently de - In the years since 1981, the curve for China clining. They cite a 1955 study by economist moves fairly steadily and steeply upward, Simon Kuznets in support of this “inverted although for a time (from 1995 to 2002) U-curve” trajectory, which is based on the this trend appeared to be leveling off (at notion that as modest numbers of agri- about Gini = 0.46). However, by the last culturalists leave farming for more produc- year shown in the chart, 2007, income tive and lucrative industrial work, income inequality had resumed its climb, reach- inequality will initially increase; but even - ing an estimated Gini of 0.49 in that year.4 tually, when large numbers of agricultur- This is a relatively high degree of income alists have left, the urban middle class has inequality, a level above that reached in grown, and the rural population has the United States, Russia, and the other shrunk, rural wages start to rise and over- countries in the chart according to this all income inequality will decline. metric. However, a Gini of 0.49 is still be - However, explaining China’s increased low the levels reached in a number of income gaps as following the upward arc other countries not shown in the chart of an inevitable inverted U-curve is not (countries in sub-Saharan Africa and Latin credible. Newer cross-national research America, in particular), where Gini levels shows that there is no such consistent over 0.50 and even above 0.60 have been inverted U-curve trend of income in- observed.5 equality with economic development.8 China’s income distribution trends since The experience of other East Asian coun- 2007 are unclear and under debate. Ac- tries, in particular, contradicts the Kuznets cording to a 2013 report by Ma Jiantang, hypothesis. Japan, Taiwan, and South head of China’s National Bureau of Sta- Korea became noted for experiencing

143 (2) Spring 2014 41 Soaring Figure 1 Income Net Household Income Inequality Trends: China Compared with the West, 1981–2007 Gaps

Y-axis = National Net Household Income Distribution Gini Coef½cients x 100. Sources: For China: The 2002 and 2007 ½gures are from Li Shi, Luo Chuliang, and Terry Sicular, “Overview: Income Inequality and Poverty in China, 2002–2007,” in Rising Inequality in China: Challenges to a Harmonious Society, ed. Li Shi, Hiroshi Sato, and Terry Sicular (New York: Cambridge University Press, 2013), 44–84. The 1988 and 1995 ½gures are from Björn Gustafsson, Li Shi, Terry Sicular, and Yue Ximing, “Income Inequality and Spatial Differences in China, 1988, 1995, and 2002,” in Inequality and Public Policy in China, ed. Björn Gustafsson, Li Shi, and Terry Sicular (New York: Cambridge University Press, 2008), 35–60. The 1981 ½gure is from World Bank, Sharing Rising Incomes: Disparities in China (Washington, D.C.: World Bank, 1997). For other countries: Frederick Solt, “Standardizing the World Income Inequality Database,” Social Science Quarterly 90 (2) (June 2009): 231–242, using the latest available update: swiid Version 3.1, December 2011.

“growth with equity.” The gaps between Another common explanation for rich and poor did not widen with initial China’s rising inequality is that it is driven industrialization, and in some periods ac - by that society’s transformation from tually declined, although in more recent centrally planned socialism to an increas- times income inequalities have generally ingly capitalistic economy. Under social- been modestly on the rise in Japan, Taiwan, ism, so this argument goes, private prop- and South Korea (see the Gini trends for erty, inherited wealth, capitalist pro½ts, these countries in Figure 2). The trends in and foreign exploitation play no role, these Asian cases resemble a U-curve while the state and central planners man- more than an inverted U-curve.9 So rapid age production and incomes to meet the economic development can be combined needs of their citizens–in Lenin’s phrase with relatively stable or even improving (from State and Revolution), with “every- income equality, not the wider gaps China one employed for workingmen’s wages.” has experienced. With central planning abandoned, and

42 Dædalus, the Journal ofthe American Academy of Arts & Sciences Figure 2 Martin Net Household Income Inequality Trends: China Compared with East Asia, 1981–2007 King Whyte

Y-axis = National Net Household Income Distribution Gini Coef½cients x 100. Sources: For China: The 2002 and 2007 ½gures are from Li Shi, Luo Chuliang, and Terry Sicular, “Overview: Income Inequality and Poverty in China, 2002–2007,” in Rising Inequality in China: Challenges to a Harmonious Society, ed. Li Shi, Hiroshi Sato, and Terry Sicular (New York: Cambridge University Press, 2013), 44–84. The 1988 and 1995 ½gures are from Björn Gustafsson, Li Shi, Terry Sicular, and Yue Ximing, “Income Inequality and Spatial Differences in China, 1988, 1995, and 2002,” in Inequality and Public Policy in China, ed. Björn Gustafsson, Li Shi, and Terry Sicular (New York: Cambridge University Press, 2008), 35–60. The 1981 ½gure is from World Bank, Sharing Rising Incomes: Disparities in China (Washington, D.C.: World Bank, 1997). For other countries: Frederick Solt, “Standardizing the World Income Inequality Database,” Social Science Quarterly 90 (2) (June 2009): 231–242, using the latest available update: swiid Version 3.1, December 2011. Note that the 2007 entry for Taiwan is actually from 2005 in the swiid database, as a 2007 estimate is not available.

with private property, capitalist and foreign in practice, socialist bureaucrats tend to enterprises, and the pursuit of pro½ts re - produce societies that are quite unequal, turning with a vengeance, the gaps be - although unequal in ways that are some- tween rich and poor inevitably grow. what distinct from capitalism.10 So Yet the idea that abandoning socialism whether a post-socialist transition will for capitalism is the driver of rising in- produce higher income gaps–or if it does equality in China is also not that persua- so, how much higher–is an empirical sive. First, as noted at the outset of this question, not an outcome determined paper and as explained in the literature simply by the switch from socialism to on post-socialist transitions, centrally capitalism. The second reason to reject planned socialist systems do not system- this explanation comes from the experi- atically promote egalitarian distribution, ence of other post-socialist countries. but instead bureaucratic allocation, and There are many countries that emerged

143 (2) Spring 2014 43 Soaring from the Soviet bloc that have been un - tional power (and generating rising in - Income dergoing post-socialist transitions. Several equality in the process). Gaps are included in Figure 1. While some in - It might be assumed that the experi- crease in income inequality has been ex - ences of East Asian countries are more perienced in most, with the possible (but relevant to China, since they launched very important) exception of Russia, the their industrialization drives as authori- East European post-socialist countries tarian regimes or, in the case of Japan, as have not experienced as sharp of an in - a single-party dominated developmental crease in inequality, nor have they reached state. During their periods of develop- such high Gini levels as China.11 In other mental “takeoff,” their governments did words, while it appears that the switch relatively little to promote redistribution from socialism to capitalism in an econo- to the poor and the working class. But if my leads to some increase in income in - their authoritarian nature meant that equality, this transition cannot explain Japan, Taiwan, and South Korea were rel- why China’s Gini levels have risen so atively immune to peasant- and working- sharply and to such high levels as are vis- class pressures, how did they achieve ible today. “growth with equity?” Much earlier than its role in pioneering If China’s recent rise in income inequality export promotion from the 1950s on - cannot be explained either as the in - ward, Japan under the Meiji reformers af - evitable consequence of development or ter 1868 introduced institutional changes of the transition from central planning to to dismantle feudal social barriers in or- market distribution, what other explana- der to promote general citizenship, em- tions are more credible? The key to an- phasized enhanced human capital forma- swering this question is to recognize cru- tion through universalized modern edu- cial ways in which China is different from cation, and invested heavily in elec - the other societies in these comparisons tri½cation, transportation, public health, and how those differences affect inequality and other measures designed to increas- patterns. In advanced capitalist societies, ingly link the fates of dispersed villagers inequality patterns are often shaped by into the national economy while giving the competition among social classes and them the human capital needed to con- the political parties and lobbying groups tribute to that economy’s growth. How- allied with them, with democratic gov- ever nasty Japanese colonial rulers were ernments pressured either to increase re- in both Korea and in Taiwan during the distribution from the rich to the poor or, ½rst half of the twentieth century, they under some circumstances, to enact poli- promoted similar efforts to improve cies that favor the wealthy. This is not a human capital and health and integrate narrative that can be applied to China, colonial subjects into the economic order which remains a Leninist political system of their colonies, and ultimately of Japan. where the ccp actively works to prevent When Japan became the pioneer in the wealthy and business interests, or for East Asian development in the 1950s, the that matter the poor, from openly orga - structural preconditions just described nizing to press their interests. China since were in place to ensure that the economic 1978 has operated instead as an authori- successes of Japanese manufacturing ½rms tarian developmental state, pursuing pol- spread rapidly to other sectors of the icies designed by ccp elites primarily to economy and the population.12 This his- generate rapid economic growth and na - torical context meant that Japan mini-

44 Dædalus, the Journal ofthe American Academy of Arts & Sciences mized the economic dualism that charac- Paradoxically, given the relatively modest Martin terizes many developing countries, where income inequalities that characterized King Whyte a small and isolated modern economy China’s socialist era, a series of institutions linked to global markets tends to be sur- and policies were put in place that would rounded by a large and relatively unaffect- later obstruct the kinds of linkages and ed agricultural economy. The economic spreading of bene½ts of ½rm success seen successes of pioneering industrial ½rms in the other East Asian countries. generated broad linkages, with business To explain how this occurred, a brief demand spreading to subcontractors, review of earlier debates about the Mao- with laborers moving to meet growing era economy is helpful. Economist Audrey markets for their services, and with wages Donnithorne characterized China in the eventually rising while opportunities to 1960s and 1970s as a “cellular economy.” leave assembly lines to start small busi- She meant that as a reaction to the greater nesses proliferated. dif½culty of implementing central plan- In other words, a development strategy ning in agrarian China than in the Soviet based upon labor-intensive manufactur- Union, in combination with administra- ing primarily for export, when combined tive decentralizations carried out after with a well-integrated national society and 1957 and the disruptions of the Cultural markets and relatively high human capi- Revolution (launched in 1966), provinces, tal, translated into effective economic cities, counties, and even communes were linkages that facilitated the “trickle down” required to emphasize self-reliance, and of higher living standards even in the face most economic exchanges took place of governmental favoritism toward busi- within local administrative boundaries ness interests. When Taiwan and South rather than across them. In other words, Korea successfully followed their versions to a greater extent than in the ussr or in of the Japanese development strategy, the market societies, national economic inte- bene½ts of business success similarly gration became relatively weak, and the spread rapidly through their well-inte- central government had limited resources grated and relatively well-educated pop- or ability to overcome these cellular divi- ulations. sions.14 If China after 1978 basically followed the Donnithorne’s views and evidence same economic development strategy as were strongly challenged by economist Japan, Taiwan, and South Korea earlier,13 Nicholas Lardy. Using evidence on pat- of export-promotion of labor-intensive terns of industrial investment and devel- consumer goods manufacturing, why opment, Lardy was able to show that then did income distribution trends turn China’s central authorities retained a out so differently? Part of the answer is powerful ability to redirect ½nancial that China is a much larger and more di- resources, and that they used this author- verse country in terms of territory, terrain, ity to redirect funding and industrial de - and population than the other East Asian velopment away from existing coastal countries, making it dif½cult to achieve cities, and particularly from Shanghai, to the national integration and backward promote newer industrial cities in China’s linkages visible in these other countries. interior.15 In the views of most observers, However, that is only part of the answer. Lardy was perceived as having “won the Even more important was the legacy of debate” with Donnithorne. China’s system of centrally planned so - However, in retrospect, perhaps that cialism between 1955 and the early 1980s. victory was declared too soon. Lardy’s

143 (2) Spring 2014 45 Soaring claim was not that tendencies toward to self-suf½ciently produce a fairly full Income local autarky were lacking in China’s range of goods–grain, cement, trucks, Gaps administrative and economic system, but even local beers–but with the bureau- that a powerful and committed central cratic administrative structure of the ccp state could and did override those ten- providing the integration that market dencies to redirect resources across ad - exchanges across territorial boundaries ministrative boundaries. And during the failed to promote, and in the process Mao period, this state action more often often redirecting resources from advanced than not promoted redistribution from to more backward cities. Inequality was richer to poorer and less developed locales much more structured by location and –what another economist, John Gurley, place in the administrative hierarchy and called “building on the worst.”16 However, ccp priorities than by social classes, in- this redistribution from advanced to less terest groups, and the other collectivities developed locales was almost entirely that are the drivers of strati½cation in con½ned to the favored urban industrial advanced capitalist societies. sector. There was no comparable effort or mechanism for redistribution by the cen- What changed after China’s market tral authorities from richer to poorer re- reforms were launched in 1978? Two con- gions within the agricultural sector. Nor tradictory tendencies were set in motion. was there redistribution of resources On the one hand, many of the institution- from the urban industrial sector to the alized barriers that had blocked the flow countryside, but rather the reverse. In fact, of people and goods and services began Mao and his colleagues used a combina- to weaken. Villagers were allowed for the tion of household registration (the hukou ½rst time in a generation to leave farming system), migration restrictions, and ra - for local non-agricultural employment or tioning to keep the rural and urban por- to seek work in the cities. Entrepreneurial tions of Chinese society from having much villagers and urbanites alike responded in the way of market exchanges with each to the poverty, shortages, and consumer other for the two decades after 1960, and frustrations of Chinese socialism by grow- to prevent rural residents from migrating ing mushrooms or rabbits to sell else- into urban settlements of any size–pro- where, starting up family restaurants, or ducing “cities with invisible walls.” So hos- even launching companies to manufac- tility to market exchanges and the pro- ture toys or athletic shoes to sell not just motion of self-reliance, when combined to urban consumers, but overseas. Ener- with other institutionalized tendencies getic traders roamed the face of China, (such as heavily favoring urban industry) seeking clothing, housewares, or jewelry weakened the human and economic link- that could be bought cheaply in one locale ages that had existed across locales and and sold for pro½t elsewhere. When mi- between rural and urban China down grating Chinese were successful, invari- through the centuries.17 China under Mao ably they sent a portion of their earnings developed a much higher level of political to their families back home. In other integration than before the revolution, words, the horizontal economic and hu- but in terms of the movement of people, man linkages that socialism had so effec- goods, and services, China in 1978 was a tively obstructed began to revive, and mar- less integrated economy than in 1949.18 kets and geographic mobility began to In other words, China’s socialist era left once again make China a more integrated a legacy of local economies that each tried society and economy.

46 Dædalus, the Journal ofthe American Academy of Arts & Sciences However, there was another dynamic One of the key ingredients of success is Martin that the reforms unleashed, and this sec- the ability to attract cheap migrant labor, King Whyte ond tendency was even more powerful. and most of the workers who assemble As market reforms were launched, the manufactured goods for export, not to ccp’s developmental state threw all of the mention build the new skyscrapers, high- relatively “cellular” geographic subunits ways, and airports and also sell clothing of the Chinese economy into hectic com- to, and clean apartments and perform do - petition to generate growth, employment, mestic services for, urban families are and rising living standards, with very rural-to-urban migrants. There are more substantial career and material rewards than 200 million Chinese migrants cur- awaiting those who excelled in this com- rently, and they often constitute 30 percent petition. Local of½cials competed with one or more of the de facto population of large another to launch ambitious development cities. However, they remain a subordi- plans, gain large shares of state investment nate caste within China today, denied and bank funding, and attract foreign equal treatment compared to those with investors. Localities still wanted to have urban hukou in terms of employment their own successful agriculture, cement opportunities, compensation, access to factories, auto plants, and beer companies, housing, education of their children, and but now they also wanted to attract for- much else–simply because they were born eign investors, build shiny new airports, in a village. They constitute a modern and construct hotels and amusement parks variant of Marx’s “reserve army of the to cater to the tourist trade. Some locali- unemployed,” powering economic growth ties have been much better positioned while keeping labor costs low.20 and successful than others in this compe- What role has the central government tition, leading to sharply diverging eco- played in this heightened competition? nomic fates from place to place. It is in Although there are exceptions, for the China’s boomtowns that personal fortunes most part Deng Xiaoping and his succes- can be made most readily, and where mil- sors have pursued a course opposite to that lionaires who hope to become billion- described by Lardy for the Mao era. The aires relocate. It is also in these locales that policies and resources of the central gov- an almost incestuous collusion among ernment have primarily involved “building of½cials, managers of reformed state- on the best” in order to maximize eco- owned enterprises, private business and nomic growth, not redistributing to locales real estate tycoons, state banks, and other and sectors that are lagging. The special large entities produces sweetheart deals, economic zones (sez) established along heavily subsidized investments, shady land China’s coast starting in 1979 as a means seizures, and even blatant corruption, ra - to attract foreign investment are perhaps ther than the intense competition and risk- the best known example of following taking that classic models of capitalism Deng’s stipulation that “some people . . . presuppose. An important consequence should be allowed to get rich before oth- of this unequal competition at the level of ers.” The maintenance of systematic dis- ordinary citizens is that even today in ur - crimination up to the present against Chi- ban China your income is determined less nese rural citizens and migrants represents by your education, occupation, and work another form of state-sanctioned inegali- experience, and more by your location and tarianism to serve the growth engine. As organizational af½liation, than is the case in the late Mao era, the rural-urban gap in advanced capitalist economies.19 remains China’s sharpest social cleavage,

143 (2) Spring 2014 47 Soaring with the ratio of urban to rural family in - largest and most desirable cities. The Income comes already more than 3 to 1 in 2002 and housing price boom (or bubble?) took Gaps rising to close to 4 to 1 in 2007, a ½gure off, without effective measures in place that may not be equaled in any other na - to tax the capital gains made when selling tion. The rural-urban income gap alone investment housing. As a result of these contributed 45 percent of total national reforms, about 89 percent of urban citi- income inequality in 2002, rising to 51 zens were homeowners by 2007 (but less percent in 2007.21 than 4 percent of urban migrants). Family property in the form of housing is now a As noted at the outset, since 2000, and signi½cant contributor to the incomes of particularly under Hu Jintao’s leadership many urban families, with it becoming of the ccp after 2002, the central govern- possible for the ½rst time since the 1950s ment has launched major initiatives de- to live on property earnings rather than signed to make growth more equitable. wages. But urbanites in work units and That effort has produced some notable cities favorably endowed with housing achievements, including eliminating the were launched into this market with grain tax and rebuilding a rudimentary more assets than others, and housing med ical insurance system for Chinese prices rose more rapidly in some neighbor- farmers.22 However, the problem is that hoods and cities than others. So access to what the central government gives with housing income is highly unequally dis- its left hand, it more than takes away with tributed both within and across Chinese its right. In other words, during the same cities.23 Urban housing reform, driven by time period, state policy has operated in state directives rather than market pres- even more powerful ways that raise, rath- sures in the ½rst instance, has aggravated er than lower, income gaps, even if this income gaps, both among urbanites and outcome may not be intended. between urbanites and villagers (and mi- Two instances of the regressive policies grants), who were left out of the deal en- of China’s developmental state in recent tirely.24 years involve access to basic human re - The second illustrative example involves sources: housing and education. On the access to higher education, a topic fur- housing front, ccp leaders launched a ther developed in William Kirby’s essay drive to privatize urban housing after 1995. for this issue. Starting in 1998, China’s Prior to that time, less than 10 percent of leaders launched an unprecedented ex - residents of large cities owned the hous- pansion of university enrollments, and ing they occupied, with most renting within a decade there were six times as housing through their work organizations many students in college as there had at nominal rents. Reforms obligated been before this drive began (a ½gure that work organizations and cities to heavily rose by 2013 to about ten times as many). subsidize the purchase of apartments by The state also poured large amounts of new their occupants. Once they had obtained funding into an effort to create world- ownership of their flats, urban citizens class comprehensive universities, with a were free to rent them out, sell them, pur- disproportionate share of the funding chase additional housing, or even start real going to only a few dozen elite national estate development companies. The de- universities, all of them located in large mand for such housing, either as improved cities, with a heavy concentration in Bei- residences or as investments, soared in jing and Shanghai.25 These changes have China generally, but particularly in the had several consequences relevant to our

48 Dædalus, the Journal ofthe American Academy of Arts & Sciences theme. The main bene½ciaries of massive ist past than in market forces, or for that Martin university expansion are urban youths, matter in influences from the global King Whyte who are favored in gaining entrance both economy. Speci½cally, a society that in in terms of the quality of their secondary 1978 was characterized by relatively schooling and test preparation and in poorly integrated local economic units terms of how the university entrance with weak horizontal linkages developed exam system works (and favored much even wider local disparities as a conse- more if they live in Beijing than in, say, quence of local competition plus cen- Guiyang or Nanning). Increasingly the tral policies and resources that rewarded modal educational attainment of a young the winners in this competition more person with an urban hukou is university than the losers. graduation, whereas for a rural or mi - • Although the growth of migration, wid- grant youth the modal expectation is only ening of trade networks in goods and graduation from lower middle school services, and other responses to market (that is, junior high school). However, reforms, as well as central programs even for those who succeed in gaining designed to promote more equitable college entrance, quite different life out- development, have had positive effects, comes loom. The higher education fund- their impact has been dwarfed by the ing variation between advantaged and momentum unleashed by ccp policies disadvantaged provinces and their univer- and interventions that work in favor of sities has widened sharply as a result of the localities and sectors of the population state quest for world-class universities. that already enjoy advantages. Graduates of top universities command high salaries, while those who graduate • This analysis suggests that only if China’s from lower-tier colleges often face unem- leadership enacts strong and compre- ployment or have to compete for jobs with hensive reforms (of taxation policy, urban migrants. One might have hoped investment patterns, state bank lending, that China’s dramatic university expan- educational access, the hukou system, and sion would increase the equality of op- much else) to swing the balance back portunity for Chinese youths, but instead might it be possible to bring China’s it has done the opposite, transmitting di - soaring income inequality under con- verging life chances to the next generation. trol. New programs and funding directed at the disadvantaged will not suf½ce. The What are the lessons we can draw from ccp leadership that took over in 2012 China’s experience of soaring income declared its desire to introduce system- inequality? Several conclusions can be atic and equalizing reforms, but given drawn from these trends: the vested interests and momentum built into China’s more than three decades of • Social inequality in China today, as in growth, this will be a tall order. the Mao era, continues to be primarily structured by locational factors, and it is misleading to see it simply as an out- come of market competition or interest group struggles between rich and poor.

• The sharp rise and high level of China’s income inequality are rooted in features embedded more in that society’s social-

143 (2) Spring 2014 49 Soaring endnotes Income Gaps Author’s Note: Research assistance was provided by Dong-Kyun Im. 1 However, income inequalities in China today are not the result of the rich getting rich and the poor getting poorer. China’s booming economy for more than three decades has brought improved living standards to the overwhelming majority of Chinese, and the proportion liv- ing below the internationally recognized poverty line ($1.25 per day, per person in constant dollars) has fallen from something like 60 percent at the end of the Mao era to under 10 percent today. But the incomes of China’s poor have not increased as rapidly as the incomes of the rich. 2 On the Wen Jiabao family fortune, see David Barboza, “Billions in Hidden Riches for Family of Chinese Leader,” The New York Times, October 25, 2012. On the Xi Jinping family ½nancial empire, see “Xi Jinping Millionaire Relations Reveal Hidden Fortunes of Elite,” Bloomberg News, June 29, 2012. On the connections and wealth of the children and grandchildren of the ccp’s founding “eight immortal” leaders, see “Heirs of Mao’s Comrades Rise as New Cap- italist Nobility,” Bloomberg News, December 26, 2012. 3 Chris Buckley, “China Issues Proposal to Narrow Income Gap,” The New York Times, February 5, 2013. 4 The highest quality income surveys for China were conducted in 1988, 1995, 2002, and 2007 by an international collaborative team, the China Household Income Project Surveys (chips). The renewed increases in income inequality that those surveys documented are discussed in detail in Li Shi, Hiroshi Sato, and Terry Sicular, eds., Rising Inequality in China: Challenges to a Harmonious Society (New York: Cambridge University Press, 2013). 5 In the same time period in other populous Asian societies, such as India, Pakistan, Bangladesh, and Indonesia (as well as post-socialist Vietnam), Gini estimates (reported in the same data sources) generally have been in the 0.30 to 0.39 range, and without the sharp rise visible for China. 6 See http://www.china.com.cn/zhibo/2013-01/18/content_27692231.htm?show=t. Speci½cally, the Gini ½gures given by Ma were as follows: 2003, 0.479; 2004, 0.473; 2005, 0.485; 2006, 0.487; 2007, 0.484; 2008, 0.491; 2009, 0.490; 2010, 0.481; 2011, 0.477; 2012, 0.474. He attributed the modest improvement in income distribution largely to rural incomes rising more rapidly than urban incomes in the period since 2007. 7 See Ernest Kao, “China Wealth Gap Continues to Widen,” South China Morning Post, December 10, 2012. 8 Roberto Korzeniewicz and Timothy Moran, “Theorizing the Relationship between Inequality and Economic Growth,” Theory and Society 34 (3) (June 2005): 277–316. The study by Simon Kuznets that they debunk is “Economic Growth and Income Inequality,” American Economic Review 45 (1) (March 1955): 1–28. Obviously, more recent trends in highly industrialized countries depart from the Kuznets scenario as well. The return to rising levels of income inequality in advanced countries since the 1970s has produced trends over time that might better be described as a “supine S.” 9 United Nations, Growth with Equity: Policy Lessons from Selected Asian Countries (New York: United Nations, 1999); Wang Feng, “The End of ‘Growth with Equity’? Economic Growth and Income Inequality in East Asia,” AsiaPaci½c Issues no. 101 (July 2011): 1–8; and Eunju Chi and Hyeok Yong Kwon, “Unequal New Democracies in East Asia: Rising Inequality and Govern- ment Responses in South Korea and Taiwan,” Asian Survey 52 (5) (October 2012): 900–923. 10 See the discussion in Ivan Szelenyi, Urban Inequalities under State Socialism (New York: Oxford University Press, 1983); and Martin King Whyte, Myth of the Social Volcano: Perceptions of Inequality and Distributive Injustice in Contemporary China (Stanford, Calif.: Stanford University Press, 2010). 11 Branko Milanovic and Lire Ersado, “Reform and Inequality during the Transition: An Analysis Using Panel Household Survey Data, 1990–2005,” United Nations University-World Insti- tute for Development Economics Research Working Paper No. 2010/62 (May 2010).

50 Dædalus, the Journal ofthe American Academy of Arts & Sciences 12 Nationwide land reform programs in the late 1940s and 1950s also made an important con- Martin tribution to growth with equity in these countries. King Whyte 13 One difference is that Chinese socialism had eliminated private businesses familiar with operating in overseas markets, so that after 1978 China had to rely much more on foreign direct investment and Hong Kong commercial expertise in order to develop its export man- ufacturing sector. 14 Audrey Donnithorne, “China’s Cellular Economy: Some Economic Trends since the Cultural Revolution,” The China Quarterly 52 (October 1972): 605–619. 15 Nicholas Lardy, Economic Growth and Distribution in China (New York: Cambridge University Press, 1978). 16 John G. Gurley, “Capitalist and Maoist Economic Development,” Bulletin of Concerned Asian Scholars 2 (3) (April–July 1970): 34–50. 17 See Kam Wing Chan, Cities with Invisible Walls (New York: Oxford University Press, 1994); Fei-ling Wang, Organizing through Division and Exclusion: China’s “Hukou” System (Stanford, Calif.: Stanford University Press, 2005); and Martin King Whyte, ed., One Country, Two Societies: Rural-Urban Inequality in Contemporary China (Cambridge, Mass.: Harvard University Press, 2010). 18 To give one simple example, in the late–Mao era, unlike in other societies (including the ussr), farmers were forbidden to bring produce or handicrafts into cities to sell to urban consumers. 19 See the discussion in Wang Feng, Boundaries and Categories: Rising Inequality in Post-Socialist Urban China (Stanford, Calif.: Stanford University Press, 2008). 20 In the last decade or so, migrant wages have begun to increase, after remaining relatively stagnant during the 1980s and 1990s. However, migrants still are disadvantaged compared to comparable laborers with urban hukou not only in wages, but also in access to most other bene½ts and services. 21 Li, Sato, and Sicular, Rising Inequality in China, 32. 22 There is a comprehensive discussion of multiple “harmonious society” programs in ibid., chap. 1. According to national surveys the author directed in China, the rural coverage rate by public medical insurance increased from only 15.4 percent in 2004 to 89.6 percent in 2009. 23 See the discussion of the increasing role of wealth, particularly in the form of housing assets, between 2002 and 2007, as well as the homeowner statistics, in ibid., chap. 3. One observer contends that the result of China’s urban housing privatization and subsequent price increases is arguably the largest accumulation of real estate wealth in history, worth over US $17 trillion in 2010; see Leta Hong Fincher, “Women’s Rights at Risk,” Dissent 60 (2) (Spring 2010): 37. In contrast to China, in 2007 only about 65 percent of American urbanites were homeowners. 24 Villagers generally live in privately owned ancestral housing, and when they build new housing they pay for it themselves, with no subsidized mortgages. Migrants usually live in factory dormitories or have to rent, often from suburban villagers. 25 China’s “211 Project,” initiated in 1995, aimed to identify one hundred universities with the potential of becoming “world class” and initially invested 11 billion yuan in their develop- ment; the “985 Project,” launched in 1998, focused on a smaller set of elite universities (eventually thirty-nine) and invested more than 12 billion yuan in them in the ½rst two years; and the “111 Project,” launched in 2006, aimed to bring large numbers of foreign sci- entists to China to enhance the research capabilities of the same elite universities favored by the 985 Project. For the regressive impact across provinces of these reforms on university funding and enrollments, see Hannah Waight, “Ordered Inequality: The Role of Reform in Structuring Disparities in Chinese Higher Education,” Sociology 237 seminar paper, Harvard University, December 2012. For the role of university enrollment expansion in widening the

143 (2) Spring 2014 51 Soaring rural-urban disparity in college access, see Maocan Guo, “School Expansion and Education Income Strati½cation in China, 1981–2006,” Sociology Doctoral Program qualifying paper, Harvard Gaps University, 2009.

52 Dædalus, the Journal ofthe American Academy of Arts & Sciences Correcting Past Health Policy Mistakes

William C. Hsiao

Abstract: China’s health policy in the 1980s followed its economic policy of marketization. China shifted health ½nancing from public to private and commercialized the country’s public health services. Unwit- tingly, the Chinese government did not grasp the serious market failures in health care, which resulted in a pro½t-driven public health service in which patients pay directly for services. China’s health policy created three major unintended consequences: disparity between rural and urban residents, poor quality of health care, and rapid inflation in health expenditures. Since 2003, China has tried to correct its policy mistakes through public ½nancing and by establishing social health insurance. However, strong pro½t motives have become embedded within the culture of medical professionals and have eroded the professional ethics that prioritize medical practices for patients’ bene½ts. Restoring medical ethics is a formidable challenge. This paper analyzes the transformation of the Chinese health system and its ongoing challenges.

Alongside the shiny marble-walled shopping cen - ters, lined with Gucci, Louis Vuitton, and Prada stores, and nestled among soaring glass skyscrapers, glittering modern hospitals now dot all major Chi- nese cities. These state-of-the-art facilities, full of expensive high-technology chromatic machines and white-coated staff, stand in stark contrast to the mud-brick, single-room health stations found in the Chinese countryside. Although more and more of China’s 1.3 billion people are moving to metrop- WILLIAM C. HSIAO is the K. T. Li olises, the majority of its rural population, which Professor of Economics at the Har - still numbers some seven hundred million, remains vard School of Public Health. He in desperate need of well-trained village doctors currently serves as an advisor to the Chinese State Council on health and basic essential drugs. The disparity in access to sector reform. Hsiao has published quality health care between rural and urban areas more than 180 papers on health has in essence created a two-tiered system. Although systems and health care ½nancing. the top level is similar to health care available in His books include Getting Health ½rst-world nations, the lower tier of the Chinese Reform Right (with Marc Roberts, health care system is more typical of that found in Peter Berman, and Michael Reich, the third world. 2003), Social Insurance for Developing Nations (with R. Paul Shaw, 2007), After a century of being derided as the “sick man and What Macroeconomists Should of Asia,” China has now become the second largest Know about Health Care Policy (with economy in the world. As explained in Barry Peter S. Heller, 2007). Naughton’s essay in this volume, the economic

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00272 53 Correcting reforms that began in 1978 have trans- has been the transformation of its health Past Health formed the economic and social land- care system. The country’s previous so - Policy 1 gdp Mistakes scape. As a result, per capita average cialistic health care system largely im- rose from $300 to $5,450, and six hundred ploded, in part because China adopted a million Chinese were lifted out of extreme market strategy, relying on private sources poverty.2 Compared to the historical eco- to ½nance health care and commercialize nomic development of England, China col - the provision of health services. Ironically, lapsed about two hundred years of devel- bastions of free-market capitalism such as opment into a thirty-year period.3 the United States and Singapore long ago Until a decade ago, China’s leaders fa- learned that the marketization of health vored the cities in terms of policy and care–with its severe market failures– investment, leaving the rural areas to lan- would create havoc and yield profound guish. Meanwhile, the Chinese hukou sys- inequities in health. Nonetheless, in 1980, tem (household registration) has restricted China adopted a market approach to the migration of people from one area to health care, following the general policy another, particularly rural residents want - of the economic sector. ing to move to urban areas on a permanent The reliance on private sources to ½- basis. The economic boom did transform nance health care and commercialize some rural areas to cities, converting about health care delivery has left behind three four hundred million rural residents to deep and enduring wounds for current and urban; but that number includes three future Chinese leaders to address. First, hundred million so-called migrant work- private ½nancing resulted in disparities ers who work in big industrial centers in in access to quality health care, leading to Shanghai, Shenzhen, and Guangzhou.4 health status differences between urban And when rural residents become migrant and rural residents. China has worked to workers in cities, they are often prohibited address this issue during the past decade from bringing their families, and they have by increasing public ½nancing for the poor, no rights to urban social services such as establishing universal health insurance, education, housing, health insurance, and and investing in health facilities in poor social welfare support. The result of these areas. However, China has not been able changes has been huge and growing dis- to close the gap to any signi½cant degree. parities in the well-being of urban and More important, effective health care rural residents, including migrant workers. relies on well-trained, quali½ed practi- The average disposable income per person tioners, and China has not been able to for urban residents is 3.5 times that of rural close the gap in human resources be - residents,5 and the Gini coef½cient, which tween cities and the countryside, nor be - measures the inequality of income distri- tween poor and rich provinces. bution, has doubled from 0.21 in the 1980s Second, the free market strategy en- to 0.47 in 2012.6 As Martin Whyte dis- couraged hospitals and physicians to pur- cusses in his essay in this issue, China now sue pro½ts with distorted prices. Pro½t- seems to consist of two separate societies: driven medicine has become the norm, urban and rural.7 And the disparity be - resulting in poor quality of health care, tween the two has caused increasing social incorrect diagnoses, inappropriate treat- strife.8 ments, and perhaps even the delivery of Beyond economic growth, one of the harmful health care. As a result, patients most startling aspects of China’s rapid have lost respect for and trust in physicians development over the past thirty years and other health professionals; there

54 Dædalus, the Journal ofthe American Academy of Arts & Sciences have even been cases of patients and their production and provided social services, William C. families resorting to violence, physically including health care, which was provided Hsiao assaulting physicians when they did not through the Cooperative Medical System recover from their illnesses.9 (cms). The cms operated health posts in Lastly, pro½t-driven medicine has cre- villages and township health centers that ated deeply embedded waste and corrup- were staffed mostly by so-called barefoot tion in Chinese medical practices, leading doctors. to high inflation in health expenditures. From 1952 to 1982, the Chinese health While China’s economy grew at a phe- care system made enormous improve- nomenal rate, health expenditures grew ments in health and health care by empha- even faster, due in part to the pro½t-seeking sizing prevention and primary care pro- behavior of hospitals and physicians. This vided by modestly trained practitioners. rapid increase raises the critical question Infant mortality fell from 200 to 34 per of whether China’s current health care 1,000 live births, and life expectancy in - system is sustainable when a rapidly grow- creased from about 35 to 68 years. The Chi - ing share of government and household nese public health apparatus also achieved budgets is being diverted to health with- major gains in controlling infectious dis- out commensurate bene½ts to patients. ease through immunization, improved The Chinese government has conducted sanitation, and the control of disease vec- in-depth investigations (including by en - tors, such as mosquitoes for malaria and gaging international organizations and snails for schistosomiasis.10 scholars), gathered extensive evidence, and When China embarked on its economic analyzed the major health problems out- reform in 1978, it overhauled four major lined above. Top of½cials, as well as the health policies: it shifted public ½nancing general public, have a comprehensive to private sources; it turned public hospi- and accurate understanding of the issues, tals and clinics into commercial enterpris- and the causes have been largely identi½ed. es; it decentralized its health system; and it However, some of these causes are rooted altered the price structure for public facili- in the unethical behavior of health pro- ties, thereby enabling them to earn pro½ts. fessionals, as well as in government As China’s centrally planned socialist structure, both of which are dif½cult to economy was transformed to a market correct. econ omy centered on private enterprise, the Chinese government experienced a After the Chinese Communist Party drastic reduction in revenue and had to (ccp) took control of China in 1949, it completely rebuild its ½scal system. Con- created a health care system typical of sequently, the government lacked the Communist countries. The government revenue to fund social programs such as owned, funded, and ran all hospitals: from health care. Like other transition econ - large specialized hospitals in urban areas omies, the Chinese government’s revenue to small township hospitals in the coun- as a percentage of gdp fell from 30 per- tryside. The private practice of medicine cent to 10 percent, and subsidies for pub- and the private ownership of health facil- lic health facilities fell from 50 to 60 per- ities disappeared; physicians became cent to a mere 10 percent of the facilities’ employees of the state. In rural areas, the total revenues by the early 1990s.11 The cornerstone of the health care system government therefore decided to replace was the commune, the critical institution public ½nancing with private sources: pub- in rural life. Communes oversaw economic lic health facilities would charge patients

143 (2) Spring 2014 55 Correcting directly for services and patients would local public health agencies the authority Past Health pay out of pocket. On the one hand, the to charge for certain services, such as Policy Mistakes existing health insurance program for inspections of hotels and restaurants for employed workers was reformed and sanitary conditions and industrial enter- maintained, largely protecting health prises for environmental compliance. care for urban workers in the formal Health agencies could also establish fee- economy. On the other hand, in its efforts for-service health centers and hospitals to privatize the agricultural economy, the for delivering curative services. Predict - government completely dismantled the ably, local public health authorities con- communes, thereby destroying the health centrated on these revenue-generating care safety net for most rural Chinese. activities, neglecting preventive programs Without the cms, Chinese peasants had such as health education, maternal and no way to pool risks for health care ex- child health, and epidemic control. penses, and nine hundred million rural, The last major change was the intro- mostly poor citizens became, in effect, un- duction of a new pricing policy for health insured overnight. Consequently, the once- services, stemming from the Chinese gov- vaunted barefoot doctors were forced to ernment’s desire for prices to be afford- become private health practitioners. able to patients, yet suf½ciently high for The second policy change was for public public facilities to survive and flourish. health clinics and hospitals to rely on But the newly established pricing policy payments from patients as their main was at its core irrational and reflected a source of income. Virtually unregulated, lack of adequate understanding of eco- this policy basically turned public facilities nomic theory and international best prac- into free commercial enterprises. As public tices. That unsound pricing policy set in funding declined, public facilities relied motion signi½cant changes in the organi- more and more on the sale of services in zational culture, motivation, and behavior private markets to cover their expenses. of hospital leaders and practitioners. The De facto public hospitals and clinics came government set prices below costs for to function much like for-pro½t commer- personal services such as a physician visit cial entities, focusing primarily on their or hospital daily bed charges, but set bottom lines, with Chinese policy infor- prices above costs for new and high-tech mally sanctioning their actions.12 Clinics diagnostic services. It also allowed a 15 per - and hospitals quickly found that selling cent pro½t margin on drugs. This system drugs and conducting tests were the most created perverse incentives for providers, lucrative ways to stay afloat, pay bonuses who had to cover 90 percent of their to staff, and generate funds for expan- budgets with revenue-generating activi- sion. Thus, the number of drug sales and ties.13 Over time, public hospitals, clinics, test orders exploded. and village doctors gradually became The third policy change decentralized pro½t-seeking entities, while the healing the public health system in order to re- of ill patients took a back seat. Equally duce central governmental expenditures. important, the government’s pricing pol- While rich provinces had adequate ½nan- icy created a leveraging effect whereby a cial resources to cover the costs of the provider had to dispense $7 in drugs to public health services, the poor provinces earn $1 in pro½t. Subsequently, providers did not, resulting in signi½cant dispari- overprescribed drugs and tests, and hos- ties between provinces and counties. Fur- pitals raced to introduce high-tech ser - thermore, the central government granted vices and expensive imported drugs that

56 Dædalus, the Journal ofthe American Academy of Arts & Sciences returned higher pro½t margins. These sector: hospitals and physicians receive William C. med ical practices not only caused rapid kickbacks from drug companies for pre- Hsiao health expenditure inflation, but also scribing their products, and doctors’ harmed patients with unnecessary sur- bonuses are often tied to these kickbacks. geries and hospitalizations, adverse reac- In rural areas, village doctors buy expired tions from the overuse of drugs, drug tox- and counterfeit drugs at low cost and sell icity from the use of multiple drugs, and them as valid products at higher prices. false-positives from poorly executed tests. Some investigators estimate that until two The unfortunate consequences of this years ago, one-third of drugs dispensed combination of policy changes are best in rural areas were actually counterfeit, understood from three perspectives: dis- earning huge pro½ts for their vendors. parities between rural and urban areas, China’s rapidly rising health expenditure de½cient quality of health care, and bur- inflation rate is one broad consequence geoning health expenditure inflation. of the country’s health policies. Chinese Urban/rural disparities in ½nancial and health expenditures have burgeoned over physical access to medical care, and pub- the past thirty years, albeit from a low lic health expenditures are reflected in base. From 1978 to 2011, personal health the available health statistics. spending per capita in China increased by In China’s privatized, market-based a multiple of 164, from 11 rmb to 1,801 health care system, the wealth of con- rmb (roughly $6 to $280). At the same sumers is a critical determinant of both time, the Consumer Price Index increased their access to services and the quality of nearly sixfold. National health care spend- services they receive. With urban in - ing rose from 3 percent to 5.15 percent of comes triple those in rural areas, urban gdp. A huge portion of this expenditure residents have fared far better than rural was for unnecessary drugs and high-tech residents in terms of health services. In tests; half of Chinese health care spend- 1999, infant mortality was 38 per 1,000 ing is devoted to drugs, compared to only live births in rural areas, compared to 12 10 percent in the United States.16 per 1,000 in urban areas. In 2002, mortality among children under age 5 was 39.6 per By the mid-1990s, the Chinese central 1,000 in rural areas, but only 14.6 per government was well aware of the wide- 1,000 in urban locales. Maternal mortality spread problems created by its health ½gures in 2002 were 58.2 and 22.3 per policies, although top of½cials were 100,000, respectively.14 reluctant to address them. In some rural One indicator of the reduced quality of districts, de½ciencies in health care be - health care in China is the inappropriate came a cause of growing anger toward use of prescription drugs, a problem the Chinese government and contributed closely linked with medical practitioners to local riots and disturbances.17 In a and hospitals having become pro½t-driven country where threats to established po - entities. In China, 75 percent of patients litical authority have historically sprung suffering from a common cold are pre- from the grievances of an impoverished scribed antibiotics–more than twice the peasantry, the consequences of rural/ international average of 30 percent.15 urban health care differentials carry pro- Unfortunately, no authority has been held found political signi½cance for the Chi- accountable for these practices. Com- nese leadership. pounding the problem is collusion be - China ½nally took action in 2003, when tween providers and the pharmaceutical its rapidly growing economy yielded large

143 (2) Spring 2014 57 Correcting tax revenues that gave the capacity for investing and upgrading primary care Past Health the central and some local governments facilities and human resources, and pilot- Policy Mistakes to make substantial health care invest- ing public hospital reforms. ments. The central government created As of the end of 2012, the Chinese gov- the New Cooperative Medical Scheme ernment had invested an impressive ad- (ncms), a health insurance program for ditional $125 billion in public health. Cov- rural citizens. All provinces were com- erage is now remarkably broad, albeit still pelled to establish ncms by pooling risk far from egalitarian. China currently has at the county level. The provinces and more than 95 percent of its population counties must co½nance the majority of covered under its three social insurance ncms, though the central government programs. Although employed workers does provide ½scal transfers to poor and currently have a much richer bene½ts middle-income provinces to fund a sig- package, the goal is to equalize bene½ts ni½cant portion of the costs. ncms began within a decade.19 Preventive and primary in 2003 with a total public subsidy of 20 care are better funded, supplied, and rmb for each resident’s health insurance used, and many new public facilities have premium; the subsidy has since grown to been built or renovated. Public health facil- 300 rmb per resident. In 2007, the gov- ities are equipped with reasonable medical ernment created a similar insurance pro- equipment, and essential drugs are avail- gram for the 250 million urban residents able almost everywhere at a reasonable who were not insured under the Employee price. Insurance Plan.18 These new insurance Despite these signi½cant advances, three programs lowered ½nancial barriers to major problems remain unsolved. The ½rst medical care, and rural residents have is the need for reform of public hospitals, since increased their use of health services. particularly high-level urban hospitals that But it was not until 2008 that the Chi- absorb the majority of ½nancial and hu- nese government publicly acknowledged man resources. These are the cradle of and began to address the other huge overtesting and overprescribing drugs, of health care problems it had created. In waste, and of corruptive practices, such designing its reform, China carefully as demanding red envelopes (bribes) from examined solutions pioneered in other patients and receiving kickbacks from countries and organized a wide consulta- pharmaceutical and medical device com- tion with domestic and international panies. The shortage of quali½ed human experts, as well as with the public. A sys- resources to serve the rural population and temic reform was launched in 2009 with the resultant poor quality of health care the goal of providing affordable and equi- in these regions constitute the remaining table basic health care for all citizens by unsolved challenges. 2020. With this ambitious program, the Chinese government is af½rming its role as China’s recent health policy changes the primary ½nancing source for health are intended to address the deep wounds care, while also giving priority to preven- that resulted from the country’s earlier tive and primary care. The reforms were interrelated policies of privatization and anchored by ½ve related measures: pro- commercialization of health care, as well viding insurance coverage for more than as its irrational pricing policy. As noted, 90 percent of the population, establishing a these earlier policies contributed to stark national essential drug system, establish- urban/rural health disparities, poor qual- ing and funding effective prevention, ity of health care, and health expenditure

58 Dædalus, the Journal ofthe American Academy of Arts & Sciences inflation. One of the most critical issues gate data on health differences between William C. surrounding Chinese health policy is its urban and rural residents. Hsiao differential effect on the health status of The previous section discussed how the various social and economic groups. China decentralization of China’s ½scal system collects voluminous data, but much of it occurred in conjunction with its eco- is not accessible for public use. Essentially, nomic liberalization, resulting in provin- China only publishes national data relat- cial and county governments being made ed to distributional impact between urban responsible for funding health care. and rural residents, as well as some infor- However, most of the poor provinces in mation about variation among provinces. China’s rural western region did not have Data by income, education, and ethnicity the ½nancial resources to fund even basic are scarce. There are individual studies health care for their residents. Meanwhile, conducted by researchers for a given the people–mostly farmers–lacked the community or a city, but they are not rep- income to pay for health care services resentative of the nation as a whole. themselves. China does not publish reli- The most common measures of health able data on health spending over time by are infant mortality rate (imr), maternal province. It does, however, publish data mortality rate (mmr), and life expectancy. on total public and private per capita Table 1 shows that imr for rural residents spending on health for urban and rural is 260 percent that of urban residents; residents. This crude information does mmr for rural residents is 38 percent not adjust for differences in age/sex and greater than that of urban residents; varying disease patterns. Nevertheless, while urban life expectancy is 7 percent this is the only reliable and up-to-date greater than that of rural residents. Chil- national information we have to shed dren born into rural households suffer a some light on the urban-rural disparity. much higher death rate than urban chil- Figure 1 shows the difference in per capi- dren, indicating the lack of basic health ta spending on health for urban and rural care in rural areas. The lower mmr in residents from 1990 to 2011. The latest urban areas seems to indicate that urban data available show that in 2011, spending China has a higher quality child delivery on health care for the average urban resi- system. The smaller difference in life ex- dent was more than three times the aver- pectancy may reflect the less contaminated age amount spent on care for rural resi- food supply and lower air pollution in rural dents. Despite the 2008 ncms initiative, areas, and the possibility that rural people the difference in health expenditure has lead a healthier lifestyle with more exer- hardly narrowed. cise than city dwellers. More substantial health insurance cov- Differences in health outcomes are erage for workers employed in the formal caused by many factors: varied ½nancial sector is a major reason why spending is and human resources invested in preven- so different between urban and rural res- tive and health services; different in- idents. Table 2 shows the estimated aver- come, education, environmental living age premium paid per covered person in conditions; varied occupational hazards 2011. The premium was estimated at 1,960 and lifestyles; and different ethnic back- rmb under employee insurance, which grounds and social classes. While we can- covers civil servants and formal sector not ½nd reliable national data on differ- workers. More than 90 percent of these ences in health status by socioeconomic workers are urban residents. Meanwhile, group, China does publish reliable aggre- the health insurance plan for rural resi-

143 (2) Spring 2014 59 Correcting Table 1 Past Health Comparison of Health Status between Rural and Urban Residents, 2006–2010 Policy Mistakes

National Urban Rural Ratio (urban to rural)

imr (per 1,000 live births) 14.86 6.84 17.96 1:2.62 mmr (per 10,000 births) 34.76 27.1 37.4 1:1.38 Life Expectancy 74.83 77.33 72.29 1.07:1

Source: imr and mmr are calculated by averaging the ½ve-year period; data are from National Bureau of Sta- tistics of People’s Republic of China, China Statistical Yearbook 2012 (Beijing: China Statistics Press, 2012). The national life expectancy is from the 2010 Census, and the rural and urban life expectancy are extrapolated using the existing data before the 2010 Census. See Ying Hu, “The Average Life Expectancy Analysis on China’s Current Population in Urban and Rural,” Population & Development 16 (2) (2010): 41–47.

Figure 1 Health Care Expenditure Per Capita, 1990–2011

Source: National Bureau of Statistics of People’s Republic of China, China Statistical Yearbook 2012 (Beijing: China Statistics Press, 2012).

60 Dædalus, the Journal ofthe American Academy of Arts & Sciences Table 2 William C. Estimated Premium Per Capita in 2011 Hsiao

New Cooperative Employee Medical Insurance, Medical Schemes (ncms) including civil servants

Average Premium (rmb) 246 1,960

Source: National Bureau of Statistics of People’s Republic of China, China Statistical Yearbook 2012 (Beijing: China Statistics Press, 2012); average premium estimated by author.

dents, the ncms, had an estimated aver- ating from junior high school followed by age premium of 246 rmb per person, an additional three years of education in only one-eighth of the average premium a health school. At best, they have the for the employed workers. This vast dif- knowledge, training, and competency of ference reflects several factors, including a nurse’s assistant in a modern hospital. the more generous bene½ts of employee The older village doctors do not even have insurance (most migrant workers are not this level of formal training; they learned eligible), the higher cost of health care in on the job. cities, and the higher average age of people Providing the next level of care are the covered under the employee insurance as physicians, mostly three-year medical compared to the ncms. And when more school graduates, who staff the township generous bene½ts are available to em - health centers that serve between ten ployees, they demand more services and thousand and twenty-½ve thousand resi- more expensive facilities, drugs, and tests. dents. The physicians who would be con- Along with unequal ½nancial inputs for sidered reasonably quali½ed by Western urban and rural residents, human re - standards, with training comparable to source inputs also differ. Most compar- ½ve or more years of college-level medical isons using aggregate numbers of practi- education, practice mostly in cities. China tioners and hospital beds for each urban certi½es its hospitals into levels 1, 2, 2A, 3, and rural resident lead to erroneous con- and 3A. The beds in township health cen- clusions. The aggregate numbers show ters are classi½ed as level 1, which means that urban and rural areas have similar that they are mostly for observation or numbers of beds and practitioners per convalescence. Rural county hospitals resident. However, the competency of the serving populations of approximately practitioners varies wildly, as does the three hundred thousand are designated as quality of the hospitals, both in terms of level 2. They typically offer ½ve or more their medical capabilities and sophistica- basic medical specialty services such as tion. In rural areas, basic preventive and internal medicine, general surgery, ob - routine health care is provided by village stetrics, pediatrics, and ear/nose/throat. doctors, who become quali½ed by gradu- County hospitals offer very few subspe-

143 (2) Spring 2014 61 Correcting cialties. In contrast, urban residents are were medically unnecessary, and many of Past Health mostly served by level 3 and 3A hospitals, these prescriptions were implicated in Policy Mistakes which offer every known subspecialty more than one million children becoming and the highest level of care. deaf or suffering neurological disorders.20 The clearest way to illustrate the differ- Such patterns also contribute to the global ence in the capability and competency of problem of antimicrobial resistance. health services in urban and rural regions In a large study of urban health centers is to compare the number of registered and stations, the authors randomly ex - physicians (three or more years of medical amined 203,080 outpatients’ records ret- school education) serving rural and urban rospectively from the years 2007 to 2009.21 residents. Figure 2 shows that urban areas, They found that prescriptions of antibi- on average, have 2.2 times the number of otics, simultaneous use of two or more registered physicians per one thousand antibiotics, administration of iv injections, residents as rural areas. This gap has and prescription of steroid hormones far widened over the past two decades. exceeded the World Health Organization’s It is perhaps understandable that highly (who) reference standards during this educated physicians would not want to period. Prescriptions of multiple antibi- work in rural areas, due to less desirable otics and use of iv injections were at least socioeconomic conditions and reduced twice the who standards. Overuse of educational opportunities for their chil- steroid hormones can harm patients, and dren. Many nations try to rely on trained patients can suffer from side effects of nurses to substitute for physicians in antibiotics as well as toxicity resulting rural areas, but nurses are also unequally from the use of multiple drugs. Overuse of distributed in China. Figure 3 compares the drugs can also cause patients long-term number of nurses per one thousand resi- harm in the form of drug resistance. These dents in urban and rural areas. In 2011, the ½ndings are summarized in Table 3. most recent year of data, there were 3.4 How does the quality of health care in times the number of nurses per one thou- rural communities compare to that found sand residents in urban than in rural areas, in cities? One study in the rural counties also a gap that has widened over the past of Ningxia, a low-income province, found two decades. As a result, prevention and that 60 to 70 percent of drug prescrip- health services in rural China have dete- tions for the common cold and upper res- riorated, triggering the central govern- piratory infections were inappropriate.22 ment’s effort to mount a comprehensive Another study in the rural areas of Shan- reform ten years ago. dong province found similar results.23 The quality of health care itself is closely These studies suggest that rural areas suffer related to health care accessibility and from more widespread inappropriate drug expenditure, and is a critical outcome of prescriptions than urban areas. the policy reforms. Numerous studies Another harmful effect of government prior to the 2008 reform documented the policies on health care is illustrated by the overprescription of drugs and overuse of discretional surgery rate. Child delivery intravenous (iv) therapy, both effects of by Caesarean section (cs) is a pro½table the introduction of distorted prices and procedure in many countries, and thus the commercialization of public hospitals can be used as a measure of overuse and and clinics in the mid-1980s. For example, quality of health care. China experienced a one study estimated that approximately rapid increase in cs when insurance was half of all antibiotic prescriptions in China expanded to cover this procedure at a price

62 Dædalus, the Journal ofthe American Academy of Arts & Sciences Figure 2 William C. Number of Registered Physicians per 1,000 Chinese Citizens, 1990–2011 Hsiao

Source: Ministry of Health of People’s Republic of China, China’s Health Statistics Yearbook 2012 (Beijing: Peking Union Medical College Press, 2012).

Figure 3 Number of Nurses per 1,000 Chinese Citizens, 1990–2011

Source: Ministry of Health of People’s Republic of China, China’s Health Statistics Yearbook 2012 (Beijing: Peking Union Medical College Press, 2012).

143 (2) Spring 2014 63 Correcting Table 3 Past Health Comparing Chinese Practice with who Standards Policy Mistakes

Indicators China’s Health Centers who Standard

Drugs prescribed per encounter 2.55–2.6 1.6–1.8 Percent of encounters with an 40.1–45.1 20.0–26.8 antibiotic prescribed Percent of encounters with an 32.4–35.4 13.4–24.1 iv injection prescribed

Source: Yongbin Li, Jing Xu, Fang Wang, Bin Wang, et al., “Overprescribing in China, Driven by Financial Incen- tives, Results in Very High Use of Antibiotics, Injections, and Corticosteroids,” Health Affairs 31 (5) (2012): 1075–1082.

above the surgery’s actual cost. Studies percent by 1.35 percent annually. The rate found that China has a national average of increase has accelerated since 2007. of 46 percent of births by cs, while the During the period of 1990 to 2007, health who standard is only 10 to 15 percent. In expenditure was growing faster annually some areas of China, this ½gure exceeded than gdp by 0.6 percent, but this gap 80 percent, and a few even reached 90 jumped to 4.6 percent for the years be- percent.24 tween 2007 and 2011. This means that an The 2008 Chinese health system reform ever-larger share of government and does not seem to have improved the qual- household expenditures has been going ity of health care because it did not alter to health costs. the fee-for-service payment system, nor the These rising inflation rates are chiefly distorted pricing. A large study of eighty- caused by the previously discussed incen- three counties and cities nationwide found tives given to commercialized public hos- only variable and small changes in the use pitals and clinics: fee-for-service payments of antibiotics, iv injections, and steroid and distorted prices. Facilities can increase hormones between 2007 and 2010.25 their revenues and pro½ts by inducing de- More broadly, a health care system is mand for services, in part by advising pa- not sustainable if increasingly larger shares tients that they need unnecessary or exces- of government and household budgets sive hospitalizations, surgeries, tests, and are being diverted to health care without drugs. As pro½t motives took hold and commensurate bene½ts to patients. The gradually overwhelmed professional med- annual health expenditure per person has ical ethics, physicians and hospitals started been increasing at average rates of 10.85 exploiting patients as cash cows. Kickbacks percent (after adjusting for inflation) from from pharmaceutical and medical device 1990 through 2011: a ½gure that has out- companies created perverse incentives, paced the gdp average growth rate of 9.5 further compounding the problem. When

64 Dædalus, the Journal ofthe American Academy of Arts & Sciences China achieved nearly universal health making. Unless China can reestablish the William C. insurance coverage in 2008, hospitals and ethical practice of medicine that charac- Hsiao practitioners faced a moral dilemma of terized a previous generation of medical whether to prescribe unnecessary but practitioners, the quality of health care pro½table drugs, tests, and services, given will remain seriously de½cient and health that insurance would pay a signi½cant expenditure inflation will not be curbed. share of the bill. Based on the available But how can China reestablish ethical be- evidence, we can conclude that China havior for millions of medical practition- currently has an inef½cient health care sys- ers, and how long would that take? tem, characterized by tremendous waste Today, most senior physicians in China and generally poor quality. receive handsome incomes from bonuses, While China has experienced remark- red envelopes (bribes), and kickbacks, able growth in per capita gdp, growth in and they expect that their future income health expenditure per person has out- be at the same level or higher. If the gov- paced it: national health expenditure as a ernment formalized this high level of com- percent of gdp rose from 4 percent in 1990 pensation in the hope of disincentivizing to 5.2 percent in 2011. While this is a rela- corrupt practices, junior doctors, nurses, tively high percentage compared to India’s and other professional staff would demand 3.9 percent, it is a relatively low percentage comparable compensation. Government- compared to upper-middle income nations subsidized social insurance plans and such as Mexico (6.2 percent in 2011) and individual households could not afford to Brazil (8.9 percent). Chinese spending will ½nance this increase in compensation. continue to grow at a fast pace as its pop- Moreover, higher salaries alone may not ulation ages.26 end the unprofessional practices of senior physicians or village doctors. With its 2008 health system reform, Establishing ethical guidelines that may China af½rmed that the government as - go against the self-interest of medical prac- sumes primary responsibility for ½nanc- titioners is particularly dif½cult in present- ing health care. This commitment, along day China, where the pursuit of personal with other new declarations, promises to material wealth is viewed as a widely ac- reduce the serious disparities between cepted, if not glorious, social value. China’s health care in urban and rural communi- unfettered free market, with its crony ties. However, it may take more than a capitalism and widespread corruption, is decade to effectively address the maldis- simply not conducive to the ethical prac- tribution of health professionals between tice of medicine, which may call upon the two demographics. physicians to sacri½ce personal gains for The challenge that China faces now is patients’ welfare. how to address the two fundamental China is also confronted by the challenge drivers of poor quality health care and of governing the public hospitals that rapid health expenditure inflation rates. deliver 90 percent of hospital inpatient The causes are interrelated and reinforc- and outpatient services and absorb 60 per- ing. The ½rst is the disappearance of pro- cent of national health expenditures.27 fessional ethics in medical practices. Under the current system, Chinese public Practicing medicine under a pro½t-driven, hospitals do not transform money into commercialized medical system for nearly ef½cacious services; and more investment three decades has eroded professional in health may not improve health out- ethical constraint in clinical decision- comes. Moreover, because oversight of

143 (2) Spring 2014 65 Correcting China’s public hospitals is divided between of the two growing states can shed some Past Health multiple governmental agencies, the actual light on Chinese accomplishments and Policy Mistakes governance of the hospitals is character- pains in health care. About a decade ago, ized by contradictory policies of various both governments turned their attention ministries. In total, at least eight ministries to health care with a focus on the poor, control some important part of a public spending an additional 1 percent of their hospital’s operations. Each ministry has country’s gdp on health services. A decade its own policies, which are not necessarily later, 95 percent of children in China and consistent or coordinated with those of 43.5 percent of children in India are fully other ministries. As a result, one agency vaccinated; infant mortality rate is 17 per may demand that physicians prioritize 1,000 live births in China, compared with healing the patient, while another agency 50 per 1,000 births in India; 98.7 percent may provide a perverse incentive to do ex - of births in China and 40.8 percent in India actly the opposite. The Ministry of Health are delivered in institutions; life expectancy is responsible for the population’s health, at birth is 73.5 years in China and 65.5 years but does not control the essential inputs: in India.28 Both nations have been trying ½nancial resources, human resources, or to provide universal health insurance with capital investments. Four different min- shallow bene½ts since 2003. Currently, istries control ½nancial inputs: the Nation- about 95 percent of Chinese and 25 per- al Development and Reform Commission cent of Indian citizens have health insur- sets prices for health services and drugs ance coverage.29 Only one-half of the In - and controls capital investments, the dian poor eligible for free hospital insur- Commission on Personnel sets the num- ance are actually covered today.30 ber of staff that hospitals can employ, the The difference in outcomes can partly ccp Organization Department appoints be explained by the attention China gave the director and other leaders of the hospi- to public health since the mid-1960s, as tal, and the Ministry of Personnel sets well as the different strategies adopted to work and compensation regulations and improve health. The Chinese Communist controls staff appointments. Under these government began prioritizing the provi- circumstances, public hospitals are un - sion of basic health care to peasants in the certain of their functions and social re - mid-1960s, long before the Indian govern- sponsibilities, and they are held account- ment did. China also emphasized preven- able not for quality and appropriateness tion and primary care delivered by mod- of services provided to patients, but only estly trained health workers. The Indian for pro½ts or losses. strategy (except in a few states such as Ker- Reforming the governance structure of ala) relied on public health services staffed public hospitals will require a major re - by fully trained physicians and nurses, but structuring of the power, function, author- due to inadequate public ½nancing and ity, and accountability of many ministries. poor governance, these public facilities Such reform demands agreement among could not meet the population’s basic numerous bureaucratic stakeholders and health needs. Lastly, China has an autocrat- powerful political leaders–a major chal- ic but effective government that can imple- lenge under the best of circumstances. ment its policies ef½caciously, while India’s democratic government struggles to reach Both China and India have achieved consensus and implement its policies. enviable economic growth during the past Indian economist Amartya Sen has ar- decade, and a simple comparative analysis gued that economic growth and increased

66 Dædalus, the Journal ofthe American Academy of Arts & Sciences gdp per capita may not necessarily re- and access to quality health services. The William C. duce social inequalities.31 This is clearly policies that China implements to nar- Hsiao evident in both China and India. Between row these disparities will tell us about the their urban and rural residents, both social values that undergird the govern- nations are confronted by huge disparities ment’s actions, as well as the Chinese in health status, health spending per capita, political economy on social policy. supply of facilities, quali½ed medical staff,

endnotes Author’s Note: I would like to thank Mingqiang Li for his superb contribution to this paper. He diligently and thoroughly gathered the data and assisted in the analysis. 1 See Barry Naughton, Growing Out of the Plan: Chinese Economic Reform, 1978–1993 (Cambridge: Cambridge University Press, 1996). 2 The World Bank, “Results Pro½le: China Poverty Reduction,” March 19, 2010, http://www .worldbank.org/en/news/feature/2010/03/19/results-pro½le-china-poverty-reduction (accessed August 8, 2013). 3 See Fu Jun, “World Economic Downturn and Challenges for China,” paper presented at Money and Banking Conference: Lessons and Challenges for Emerging Countries during the Crisis, Buenos Aires, Argentina, August 31–September 1, 2009. 4 See “Chinese Migrant Workers Exceed 260 Million by 2012,” Xinhua News Agency, May 23, 2013, http://news.xinhuanet.com/english/china/2013-05/27/c_132411765.htm (accessed August 1, 2013). 5 National Bureau of Statistics of People’s Republic of China, China Statistical Yearbook 2012 (Beijing: China Statistics Press, 2012); see also previous years’ statistical yearbooks. 6 See Yana Ling, “Gini Coef½cient Release Highlights China’s Resolve to Bridge Wealth Gap,” Xinhua News Agency, January 21, 2013, http://news.xinhuanet.com/english/china/2013 -01/21/c_132116852.htm (accessed August 1, 2013). 7 Martin King Whyte, ed., One Country, Two Societies: Rural-Urban Inequality in Contemporary China (Cambridge, Mass.: Harvard University Press, 2010). 8 See Joseph Kahn, “China’s ‘Haves’ Stir the ‘Have Nots’ to Violence,” The New York Times, December 31, 2004. 9 See Xue-Qiang Wang, Xiao-Tong Wang, and Jie-Jiao Zheng, “How to End Violence Against Doctors in China,” The Lancet 380 (9842) (2012): 647–648. 10 See Therese Hesketh and Xing Zhu Wei, “Health in China: From Mao to Market Reform,” BMJ (British Medical Journal) 314 (7093) (1997): 1543. 11 See Winnie Yip and William C. Hsiao, “The Chinese Health System at a Crossroads,” Health Affairs 27 (2) (2008): 460–468. 12 David Blumenthal and William Hsiao, “Privatization and Its Discontents–the Evolving Chinese Health Care System,” New England Journal of Medicine 353 (11) (2005): 1165–1170. 13 Karen Eggleston, Li Ling, Meng Qingyue, Magnus Lindelow, and Adam Wagstaff, “Health Service Delivery in China: A Literature Review,” Health Economics 17 (2) (2008): 149–165. 14 Data source: Ministry of Health of People’s Republic of China, China’s Health Statistics Yearbook 2012 (Beijing: Peking Union Medical College Press, 2012); see also previous years’ health statistics yearbooks.

143 (2) Spring 2014 67 Correcting 15 See Winnie Yip and William C. Hsiao, “Non-Evidence-Based Policy: How Effective is China’s Past Health New Cooperative Medical Scheme in Reducing Medical Impoverishment?” Social Science & Policy Medicine 68 (2) (2009): 201–209. Mistakes 16 Data source: National Bureau of Statistics of People’s Republic of China, China Statistical Yearbook 2012; and Ministry of Health of People’s Republic of China, China’s Health Statistics Yearbook 2012. See also previous years’ yearbooks. 17 See William C. Hsiao, “The Political Economy of Chinese Health Reform,” Health Economics, Policy and Law 2 (3) (2007): 241. 18 See Wanchuan Lin, Gordon G. Liu, and Gang Chen, “The Urban Resident Basic Medical Insurance: A Landmark Reform Towards Universal Coverage in China,” Health Economics 18 (S2) (2009): S83–S96. 19 See Winnie Yip, William C. Hsiao, Wen Chen, Shanlian Hu, Jin Ma, and Alan Maynard, “Early Appraisal of China’s Huge and Complex Health-Care Reforms,” The Lancet 379 (9818) (2012): 833–842. 20 Wen Chen, “The Analysis of the Characteristics and Defects of China’s Pharmaceutical Price System,” Shanghai Pharmaceuticals 26 (22) (2005): 533–535. 21 Yongbin Li, Jing Xu, Fang Wang, Bin Wang, Liqun Liu, Wanli Hou, Hong Fan, et al., “Over- prescribing in China, Driven by Financial Incentives, Results in Very High Use of Antibiotics, Injections, and Corticosteroids,” Health Affairs 31 (5) (2012): 1075–1082. 22 Winnie Yip, Timothy Powell-Jackson, Wen Chen, Min Hu, Eduardo Fe, Mu Hu, Weiyan Jian, et al., “A Cluster-Randomised Evaluation of the Effect of Capitation with Pay-for-Performance on Primary Care Providers’ Antibiotic Prescribing Practices in Rural China,” working paper (2013). 23 Adam Wagstaff, Winnie Yip, and Meng Qingyue, “Impact Evaluation on Paying for Per- formance in China’s Health Sector (Evaluation of Health XI),” report on the sief Project (2011). 24 Qian Long, Reija Klemetti, Yang Wang, Fangbiao Tao, Hong Yan, and Elina Hemminki, “High Caesarean Section Rate in Rural China: Is It Related to Health Insurance (New Co-operative Medical Scheme)?” Social Science & Medicine 75 (4) (2012): 733–737. 25 Ministry of Health of People’s Republic of China, “Report on the Implementation of National Essential Medicines Policies” (Beijing: Ministry of Health, 2011). 26 World Health Organization, The Global Health Expenditure Database, http://apps.who.int/ nha/database/PreDataExplorer.aspx?d=1 (accessed August 26, 2013). 27 Yip et al., “Early Appraisal of China’s Huge and Complex Health-Care Reforms.” 28 The data on full vaccination and institutional delivery are from International Institute for Population Sciences, National Family Health Survey-3 (2005–2006); and Ministry of Health of People’s Republic of China, China’s Health Statistics Yearbook 2011 (Beijing: Peking Union Medical College Press, 2011). Infant mortality and life expectancy are from the World Bank, World Development Indicators, http://data.worldbank.org/data-catalog/world-development -indicators. 29 See Gerard La Forgia and Somil Nagpal, “Government-Sponsored Health Insurance in India: Are You Covered?” (Washington, D.C.: World Bank Publications, 2012). 30 Ministry of Labour and Employment, Government of India, “Rashtriya Swasthya Bima Yojana: National Summary,” http://www.rsby.gov.in/overview.aspx (accessed August 26, 2013). 31 See Amartya Sen, “Quality of Life: India vs. China,” The New York Review of Books, May 12, 2011, http://www.nybooks.com/articles/archives/2011/may/12/quality-life-india-vs-china/.

68 Dædalus, the Journal ofthe American Academy of Arts & Sciences State Schemes or Safety Nets? China’s Push for Universal Coverage

Mark W. Frazier

Abstract: After rapid changes in social policy and increases in social expenditures over the past ½ve years, many of the uniformly negative assessments of China’s record on health care, retirement pensions, and other forms of social security have to be reconsidered. This article examines the rapid expansion in social policy coverage and spending, and considers the possible signi½cance of these changes for Chinese politics. The administrative and territorial categories that have de½ned access to social welfare provision over the history of the People’s Republic of China have not yet receded, but their signi½cance has diminished with programs that create uniform eligibility across rural and urban categories of citizenship. Large gaps in bene½ts remain, and are likely to generate political demands in the future as urbanization continues to erode the administrative distinctions between urban and rural.

For much of the past decade, assessments of so cial policy in China–that is, state-½nanced protections against such risks as illness, poverty, unemployment, and old age–have ranged from pessimistic to dismal. In a widely cited report, the World Health Organi- zation in 2000 ranked China as 144 out of 152 coun- tries for health system performance.1 Numerous studies, including those from China’s own Ministry of Health, acknowledged that only 10 to 15 percent MARK W. FRAZIER is Professor of of rural households had any form of medical insur- Politics and Co-Academic Director ance. Between roughly 1995 and 2010, an estimated of the India China Institute at The 30 to 40 million peasants lost their land, and about New School. His publications in- clude Socialist Insecurity: Pensions and the same number of factory workers lost their jobs. the Politics of Uneven Development in For the latter, job loss also meant the sudden termi- China (2010) and The Making of the nation of a full range of factory-distributed bene½ts. Chinese Industrial Workplace: State, Income inequality, a related metric of overall social Revolution, and Labor Management welfare, rose rapidly to levels approaching those (2002), as well as articles in Asia found in countries known for highly uneven distri- Policy, The China Journal, and Studies butions of wealth, such as Brazil and South Africa. in Comparative International Devel- opment. He has contributed essay If one includes in the scope of social policy the broad- and op-ed pieces to The New York er issues of environmental and resource degradation, Times, The Diplomat, and World Pol- pollution, and food safety scandals, the picture grows itics Review. even bleaker.

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00273

69 State This article considers recent, in some raise education expenditures to 4 percent Schemes ways sweeping changes in China’s social of gdp.2 Pension expenditures for 68.2 or Safety Nets? policies (sometimes referred to in Chinese million urban retirees in 2011 reached 1.3 China’s as “social security” [shehui baozhang] or trillion rmb (US$208.7 billion).3 Push for Universal “social construction” [shehui jianshe]), These massive increases in social spend- Coverage including their effects thus far in address- ing, and the rapid enrollment of hundreds ing the rural/urban divide. During the of millions of uninsured in various social same decade that bleak assessments of insurance programs, should not be taken China’s social welfare pro½le and the pre- as a sign that China’s social policy woes, let dictions arising from them have drawn so alone its widening income gaps, are now a much attention, a rapid expansion of so- thing of the past. Still, the reorientation of cial policies has been under way. A central China’s social policy is worth careful government that had positioned itself at consideration, for why it came about and a comfortable distance from the costly for what it can reveal about state capacity commitments of social policy throughout and the goals of the leadership. As one ex- the 1980s and 1990s reversed course in the ample, Wu Bangguo, chair of the Standing early 2000s, with numerous policy mea- Committee of the National People’s Con- sures introduced, including the campaign gress and the number-three ranked Chi- to build the “New Socialist Countryside.” nese Communist Party (ccp) of½cial in the Central ministries and of½cials were less outgoing Politburo Standing Committee, willing to allow market forces and local declared in his March 2013 work report governments to provide (or, more often, that “[e]radicating poverty and bringing not to provide) crucial public goods related prosperity to all is an essential require- to health care, retirement pensions, pov - ment of socialism.”4 erty relief, basic education, and so forth. How one assesses China’s social policy In all these categories, China’s leader- shortcomings and recent measures to ad- ship, in a fashion that has come to typify the dress them reflects the choice, explicitly Chinese government of the twenty-½rst or implicitly, of other countries that one century, has decided to allocate colossal places in comparison with China. The amounts of funding. With an estimated East Asian developmental states and the 700 billion rmb in central government post-socialist transitional economies are subsidies, local of½cials were mobilized most commonly selected as comparison in 2006 to register every village resident groups for China. Yet as the discussion that (and urban residents without full-time follows will reveal, China does not ½t well employment) in a “voluntary,” rudimen- into either group. The East Asian cases tary rural cooperative health insurance for the most part enjoyed what is now scheme. By 2011, Ministry of Health of - labeled as “inclusive growth,” and their ½cials claimed to have enlisted 1.28 billion rapid expansions in social policy were long participants, a rate approaching the goal delayed, often accelerating after political of universal health insurance coverage. transitions. The post-socialist cases were, In the 2013 Government Work Report to unlike China, heavily urbanized and pro- the National People’s Congress, outgoing vided universal coverage under their Premier Wen Jiabao stated that spending planned economies. With the dismantling on education over the previous ½ve years of socialism, liberalization and austerity totaled 7.8 trillion rmb (US$1.26 trillion), measures placed great pressure on these and by growing at 21.6 percent each year, governments to scale back social expen- had achieved the government’s goal to ditures. A more useful grouping for com-

70 Dædalus, the Journal ofthe American Academy of Arts & Sciences paring China’s social policies can be found tors in the 1960s and 1970s remain central Mark W. outside these usual peer groups. Several in the narratives and recollections of this Frazier other large economies, like China, have period. For urban residents, social wel- both legacies of large rural/urban inequal- fare could be summed up by the term “iron ity and periods of rapid growth. I have rice bowl,” which guaranteed employment used the term “large uneven developers”5 and gave extensive cradle-to-grave welfare to refer to cases such as Brazil, South Af - bene½ts delivered through one’s place of rica, India, and others that en counter work. Most of the improvements in na- almost built-in structural inequalities be- tional-level measures such as life ex- cause of history and geography. (Twenti- pectancy and literacy took place at this eth-century Mexico, late-nineteenth- time, admittedly from a very low baseline century Russia, and the United States from in the late 1940s. the mid-nineteenth to mid-twentieth The positive assessment of the Mao century could also ½t this category.) period in terms of health care and educa- When such countries experience econom- tion outcomes should not lead to the con- ic growth, the transformations of their clusion that the Chinese state at this time rural and urban sectors inevitably generate distributed access to social welfare in an high levels of income inequality as well as egalitarian fashion. As Martin Whyte ex - politics over how to reduce the inequality. plains in his essay in this issue, the ccp While political outcomes and policies are established the rigid spatial boundaries in no way predetermined, one does seem that de½ne differential access to social to ½nd in each of these cases pressures for welfare to this day. It is worth noting that redistribution of wealth across regions. Mao’s successors in the late 1970s were The discussion that follows addresses quick to abolish the class labels that fos- China’s enduring sources of inequality and tered bitter divisions and conflict, but inequity in past patterns of welfare provi- they left in place many of the designa- sion, during the Maoist and reform eras. tions that created wide gaps within the One of the key themes is the salience of population in terms of access to social the spatial–not simply in geographic welfare. The most well-known of these is terms, but in administrative categories the household registration system (hukou), that locate individuals and households in which was introduced in the late 1950s distinct zones of access to social policy. amidst the mass migrations of the Great As urbanization and other structural Leap Forward (1958–1960) and ensuing changes ensue, the lines that demarcate famine. Even before this time, rural pop- and stipulate access to social policies are ulations in the 1950s sought out the far eroding. A concluding comparative dis- superior living conditions found in cities. cussion addresses further the politics of It was clear even then that the bene½ts social policies in China and other large extended by the rural collectives were far uneven developers. below those of the “iron rice bowl” found in the city. The household registration The social policies and welfare provi- policy made it impossible to transfer res- sion of the Mao era (1949–1976) evoke in idency, by limiting access to urban jobs the minds of many older Chinese citizens and social services to only residents who a time when access to primary health care held local registration documents within and education was assured by the state a given city. regardless of one’s income. Public health In today’s China (and among foreign au - campaigns in the 1950s and barefoot doc- diences), the household registration sys-

143 (2) Spring 2014 71 State tem is the most often discussed and the wage differences to be. The Maoist state Schemes most visible legacy of the Maoist era’s ensured that these differences in pay would or Safety Nets? unequal delivery of welfare provision. be low, even between a factory director China’s But there are many other, less noted forms and a temporary worker. But the distinc- Push for Universal of inequality in access to social welfare. tions in status and in access to non-wage Coverage During the Mao era, one could ½nd con- bene½ts were vast. siderable differentiation in welfare ben- In sum, by the end of the Maoist era, e½ts within individual units such as a fac- rural areas had seen marked improve- tory or hospital. Full-time permanent ments in basic living conditions through workers in state enterprises enjoyed, in the delivery of primary health care and comparison with temporary workers and education from rural collectives, but apprentices, superior bene½ts for medical these public goods varied widely and fell care, pensions, and housing, among other far below the bene½ts that urban resi- things. Such divisions and unequal access dents received. Mobility restrictions and to bene½ts became the source of bitter administrative hierarchies created at least and violent disputes within many facto- three tiers of citizenship and access to so- ries during the Cultural Revolution. Full- cial polices: rural, urban, and of½cialdom. time state enterprise employees also en - (Many more tiers could be found within joyed lavish bene½ts and housing condi- each.) The fact that these vastly different tions relative to workers in the collective tiers of welfare provision have essentially sector. Finally, the Maoist state also grant- remained in place over the course of ed privileged access to the very best hous- three decades of market reforms may ing, services, schools, and much more for seem remarkable at ½rst glance. But con- party and government of½cials. sidering the trajectory that China’s re- From the perspective of rural develop- forms have taken, these extended pat- ment, the Maoist state certainly achieved terns of welfare exclusion and distribu- signi½cant milestones in the formation of tion are more easily understood. rural health cooperatives and primary education. Yet from the metric of equity The legacies of the Maoist era, when and progressiveness in social policy (based combined with the introduction of mar- on the assumption that the poor should ket reforms and a ½scal policy that relied have access to more programs and more heavily on localities to raise their own generous levels of support than the non- funds, placed China on the path of rapid poor), the Maoist state was no more pro- but highly uneven development. This well- gressive than any other government that known story of inequalities among east- steers public welfare support toward those ern, central, and western regions; the lin- at the upper rungs of the social hierarchy: gering income gaps between urban and civil servants, military of½cials, and em - rural areas; and the wealth accumulated ployees in strategic sectors. Moreover, in - by corrupt local of½cials need not be re - equality measures that report low levels counted here. The main point is that rigid of income inequality as a baseline for the distinctions in citizenship status and wel- start of the reforms can thus be quite mis- fare access that were in place in the de- leading. Expressing income inequality in cades before the reforms were only an economy that has state-determined ampli½ed when the government intro- wages, and no individual capital owner- duced market forces to various sectors. ship or property income, is simply to re - Higher returns to education via higher peat what state policy has determined wages in the labor market naturally went

72 Dædalus, the Journal ofthe American Academy of Arts & Sciences to those who lived in cities. Pro½ts from dency to reinforce and widen inequali- Mark W. marketing agricultural goods went to those ties. As urbanization and migration ac - Frazier who administered the distribution system: celerated, social policy designs ½nally be- township and county of½cials. In the gan to recognize the impracticality, and rural sector, the reduction in the absolute indeed the folly, of stipulating spatially number of households below the poverty and administratively de½ned categories. line took place alongside the collapse of What did it mean to have separate poli- collective rural health care services and, cies for rural and urban, state and non- in some counties, a decline in primary state, of½cials and civilians, when these school enrollments. categories and the policies that they were During the 1990s, as central of½cials based on were made irrelevant by urban designed vague outlines of social policies migration, state-sector transformation, to provide support to overtaxed peasants and the blurring of public and non-public and laid-off workers, they did so on the entities? Pension regulations in 1997, for baseline of existing administrative divi- example, were titled “Pension Regulations sions and residency status. Social policy for Urban Enterprise Employees,” which designs reflected the category of citizen- still reflected the urban/rural distinction, ship that one had been given by birth and but ignored past distinctions in owner- by state job allocation: rural or urban ship type, among collective, state-owned, hukou, enterprise employee or adminis- private, and foreign-invested enterprises. trative personnel in a public agency, and (The 1995 Labor Law had also dismantled many others. Gender and ethnicity, tell - the practice of treating separately employ- ingly, were never salient categories in ees in each category of enterprise owner- social policies that were so heavily influ- ship.) Regulations for health insurance also enced by the legacies of the planned made no distinctions in ownership, while socialist economy (with the notable ex - retaining the category of “urban enter- ception of population planning). The prise employees.” The policy-designated reform era’s heavy assignment of spend- category of “urban enterprises” obviously ing responsibilities to local governments excluded the urban self-employed, or further contributed to the deepening of anyone who was not working, voluntarily spatially based administrative categories. or otherwise. It also excluded those who Rural townships with more abundant fac- worked outside of the borders of an urban tor endowments and experience with ad- district, even if they were engaged in ministering rural enterprises had a greater manufacturing, as were many township likelihood of providing public goods, and village enterprises. The broad category including social welfare schemes. But of some 30 million personnel in public more important, the obsession with self- administrative units (shiye danwei) and ½nanced governance meant that any civil servants continued to receive sepa- mechanism to transfer public ½nances rate treatment in policy. from well-off townships to poor townships Still, these new social policy regula- was lacking. In short, spatially derived in - tions laid out an important principle– equalities that existed in the Mao era were which would take at least ten years to be locked in, and ampli½ed, under market ful½lled in any practical manner–that reforms. migrant workers and urban residents But something important occurred employed in the same “urban enterprise” around the late 1990s to check this widen- had access to the same bene½ts and pro- ing divergence in social policy and its ten- visions in social policy programs. And in

143 (2) Spring 2014 73 State recent years, cities such as Hefei and gram (dibao) for the urban poor was also Schemes Chengdu have announced measures to introduced at this time. Urban protests by or Safety Nets? provide the same pension coverage to their retired and laid-off workers, once common China’s rural populations (living outside the cities occurrences, are now rare in most cities. Push for Universal but administered by the city government) In part, the explanation lies with the cen- Coverage as urban residents receive. One such rural tral government’s commitments. Over the hukou holder who had just received pen- past decade, a cumulative total of 500 bil- sion eligibility told Xinhua, “Only when lion rmb in subsidies for pensions alone I’m covered with pension insurance do I has been distributed from the central feel like an urban citizen.”6 In Chengdu, government to local government.8 Also Chongqing, and a few cities in Guang- keeping protests under wraps has been the dong province, local experiments have deployment of a vast “social management” granted pension rights to residents of ru - apparatus, described in the essay by Ching ral counties surrounding urban areas in Kwan Lee in this volume, that includes exchange for land use rights.7 “stability maintenance of½ces” (weiwen- While the three tiers of the past remain ban) to disburse protestors with cash pay- in place, with rural, urban, and of½cials ments negotiated on the spot with protest receiving different treatment under sepa- leaders. rate programs, urbanization and migration The number of migrant workers receiv- continue to erode the rural and urban dis- ing coverage for health insurance is now tinction. The 2010 Social Insurance Law 46.4 million, up from essentially none further eroded these spatial and adminis- (save for a few local experiments) in the trative distinctions by simply referring to 1990s. Workplace injury, a chronic prob- “employing units” (yongren danwei) and lem in export processing zones, mines, and “employees” (zhigong) in its various clauses. other areas with high concentrations of Meanwhile, the 30 million civil servants migrant workers, is addressed through and employees in administrative units are compensation under another social in- under increasing pressure to ½nance some surance program. (Legal claims for an em - of the heretofore entirely free access to ployer’s negligence are another matter.) health insurance and pensions. Civil ser- A reported 68.3 million migrant workers vant pensions and free health care insur- now have accident insurance. The govern- ance have come under heated criticism on ment also claims that 41.4 million migrant Internet forums and even in the of½cial workers are now covered under pension press. insurance, which because of its locally ad- At the same time that the seeds were ministered nature is controversial among planted to equalize access to social insur- migrants. ance provisions, mass protests by unpaid But the most impressive achievement pensioners and other “mass incidents” in in recent years has been the rapid expan- urban areas exposed the fundamental sion of social insurance for health care incapacity of urban governments to pro- and pensions in rural areas. As part of the vide promised compensation to the vic- push for the creation of a “New Socialist tims of state-enterprise restructuring and Countryside,” the government’s effort to privatization. The central government expand rural health care was in effect a stepped in to subsidize cities and regions way of reviving the old cooperative med- that were unable to support large popula- ical care of rural areas that existed before tions of retired and laid-off workers. A sep- decollectivization. The New Rural Cooper- arate means-tested social assistance pro- ative Medical Scheme (cms) was launched

74 Dædalus, the Journal ofthe American Academy of Arts & Sciences on an experimental basis in 2002 and now Other rapid increases in state spending Mark W. claims to have 812 million participants, also need to be put in proper context. Frazier meaning that rural health care coverage Spending on education, which has reached rose from 10 to 15 percent in the late 1990s the government’s goal of 4 percent of to over 95 percent of the target popula- gdp, belies many serious problems. Pub- tion.9 By one calculation, the central gov- lic spending on education in rural China ernment between 2009 and 2011 con- remains minimal. Internet forums regu- tributed about one-third of the 1.4 trillion larly discuss inequities in education, with rmb in public expenditures on health care. debates triggered whenever a particularly (Local governments accounted for the glaring example comes to light, as was the other two-thirds.) About half of the 1.4 case in 2012, when it was reported that trillion rmb in spending went toward children in two villages in Hubei province subsidies for the uninsured to enroll in had to bring their own desks to school.13 health care schemes (largely for the rural Anecdotal accounts suggest that the cms and a program for urban residents not increases in spending have gone more so yet covered by enterprise-based health to showcase school buildings and less to care).10 teacher salaries and improvements in ed - These impressive increases in coverage ucational outcomes. With consolidation must be regarded at best as a ½rst step in of rural schools and migration from vil- resolving a complex rural health crisis, lages, the number of primary schools in described in detail in William Hsiao’s essay China continues a decline that started in for this volume. The insurance programs the late 1970s. are quite rudimentary, with people still Housing and land-use policies are not facing unaffordable out-of-pocket ex - usually regarded in a strict sense as part penses, at 50 to 60 percent of inpatient of social welfare policy in most countries, medical costs. Given the rising costs of but they are closely linked to welfare pro- medical care and medication, these pro- vision in China. During the dismantling grams are insuf½cient to reduce the threat of most state-owned enterprises and the of catastrophic ½nancial expenses. A mass layoffs that ensued in the 1990s, household survey that found 12.9 percent local governments took the highly sig - of respondents (rural and urban) facing ni½cant step of selling state factories’ catastrophic health expenses concluded worker housing stock to individual house - that this converted to about 173 million holds at minimal prices (affordable even people living in households with such for most low-income workers). This con- ½nancial burdens.11 For rural and urban stituted what later turned out to be a mas - residents alike, a visit to the hospital for sive transfer of wealth to working class any major medical procedure requires, families, as urban real estate prices soared. with few exceptions, that patients pay all Housing prices and possession became charges up front and in full. It is then up the source of great tension and social to the patient to pursue the laborious unrest as urban governments subsequently process of seeking health care reimburse- sought to remove households from their ments from the local social insurance newly acquired dwellings at prices far be- agency. Reimbursements for urban resi- low what real estate developers would pay dents are capped at low levels–about to city planning agencies and their land four times the local per capita annual in - corporations. In rural areas, land posses- come. For the rural cms, maximum re- sion through the collective had been imbursements are much lower.12 offered as a rationale in the 1990s for gov-

143 (2) Spring 2014 75 State ernments to exclude rural households lion rmb for the additional expenses to Schemes from the social insurance programs given subsidize the higher rates of social insur- or Safety 14 Nets? to urban residents. But as increasing ance payments for urban residents. China’s numbers of villagers were dispossessed As the Chinese government is well Push for Universal of their land, this excuse could no longer aware, at least from statements made in Coverage serve as a means of exclusion. It is no the Twelfth Five-Year Plan document and accident that the rapid increase in social other broad policy outlines, China now is insurance coverage to rural residents at a crucial turning point in its social wel- took place during the peak of rural land fare system. Local of½cials who run requisitions. As villagers lost their only China’s social insurance system on the asset that could be used for income sup- ground are approaching, and in some port in old age, they received pension and cases have reached, the limits of what is health care insurance in return. possible in terms of ½nancing under the Experiments with the construction and current model, by getting new citizens ½nancing of public and affordable housing registered for social insurance. They have have also been on the central government’s also acquired almost all of the available agenda, with Chongqing serving as a rural land, and they have converted most show case since 2007. That happened to be of the urban housing to commercial uses the year that Bo Xilai was appointed party in urban core areas. And as many have secretary, but the social housing pilots in noted, local governments at the same Chongqing were under way before then, time have gone deeply in debt to state led by Huang Qifan and with generous banks and other ½nancial entities. Leaving central government support. Bo’s removal aside whether of½cials can continue to from of½ce by the top ccp leaders came collect social insurance premiums from in part because his populist stances and employers and their workers, China’s political ambitions threatened a smooth changing demographics (see Deborah leadership transition, but the social poli- Davis’s essay in this volume) make the cur- cies under way in Chongqing will likely rent model of employer-based social in- continue without the charismatic party surance run through thousands of local secretary to take credit for them. Huang governments increasingly unviable. Pop- was reappointed mayor of Chongqing in ulation aging will make it impossible not early 2013, and the constraint on the to alter the status quo, because under cur- ambitious expansion of public housing– rent arrangements a locality’s pension and a proposed addition of 40 million square health care bene½ts are essentially funded meters between 2010 and 2020–appeared out of that locality’s workers. The shrink- to have more to do with shaky public ing workforce-to-elderly ratios will gen- ½nances than with political legacies of the erate immense pressures on the decentral - Bo years. The municipality of Chongqing ized provision of welfare. is in fact more rural than urban, by popu- It is too early to gauge the effect of these lation at least, with 20 million rural hukou recent measures on inequality. One early holders among the city’s 33 million total assessment of rural health insurance ex - residents. As such, it is an ideal location pansion, based on of½cial surveys by Peo- for experiments in granting rural hukou ple’s Republic of China Ministry of Health holders bene½ts equal to those of urban scholars and published in The Lancet, hukou holders. A program in 2010–2011 reached the optimistic conclusion that provided 3.4 million rural hukou holders “[t]he expansion of the insurance program with an urban hukou, at a cost of 208 bil- seems to have been instrumental in nar-

76 Dædalus, the Journal ofthe American Academy of Arts & Sciences rowing the inequalities in access between the bene½ciaries and the bureaucracies Mark W. rural and urban areas, between western that operate the programs. This prevents Frazier and central areas in comparison with the politicians from easily reversing policies east, and between poorer and wealthier and spending commitments. Moreover, income groups.”15 But one could just as once such policies are in place, the pres- easily point to the underlying design of sures for expansion grow, and bene½ts social insurance as an obstacle in reduc- increase. China has seen a rapid expansion ing inequalities. Just as in the American in social insurance coverage over the past Social Security or Medicare system (social ½ve years, and it faces pressures to in - insurance programs that politicians con- crease the patently unfair levels of bene½ts tinue to label as “entitlements”), one gets for rural areas. Continued urbanization, back in pensions and elderly medical care even if the hukou system is retained, will reimbursements roughly what one has heighten the necessity of providing rural paid in over the course of employment. populations with bene½ts approaching To introduce social insurance in a country those of urban residents. If China were to like China, with its vast income gaps be - face a ½scal crisis and pressure for austerity, tween urban and rural residents, there- as some observers now predict, it will be fore does little to reduce income inequal- very dif½cult to retract state commitments ities. To note just one example, the average toward social policies that were extended monthly pension for an urban retiree was to hundreds of millions of citizens in the 1,511 rmb in 2011.16 For the new rural past ten years. pension program, the nationwide mini- Whether the Chinese state at central mum monthly flat bene½t was 55 rmb, and local levels will have the ½scal capacity which was below the national average for to cope with these pressures is contingent rural minimum income support of 82 on many other factors, including future rmb.17 While the adjusted bene½t in many rates of economic growth. The point here rural counties is higher than this base level, is that regardless of the economic scenario the gap between urban and rural pensions one chooses, a politics of inclusion and remains vast. access to social policy is well under way. What all the above tells us is that a com - Politics in China will obviously differ from bination of equalized access to social those in countries with partisan and elec- policies, along with escalating spending, toral political competition over the expan- has at the very least put the Chinese state sion or retrenchment of welfare bene½ts. in the position of making substantial com- But one can see in the performances of mitments to future spending–and from politicians such as Bo Xilai and Wang Yang, the top less so than strictly from local cof- in the years prior to the leadership change fers. The signi½cance of this is worth in 2012, a conscious positioning of them- considering for what it implies for future selves as populist ½gures, or at least play- engagements between state and society ing a populist card within the narrow in China. constraints of today’s Chinese Communist Party. It is surely no coincidence that both If we know anything about politics in men had served as party chiefs in Chong - the aftermath of states that have initiated qing, the metropolitan focal point for comprehensive undertakings in welfare centrally supervised experiments to in - expansion and expenditure, as China has corporate rural populations into the urban over the past decade, it is that the policies social security system. The Bo Xilai affair tend to generate ½erce defenders, in both has no doubt reined in those with ambi-

143 (2) Spring 2014 77 State tions to serve at the top from going pub- mode in social policy would not have been Schemes lic as contenders for Politburo seats. But possible without the bene½ts of rapid or Safety Nets? the incentives for local of½cials to take growth and urbanization. Yet if there are China’s credit for expanded social insurance, for any comparisons to be made with China, Push for Universal public housing, and for increases in med- the most useful in terms of social policy Coverage ical and pension bene½ts are clearly here would be, as I suggested at the outset, with to stay. countries that possess large economies China’s substantial expansion in social with legacies of inequalities. Size is by no policy also invites comparisons that might means a suf½cient condition for economic illuminate how and whether a large growth, but when it does occur, it can ex- growing economy can translate the fruits acerbate the existing pattern of inequali- of growth into social policy outcomes ties. In large uneven developers, the de - that promote greater equity, or at least signs and details of social policy can lead reduce inequality. The categories or com- to differing outcomes: one is to reinforce parisons one chooses suggest different existing distinctions in socioeconomic trajectories for China’s social policy in the status, creating a situation in which the future. If we place China’s story within poor remain marginalized yet potentially the old framework of modernization the- mobilized on the basis of their exclusion ory, then urbanization and other structural from national social policy. Another pos- changes, including the growth of an urban sible outcome in social policy is to level middle class, could be predicted to reduce such distinctions, through policies and inequalities by simply reducing the ranks laws that have the potential to create equal of the rural poor. By contrast, accounts access to social policies and, with it, a pos- that see China and its political economy sible expansion in conceptions of citizen- as a post-socialist narrative may lead to ship. much less optimistic assessments, given At least two other large uneven devel- the fate of public health, education, and opers fall into the ½rst category. Brazil and social policy more generally in some of South Africa launched direct transfer pay - the formerly state socialist economies, ments to the poor (“social pensions”) de- particularly those of the former Soviet cades ago, after high growth brought ac - Union, including Russia. Those who see celerating income inequalities. In both China’s growth trajectory as most similar cases, governments (Brazil in the late 1970s to those of the East Asian developmental and South Africa in the 1940s) also faced states are likely to take the recent trans- great pressures from rural migration into formations in social policy as another in - cities. Their new social policies did little stance of successful “growth ½rst” policies to reduce entrenched social inequalities, in which social spending and consumption let alone the closely related measures of are ½rst repressed and then gradually income inequality. India would be an ex- introduced after decades of rapid growth. ample of the second outcome, in which so - (This overlooks the fact that the East Asian cial policies and laws generate a pattern of cases, unlike China, enjoyed growth with rights movements and legal mobilization. relatively low levels of inequality.) Thus far, China seems to have taken I prefer a framework that reads China’s neither the path of “expansion and exclu- welfare expansion as a more contingent sion” (Brazil and South Africa) nor that event and not the inevitable outcome of of social legislation and mobilization social structure or economic transitions. (India). The Chinese government has en - It is true that the current expansionary acted a host of administrative measures

78 Dædalus, the Journal ofthe American Academy of Arts & Sciences and has increased spending on many areas tential to create a form of politics in which Mark W. of social policy. But the transformations these groups, de½ned in policy, pursue Frazier in China’s social policies are more cate- concrete demands on the state for greater gorical and spatial rather than substantive. bene½ts or protection from bene½ts cuts. Rural residents and migrants who lack The “harmonious society” envisioned by coverage are being brought into health care the ccp over the past decade of social and pension programs that still possess policy expansion is more likely to be - numerous, serious flaws. This movement come (or remain) a contentious society of of spatially designated groups into social groups making claims for expanded access policies will neither enhance nor erode the to social spending–and all the more con- prospects for continued ccp rule in China. tentious if the Chinese state faces ½scal But this transformation does have the po- constraints in the future.

endnotes 1 World Health Organization, The World Health Report 2000 (Geneva: World Health Organi- zation, 2000), 152. China was ranked so low overall largely for the assessment on the “Fair- ness in Financial Contribution” component, where China placed 188th out of 191 countries (see p. 191). This component is based on household contributions to the overall ½nancing of the health care system–meaning that households in China bore most of the costs of health care expenditures (p. 148). 2 Wen Jiabao, “Report on the Work of the Government,” March 5, 2013. 3 “2011 niandu renli ziyuan he shehui baozhang shiye fazhan tongji gongbao” [“Ministry of Human Resources and Social Security, Statistical Report on Developments, 2011”], June 5, 2012; available at http://www.mohrss.gov.cn/SYrlzyhshbzb/zwgk/szrs/ndtjsj/tjgb/20120 6/t20120605_69908.htm. 4 Wu Bangguo, “Report on the Work of the Standing Committee of the National People’s Con- gress,” March 8, 2013. 5 Mark W. Frazier, “Welfare Policy Pathways Among Large Uneven Developers,” in Beyond the Middle Kingdom: Comparative Perspectives on China’s Capitalist Transformation, ed. Scott Ken - nedy (Stanford, Calif.: Stanford University Press, 2011), 89–109. 6 “China Focus: Rapid Urbanization Poses Challenges for China’s Social Security System,” Xinhua, March 2, 2012, http://news.xinhuanet.com/english/indepth/2012-03/02/c_131442 482.htm. 7 Fang Cai, John Giles, Philip O’Keefe, and Dewen Wang, The Elderly and Old Age Support in Rural China: Challenges and Prospects (Washington, D.C.: The World Bank, 2012), 92. 8 Wang Fayan and Li Yu, “2010nian Zhongguo shehui baoxian zhidu jianshe xin jinzhan” [“New Developments in the Establishment of China’s Social Insurance System in 2010”], in 2011nian Zhongguo shehui xingshi fenxi yu yuce [Chinese Society Analysis and Forecast, 2011], ed. Ru Xin, Lu Xueyi, and Li Peilin (Beijing: Shehui kexue wenxian chubanshe, 2011), 51. 9 “The Development of China’s New Rural Cooperative Medical Scheme,” China.org.cn, Sep- tember 17, 2012, http://www.china.org.cn/china/2012-09/17/content_26545922.htm. 10 Winnie Chi-Man, William C. Hsiao, Wen Chen, Shanlian Hu, Jin Ma, and Alan Maynard, “Early Appraisal of China’s Huge and Complex Health Care Reforms,” The Lancet 379 (March 3, 2012): 836. 11 Qun Meng et al., “Trends in Access to Health Services and Financial Protection in China be- tween 2003 and 2011: A Cross Sectional Study,” The Lancet 379 (March 3, 2012): 812.

143 (2) Spring 2014 79 State 12 Lan Fang, “Death and Dying in the Provinces,” Caixin online, May 18, 2012, http://english Schemes .caixin.com/2012-05-18/100391842.html. or Safety Nets? 13 “Hubei sanqian nongcun xuesheng zidai kezhuo shangxue youren ban chaji dang zhuozi” China’s [“In Hubei, 3,000 Village Students Bring Their Own Desks to School; Some Use Tea Tables Push for as Desks”], People’s Daily online, September 3, 2012, http://politics.people.com.cn/n/2012/ Universal 0903/c70731-18907172-1.htm. Coverage 14 Romain Lafarguette, “Chongqing: A Model for a New Economic and Social Policy?” in China Analysis: One or Two Chinese Models? (European Council on Foreign Relations, Asia Centre, 2011), 13–15. 15 Meng et al., “Trends in Access to Health Services and Financial Protection in China between 2003 and 2011,” 812. 16 “2011 nian quanguo shehui baoxian qingkuang” [“Nationwide Social Insurance Conditions”], Ministry of Human Resources and Social Security, August 2, 2012, http://www.mohrss.gov .cn/SYrlzyhshbzb/zwgk/szrs/qttjcl/201208/t20120802_66206.htm. 17 Cai et al., The Elderly and Old Age Support in Rural China, 125.

80 Dædalus, the Journal ofthe American Academy of Arts & Sciences China’s Workers Movement & the End of the Rapid-Growth Era

Mary E. Gallagher

Abstract: China’s rapid economic growth period was predicated on a development model that exploited the stark divide between its urban and rural citizens. As the workshop of the world, Chinese factories tapped the vast surplus labor of the countryside. Rural workers’ expectations were low, but their desire for new employment opportunities was boundless and their numbers seemed limitless. Three decades later, these conditions have changed: workers’ expectations are higher and their numbers are diminishing as the population ages. Labor disputes and strikes are endemic as the expectations and aspirations of workers outpace the nation’s slowing growth rate. Compared to the anemic labor movements in the West, China’s workers are emboldened, though they are still hampered by a repressive political environment and strict con- straints on freedom of association. Conflict is spontaneous and settlement is ad-hoc. Like many authoritar- ian regimes, the Chinese Communist Party has dif½culty committing to the institutionalization of labor con- flictas it heightens the possibility of social empowerment. The state remains in charge, which also means that labor-capital conflict almost invariably metastasizes into a confrontation between workers and the state.

China’s export powerhouse, its monopoly on production of many vital and common household goods, is built on the backs of its rural migrant workers: residents of rural China who have left their countryside homes to participate in industrial labor and the growing urban service economy.1 No other reforming socialist economy had such ideal MARY E GALLAGHER conditions for capitalist transformation. In most . is Associate other cases, even before the political revolutions of Professor of Political Science at the University of Michigan, where 1989, economic reform and transition required she is also the Director of the Cen- attacking the socialist core of the economy: the ter for Chinese Studies. Her publi- state and collective sectors and the large portion of cations include Contagious Capital- the workforce employed therein. China’s reform ism: Globalization and the Politics of trajectory has been different. Dynamic new sec- Labor in China (2005), From Iron tors, including both domestic private and foreign- Rice Bowl to Informalization: Markets, invested industry, were created prior to the restruc- Workers, and the State in a Changing China (edited with Sarosh Kuruvilla turing of the public sectors that had employed the and Ching Kwan Lee, 2011), and vast majority of the urban workforce. China’s Chinese Justice (edited with Margaret economy “grew out of the plan,” with the state sec- Woo, 2011). tor facing restructuring and downsizing only after

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00274 81 China’s China’s economy had found new sources country.6 The China Labour Bulletin (clb) Workers of growth.2 But these new sources of entitled its 2011 report on Chinese labor Movement & the growth were predicated on a development Unity is Strength, a direct quotation from the End of model that exploited the stark divide slogans of the striking Honda workers, who the Rapid- Growth Era between urban and rural citizens in China. despite their relatively young age and dis- As the workshop of the world, Chinese parate backgrounds, emphasized growing factories tapped the vast surplus labor of solidarity among workers.7 the countryside, those Chinese citizens The events of 2010 came on the heels of unincorporated into socialist welfare and the turbulent passage of China’s Labor largely emerging out of rural subsistence Contract Law in 2007 and its implemen- agriculture.3 Their expectations were low, tation in 2008, right when the impact of but their desire for new employment op- the global ½nancial crisis was beginning portunities was boundless. For the two de- to be felt in China’s export sector.8 In 2008, cades after reform leader Deng Xiaoping’s labor disputes doubled in number, and 1992 “southern tour,” this process would courts were inundated with labor cases; continue, extending geographically and by early 2009, in the aftermath of the eco- across sectors. Migrant labor would also nomic upheaval taking place in the United become essential to China’s construction States and other developed economies, boom and the boom in the urban service nearly thirty million migrant workers were economy, the latter fueled by the growing laid off. The 2010 strikes, while following class of urban citizens with time and mon- this trend of increased labor conflict, were ey to spend on leisure and in their private also a reflection of improvement in the lives. Chinese economy brought on by the gov- By the close of these two decades of mas- ernment’s stimulus package and large in- sive rural migration, the Chinese economy creases in government investment. While –and with it, the entire world of work– workers in other countries struggled with had been transformed. In the spring of declining living standards, growing un - 2010, a group of workers in a Honda sup- employment, and political assaults on the plier factory in southern Guangdong Prov- right to organize collectively, the Chinese ince went on strike for higher wages, better labor movement emerged from the crisis conditions, and effective representation.4 with increased con½dence and more space The strike shut down Honda’s entire China to make its claims and demands. production and led to copycat strikes in The relative vigor of Chinese workers’ other factories and across other regions. activism stands in sharp contrast to the These events drew domestic and inter- state of labor movements in other transi- national media attention.5 Some deemed tional and developing countries. Though 2010 a turning point in the Chinese labor China’s workers are politically constrained movement, the point when individual- by the party-state’s ban on independent ized, mostly spontaneous, mostly atom- unions, the relative weakness of the acftu ized action began to crystallize and congeal in controlling workers and the local state’s into a collective movement. Young migrant fear of the impact of protests on social workers began to focus on structural and stability (coupled with tight labor mar- systemic issues such as wage gaps between kets) also translate into signi½cant space different classes of workers and the lack for spontaneous and loosely organized of effective representation by the All-China worker mobilization. In many recently Federation of Trade Unions (acftu), the democratized states, newly powerful only legal trade union operating in the unions are constrained by their new links

82 Dædalus, the Journal ofthe American Academy of Arts & Sciences to political competition and political par- of half-hearted adoption of “legality”– Mary E. ties.9 The political incorporation of labor bottom-up legal mobilization by aggrieved Gallagher in new democracies can lead to improve- workers disappointed in the gap between ments in working conditions and wages, law on the books and law in action–and but the process of incorporation can also reactive party and state intervention and moderate workers’ demands or supersede settlement of labor conflict. While ulti- their speci½c demands for broader political mately unstable and dysfunctional, there agendas. Moreover, democratic regimes is a logical connection among these phe- seem to do a better job at institutionaliz- nomena. China’s labor law regime, de- ing labor grievances.10 China, like other ½ned by “high standards, low enforce- authoritarian regimes, has dif½culty ment,” is symptomatic of the state’s am - committing to the institutionalization of bivalent embrace of law as an instrument social conflict because it heightens the of governance (an issue explored in greater possibility of social empowerment. The detail in Benjamin Liebman’s essay in state remains in charge, which also means this volume). The gap between law and that labor-capital conflict almost invari- reality becomes a space utilized by workers ably metastasizes into a confrontation for social mobilization and by the state between workers and the state. for selective enforcement and discre- The increased mobilization and activism tionary settlement of labor grievances. of Chinese workers, the growing aware- Workers’ mobilization functions as a “½re ness of their legal rights, and their soli- alarm” regulatory system in which labor di½ed con½dence in pressing for those grievances and activism substitute for rights are all positive trends. They reflect state-initiated enforcement.11 the winding down of China’s development Since 2008, the year of both a more pro- model that began with the unleashing of tective Chinese labor law and a global eco - rural migrant labor twenty years earlier. nomic crisis, workers’ mobilization has These trends also reflect the government’s outpaced the legal system’s ability to man- success in transitioning its labor system age it. At the point of resolution, power from the planned economy “iron rice returns to the state through a system that bowl” to a mostly capitalistic labor market enlarges its discretion and expands its role that rewards high skills and education in private disputes at the expense of for- but provides much less in employment mal legal institutions. While weakening security or bene½ts to those lower down legal institutions, the system also creates the labor market ladder. Despite the for- strong incentives for extreme behavior midable political challenge of stripping on the part of disgruntled workers. Once urban socialist workers of their entitle- the state’s discretionary power becomes ments, the state managed to break its so - central to resolution, workers direct their cial contract with workers and reframe pressure onto the state for a favorable solu- workplace rights around individualized tion. Media attention and public opinion labor relations structured by a labor con- are critical; extreme behavior, including tract system and a growing body of labor other-directed and self-inflicted violence, and employment law. is key. However, the growing activism and These factors in the labor realm are a energy of the Chinese labor movement microcosm of a more general dilemma of should be fundamentally worrying to the the Chinese state: how to raise standards Chinese government. The system that is and expectations so as to improve gover- currently in place is an unstable mixture nance and quality of life without losing

143 (2) Spring 2014 83 China’s control. The state’s fear of social autono- and legal institutions were at ½rst more Workers my, for either labor or capital, requires important in regulating the non-state Movement & the that it stay involved. While a major cause sectors, while administrative regulation End of of so cial instability in Chinese society is and policy held sway over the public sec- the Rapid- Growth Era labor-capital conflict, the manifestation tors. But over time, as the Chinese market of the conflict continues to place the state grew more integrated and state-owned en - front and center. As social scientist Cai terprise (soe) reform became more press- Yongshun recently remarked, “With mo- ing, the institutions of the new non-state nopoly of power, comes monopoly of re - sectors were extended into the old sec- sponsibility.”12 tors. From 1998 to 2001, when the public sectors were restructured and many small China’s current system, which relies on and medium public ½rms privatized, over both labor legality and state discretion, thirty million public sector workers lost has its roots in the 1990s transition from their jobs. The “iron rice bowl” institu- a dominant public sector employment tions of the previous system were dis- model to a more diversi½ed economy, with solved. Lifetime employment ended, many the state sector having shrunk and the social bene½ts of employment were re- private sector becoming more important duced or phased out, and rural migration in terms of employment. The turn to increased, creating new competition at labor law addressed two separate chal- the lower levels of the labor market. La- lenges of the early reform period: 1) how bor mobility also increased and bene½ted to (gradually) disenfranchise permanent those with the skills, education, or con- urban workers by eliminating the socialist nections to ½nd better employment.14 system of employment; and 2) how to While strikes and demonstrations protect and empower new workers in the among laid-off workers and pensioners new capitalistic sectors then growing in de - did occur during this period,15 the backlash velopment zones and coastal cities. These against restructuring was managed by new sectors eventually expanded to in clude the state through policies that gradually not only foreign-invested enterprises, increased the competition with and pres- but also domestic private enterprises and sure from the non-state sectors while also privatized collective and state ½rms. shielding older soe workers from the full China’s trajectory of reform differed in assault of marketization. Many informal fundamental ways from other reforming and formal policies were developed to socialist and post-socialist states. The criti- “treat old workers the old way, and new cal difference after 1989 was, of course, the workers the new way.”16 The gradual in - absence of political transition in China. troduction of labor contracts and labor While other post-socialist states addressed law and its application to different types of political and economic reforms at the workers at different times lessened re- same time, Chinese economic reforms af- sistance. The relatively quiescent reaction ter 1989 proceeded while political reforms to economic reform among socialist work- stagnated. In addition to this difference, ers in the 1990s was not unique to China, China’s sequencing of reforms allowed but was apparent in post-socialist re - an initial period of opening and expanding gimes as well.17 While the explanations the new foreign and private sectors, while for labor quiescence vary by country and only gradually instituting dif½cult reforms over time, one factor is the ability of the in the much more politically important “legacy union” of the socialist era to re - state and collective sectors.13 Labor law make itself in the post-socialist period, re -

84 Dædalus, the Journal ofthe American Academy of Arts & Sciences taining members and political influence.18 law set up standards for working hours, Mary E. While the Chinese Communist Party overtime, holiday pay, and other employee Gallagher (ccp) does not aspire to devolve more bene½ts. Minimum wage regulations were political power to the acftu or to allow also put into effect. The law set up the pro- the existence of independent unions, the cedures for labor disputes, which included experiences of other post-socialist regimes voluntary mediation, compulsory arbitra- indicate that legacy unions can survive po - tion via the Ministry of Labor’s labor ar- litical transitions intact. Even “opposition” bitration committees, and litigation in Chi - unions that were part of the movements nese courts if either side disagreed with that swept away Communist governments the arbitration ruling. in 1989 moved to embrace market re - The Labor Law had another important forms in the 1990s that were unfavorable aspiration: to cover the broad spectrum to workers.19 of Chinese “workers” outside of agricul- ture and select services who were previ- The 1994 Labor Law, the ½rst labor law ously not covered by law (for example, in the history of the People’s Republic of domestic workers). The Labor Law does China, was passed hurriedly after several not distinguish between workers based years of discussion following a spate of on place of residence or urban/rural citi- wildcat strikes in development zones in zenship (hukou), nor does it distinguish by China’s coastal cities. The law extended ½rm ownership. In this way, the law pro- many of the provisions of labor regulations claimed that its protections should be ex - that had originally been crafted to ½t the tended to China’s large and growing pop- new non-state sectors. The foundation of ulation of rural migrants who lived and the Labor Law is the labor contract sys- worked in Chinese cities and coastal de- tem, which de½nes legal employment in velopment zones though did not enjoy full China as the establishment of a labor permanent residency in those areas. These relationship via a written labor contract.20 aspirations, while important, were still far The signi½cance of this transition to from being realized. labor contracts cannot be overemphasized, The decade spanning 1994 to 2004 was especially if contrasted to the previous a period of massive transformation for system of lifetime employment. However, Chinese labor. The non-state sector de - the repercussions of the labor contract sys- veloped rapidly while the state sector tem were not immediate. Labor contracts shrank. Employment in state and collec- were gradually adopted by ½rms in the tive sectors fell by ½fty-nine million public sector, usually as the ½rm was re- between 1996 and 2002, the height of the structuring or being privatized. Only soe restructuring period.21 China’s ac- younger workers were immediately sub- cession to the World Trade Organization ject to the strictures of the contract system. in 2001 further solidi½ed its burgeoning The 1994 Labor Law was a law of aspi- role as the workshop of the world. Ex- ration. It set out many policy goals that ports as a proportion of gdp grew from 21 were at the time, and in some areas re- percent in 1994 to 34 percent by 2004.22 main, unreachable. Most important of For China’s workers, this period was also these is the establishment of a system of transformative: the framework of the 1994 social insurance that includes ½ve social Labor Law began to structure the aspira- insurance programs: pensions, medical tions of the rising new working classes in insurance, occupational injury, unem- China’s export zones, while also giving ployment, and maternity. In addition, the form to the post-socialist employment

143 (2) Spring 2014 85 China’s world of urban workers when soes be- to sign labor contracts with employees. Workers gan to restructure and privatize aggres- An increasing proportion of the urban Movement & the sively in the late 1990s and early 2000s. workforce was employed informally, End of However, it is also important to recognize without the protection of labor contracts the Rapid- Growth Era that segmentation between the urban and and without participation in social insur- rural working classes (one migratory and ance. In 2005, 35 percent of urban workers the other not) insulated the two groups were employed informally, while 90 per- from direct competition and conflict. cent of migrant workers worked without By 2002, state and collective employ- a labor contract.24 In addition to the ment in China had declined by 42.5 percent expansion of the informal labor market, from its mid-1990s numbers. Rural to ur- labor subcontracting also became a com- ban migration increased rapidly, from mon way for employers to hire workers nearly twenty-two million migrants to short term, with less pay and social insur- seventy-nine million by 2000. By the end ance than regular employees. By 2012, the of that decade, the rural migrant popula- acftu estimated that sixty million work- tion had grown to over 220 million peo- ers in China were employed via labor sub - ple.23 Wages also began to rise sig- contracting agencies.25 ni½cantly for rural migrants after a long Combined with a more general concern period of relatively slow increases. China’s about rising inequality–between urban entry into the World Trade Organization and rural residents, within urban areas, in 2001 had a signi½cant positive influ- and among regions–the Chinese state ence on investment, exports, and general began to adopt policies that sought to growth. These trends were reflected in ris- reverse these negative trends, build more ing incomes among workers and the ½rst inclusive and protective social welfare sustained evidence for labor shortages in institutions, and bridge the gap between coastal regions’ manufacturing sectors. urban and rural workers. Many new laws In addition to these positive trends, offered greater employment protections, however, there were many problems with including the Labor Contract Law of 2008, workplace conditions, with labor law im - which restricted use of short-term con- plementation and enforcement, and in tracts, clari½ed the punitive clauses for the rapid decline in employment security violations, and extended economic com- for urban workers following the restruc- pensation for terminated workers;26 and turing of the soe sector. While wages the Labor Dispute Mediation and Arbi- increased, abysmal workplace conditions tration Law of 2008, which simpli½ed and excessive overtime were typical in some of the procedures for labor dispute many export sectors, such as apparel, toys, settlement, extended the statute of limi- electronics, and household items. Work- tations for labor violations, and reduced place accidents and occupational disease fees. In 2003, Premier Wen Jiabao person- were prevalent. Rising wages coexisted ally initiated a campaign to combat wage with rampant wage arrears, especially in arrears among migrant workers, and the the construction sector. Stark gaps in so - government signaled its intention to sup- cial insurance coverage for migrant work - port migrant workers’ grievances by of- ers also meant that most workers did not ½cially recognizing migrants as members have any safety net if illness or disease of the working class.27 This increase in interrupted their ability to work. Finally, government support was seen in laws, as the non-state sector developed, many campaigns, and extended and more sym- employers disregarded the laws, failing pathetic media coverage of labor issues.28

86 Dædalus, the Journal ofthe American Academy of Arts & Sciences In 2004, China’s labor legislation moved action have increased, the state has strug- Mary E. from increasing labor flexibility and reduc- gled to maintain its labor system through Gallagher ing worker protections to increasing more direct management of social disputes employment security and increasing pro- and less reliance on formal legal institu- tections. This shift was motivated by a fear tions.29 of rising social instability that came not only from concrete problems, such as wage From the 1994 Labor Law to the more arrears, but also from a new sense of con - protective 2008 Labor Contract Law, ½dence and rising expectations among China’s embrace of labor legality was an China’s workers, especially rural migrants instrumental move with multiple goals. who ½nally began to bene½t from labor Despite the dif½culty in implementing shortages in manufacturing. Rising expec- the 1994 standards, the government moved tations and increased con½dence in claims to raise standards even further in 2008, against employers can be seen in the con- solidifying the “high standards, low tinued increase in labor disputes, which enforcement” model of Chinese labor law. have risen steadily since the 1990s and in- According to an Organisation for Eco- creased even more dramatically after the nomic Co-operation and Development 2008 Labor Contract Law went into effect (oecd) report on employment protection, (see Figure 1). It can also be seen in strike China in 2008 ranked second in employ- activity since 2011 (see Figure 2). While ment protection across ten major devel- strike data is not systematically available, oping economies (only Indonesia ranked clb ½gures show that in 2011, an average higher) and exceeded the oecd average of sixteen strikes per month occurred. That substantially.30 In protection against col- number in creased to thirty-two strikes per lective and individual dismissal, China out- month in 2012. In the ½rst four months of ranked all other countries in the oecd 2013, clb reports ½fty strikes per month on report, which includes all members of the average. oecd and several major developing In the context of weak local enforcement economies, including Brazil, Russia, India, of laws, the government has built a system and South Africa. In terms of labor pro- that uses mass mobilization from below tection, few countries have moved as ag- and direct state management from above gressively as China in recent years. in an attempt to regulate and control local The labor legislation of the last two de- of½cials and ½rms, both powerful new cades not only developed high, aspirational actors. This combination of mass mobi- standards for Chinese workplaces, but lization and state power is a substitute for also put into place a new system for the other types of reform that are too danger- resolution of labor disputes that moved ous politically, such as liberalization of the from more informal voluntary mediation, restrictions on freedom of association, or to arbitration via the local labor bureau, greater freedom and political space for civil and ½nally to litigation via the civil society actors (like labor ngos). The Chi - courts. While the previous system tended nese state is not interested in delegating to internalize the dispute within the en - power to other groups or social actors; terprise and the soe system, the new sys- however, it has encouraged the mobiliza- tem empowered workers and invited the tion of (mostly) individualized workers in state into the private dispute as a third- its bid to improve compliance with labor party actor. laws and reduce labor conflict. As work- In creating this system of labor dispute ers’ solidarity and capacity for collective resolution, the Chinese state provided an

143 (2) Spring 2014 87 China’s Figure 1 Workers Number of Strikes in China, February 2011–April 2013 Movement & the End of the Rapid- Growth Era

Source: China Labour Bulletin, 2013, http://www.clb.org.hk/en/.

Figure 2 Total Labor Disputes Handled in China, 2001–2012

Source: Department of Population and Employment Statistics of the State Statistics Bureau and the Department of Planning and Finance Ministry of Human Resources and Social Security, China Labor Statistical Yearbook 2012 (Beijing: China Statistics Press, 2012); see also labor statistical yearbooks of past years; and China Labour Net, 2012 Statistical Analysis of the National Labor Dispute Resolution Situation [2012 niandu quanguo laodongrenshizhengyi chuliqingkuang tongjishujufenxi], http://www.labournet.com.cn/ldzh/ckzl/t24.htm.

88 Dædalus, the Journal ofthe American Academy of Arts & Sciences opportunity for non-state actors to play a China’s reliance on individualized legal Mary E. role in the private enforcement of labor mobilization ful½lls the state’s goal to Gallagher law. While the state developed both mitigate some of the ill effects of the re - “police patrols” and “½re alarm” mecha- form era on employment security and nisms for labor regulation,31 the ½re- working conditions. Informal and formal alarm mechanisms have been far more barriers to collective mobilization remain, important in practice (just as Robert enhancing the regime’s stability and re - Weller, in his essay for this issue, ½nds to ducing the likelihood of a political chal- be the case for the state’s handling of reli- lenge from aggrieved workers. As Ben- gious dissent). Political scientists Mathew jamin Liebman points out, the state’s em- McCubbins and Thomas Schwartz de½ne phasis on populist legality has connections police patrol oversight mechanisms as to China’s revolutionary past.32 While “centralized, direct, and active.” They in - mass mobilization of the Maoist era is no volve direct government surveillance of longer possible or desirable, individual- ½rms to detect violations of labor law ized legal mobilization does play a critical compliance–the threat of which helps role in bottom-up implementation of laws reduce such violations. Fire-alarm mech- and regulations. As political scientists anisms, on the other hand, are less cen- Elizabeth Perry and Sebastian Heilmann tralized, active, and direct. They involve argue, mass mobilization has been much the creation of channels and mechanisms reduced in the reform era, but the ccp to mobilize individual and group actors retains many of its governing practices in society to alert the government of vio- from that era.33 While the legalistic as- lations by seeking redress of their speci½c pect of workers’ mobilization is new and grievances. In China’s regulatory frame- a product of the reform era’s emphasis on work for labor, even inspections by gov- law, the campaign of “legal dissemination” ernment agencies and the trade union are and the unleashing of populist grievances often the result of worker complaints. against powerful actors like ½rms and local While partly a consequence of weak local governments do have precedents in the government capacity to manage central- Maoist period.34 This type of mobilization ized and direct regulation, there are also may be effective in increasing the law’s important reasons for governments to responsiveness while limiting political prefer such methods. First, ½re-alarm over- challenges from organized interests. More- sight is particularistic. It tends to mobilize over, in the resolution stage, the state has social actors with more ef½cacy, better re- been careful to retain a signi½cant degree sources, or more motivation for resolu- of discretion and flexibility. This has par- tion. Second, it is more effective in expos- ticularly been the case since 2008, when ing egregious violators than a police patrol the dual force of the Labor Contract Law system, which is less targeted and more and the global ½nancial crisis hit Chinese sweeping. For a large, fragmented author- labor relations. itarian system, these characteristics are especially important. In the period after the passage of the This mode of popular mobilization 1994 Labor Law, labor dispute resolution should be seen as part of a continuum of moved toward greater formalization and Chinese Communist policy-making that adversarial settlement in the courts activates individuals (“the masses”) while through channels ranging from more in - maintaining strict control of collective ac- formal mediation to court litigation. Ar - tion and organization outside the ccp. bitration, the middle stage, is compulsory

143 (2) Spring 2014 89 China’s before litigation. Mediation is, by central local cadres. This hands-on approach to Workers law, voluntary but encouraged. Litigation labor conflict resolution involved intra- Movement & the is possible whenever one side of an arbi- government coordination to manage the End of tration suit does not agree with the arbi- two sides, encourage compromise, threat - the Rapid- 35 Growth Era trated judgment. This system was ½rst en extremists or leaders with repression, put into place in 1993, and initially the and buy off disputants whenever possible number of people using it was very low. in the hopes of an early, peaceful resolu- But as China’s labor legislation became tion. Sociologist Yang Su and legal scholar more complex and comprehensive, labor Xin He label this “street as courtroom”: a disputes through these channels increased. mode of government and judicial settle- Campaigns to increase labor law knowl- ment of the dispute that prioritizes quick edge and general legal awareness and to settlement and can often lead to compen- expand legal aid opportunities have also sation and resolution in favor of workers.38 contributed to widened use of these insti- For both individual disputants and large tutions. It is perhaps not completely sur- collective disputes, the state since 2008 prising, then, that with the passage of the has moved to intervene more directly to 2008 Labor Contract Law and the 2008 make up for the weak legal system’s in - Labor Dispute Mediation and Arbitration ability to enforce judgments, and for the Law, the number of labor disputes dou- lengthy time needed to resolve disputes bled in a single year. Civil courts were inun- via the multi-tiered process. Mediated dated with labor cases and local govern- cases now outnumber disputes going ments scrambled to keep pace. through formal arbitration and litigation, Even before the burst of disputes after covering 58 percent of all disputes in the 2008 Labor Contract Law, the Chinese 2012. Mediation is also decentralized and government under General Secretary Hu can be practiced at a number of different Jintao and Premier Wen Jiabao began to institutional levels and units. For the large- show signs of ambivalence toward the scale strikes and demonstrations that have adversarial, legalistic resolution of labor rocked Chinese development zones over disputes.36 With the immense increase in the past few years, the state’s central role labor conflict after 2008 and the increas- has been even more apparent. “Stability ing propensity for migrant workers to committees” have stepped into the fray, mobilize collectively, the government pur- shifting the dispute between workers and sued a dramatic increase in the number of employers by putting the state front and disputes to be settled via informal settle- center as the target of workers’ hopes and ment, often through mediation.37 The gov - demands. ernment’s strategy was designed to reduce The move to informal settlement and pressures on the courts and labor arbitra- state-directed settlement may be prob- tion committees, as well as to dampen lematic for the rule of law and the fledg- down labor conflict during a period of ling legal system since more and more dis - glob al economic instability. putes now bypass the recently created for- While individual disputes were increas- mal system in favor of direct management ingly processed through mediation at var- by state of½cials. The formal and informal ious levels, the government took a more restrictions on collective organization interventionist stance to handle collective outside the of½cial trade union, and the disputes, which were far more problematic sporadic repression of civil society actors– for local stability and were potentially including labor ngos, legal aid centers, threatening to the promotion chances of and law ½rms–prevent workers’ individual

90 Dædalus, the Journal ofthe American Academy of Arts & Sciences and spontaneous collective action from be seen in many post-socialist and devel- Mary E. gelling into anything long-term, program- oping economies. The acftu’s limited role Gallagher matic, or institutional.39 As Ching Kwan reflects the weakening of collective labor Lee, in her essay for this issue, shows of power against the state and against em - contemporary Chinese protest in general, ployers who are united in their desire to activists respond to the state’s involve- minimize the bargaining power of workers. ment with repertoires that emphasize mo - But unlike its counterparts in many other rality and use extreme behavior to better countries, the acftu enjoys a monopoly their chances of an advantageous settle- on representation and an important, albeit ment. Violence, other-directed and self- subordinate, role in the Chinese state’s inflicted, and other forms of extreme be- handling of labor issues. After declining in havior are critical both for heightening the 1990s, its membership has grown while pressure on the state to respond and for union density has de clined globally. While attracting media attention that will in - the acftu remains mostly ineffective at crease social support and sway public opin- the workplace, its pursuit of enhanced leg - ion.40 With the state’s overarching desire islative protection of workers has con- to maintain social stability, the potential tributed to the empowerment of workers, for instability becomes critical to the mo - serving as a symbol of the state’s legit- bilization and resolution process. China imization of workers’ mobilization. looks unstable from the outside because The institutionalization of labor conflict instability is built into the system. and its inherent risks to authoritarian re- gimes pose a second dilemma for China. Some observers of the current labor sit- As political scientists Graeme Robertson uation in China see a vicious circle of state and Emmanuel Teitelbaum have found, intervention and worker reaction.41 Given democratic regimes often do better in the government’s reluctance to create in- insulating labor conflict via institutional stitutions to manage the rising collective channels.44 Other researchers have found demands and expectations of workers that democratization tames labor by en - that are increasingly not bound by the legal veloping unions and activists into party minimums of the labor laws, China may politics and their crosscutting cleavages. be caught in an instability trap.42 Reforms Authoritarian regimes, fearful of the po - to the of½cial trade union, the acftu, tential externalities of autonomous la - have also failed to solve these problems.43 bor, seem to prefer ad hoc and reactive re - During strikes and protests, the trade sponses to spontaneous forms of worker union is either marginalized or ridiculed. action, such as wildcat strikes, traf½c block- In the case of the 2010 Honda strikes, the ades, and episodic violence. Like an old local district trade union not only failed general in a new war, the ccp ½ghts the to assist workers to negotiate collectively, specter of the Polish example: Solidarity, but union cadres took pictures of striking repressed in 1981, but politically victorious workers and got into a scuffle with of- in 1989. While post-revolutionary Solidari- fended workers. The dilemma of collective ty proceeded to pursue market reforms and representation has not been solved. undermine the power of labor, the politi- China’s labor dilemma in part reflects cal lesson of 1989 remains critical.45 This the broader global trend of labor’s decline. is particularly the case for the ccp, which Weakened labor movements and declin- managed to do what others could not: that ing union density are not only common- is, adopt liberalizing reforms and maintain place in the developed world, but can also political power.

143 (2) Spring 2014 91 China’s The true test of the state’s ability to will be more complex. Migrant workers Workers manage discontent directly, with limited should bene½t from reforms that allow Movement & the reliance on institutionalization and no tol- them to reside legally and permanently in End of erance for autonomous organization, will cities. These reforms, however, could also the Rapid- Growth Era be in the next period of Chinese develop- reduce segmentation in Chinese labor ment. As the new Chinese leadership has mar kets, intensifying competition be - already acknowledged, growth in the next tween migrants and protected urban work- period will be slower while the govern- ers and reducing employment discrimi- ment attempts to deal with the hangover nation of rural migrants. In the next period symptoms of rapid growth: inequality; of China’s development, we will continue air, land, and water pollution; and the to see conflict between aggrieved workers public’s lack of con½dence in the regula- and an activist state, but we are also likely tory system. With slower growth and po - to see new types of conflict between differ- tential important reforms to speed up ur- ent classes of workers, ½ghting for a piece banization, management of labor conflict of a smaller pie.

endnotes 1 For in-depth analysis of rural migrants and the hukou system, see Fei-ling Wang, Organizing through Division and Exclusion: China’s Hukou System (Stanford, Calif.: Stanford University Press, 2005); Dorothy Solinger, Contesting Citizenship in Urban China: Peasant Migrants, the State, and the Logic of the Market (Berkeley: University of California Press, 1999); K. W. Chan and L. Zhang, “The Hukou System and Rural-Urban Migration in China: Processes and Changes,” The China Quarterly 160 (1999): 818–855; K. W. Chan and W. Buckingham, “Is China Abol- ishing the Hukou System?” The China Quarterly 195 (2008): 582–605; and Wenfang Tang and Qing Yang, “The Chinese Urban Caste System in Transition,” The China Quarterly 196 (2008): 759–779. 2 Barry Naughton, Growing Out of the Plan: Chinese Economic Reform, 1978–1993 (Cambridge: Cambridge University Press, 1996). 3 Ching Kwan Lee, “From Organized Dependence to Disorganized Despotism: Changing Labour Regimes in Chinese Factories,” The China Quarterly 157 (1999): 44–71; Ching Kwan Lee, Against the Law: Labor Protests in China’s Rustbelt and Sunbelt (Berkeley: University of California Press, 2007); and Anita Chan, China’s Workers Under Assault: The Exploitation of Labor in a Globalizing Economy (Armonk, N.Y.: M.E. Sharpe, 2001). 4 Chris King-chi Chan and Elaine Sio-ieng Hui, “The Dynamics and Dilemma of Workplace Trade Union Reform in China: The Case of the Honda Workers’ Strike,” The Journal of Industrial Relations 54 (2012): 653–668; and Keith Bradsher, “A Labor Movement Stirs in China,” The New York Times, June 10, 2010. 5 David Barboza and Keith Bradsher, “In China, Labor Movement Enabled by Technology,” The New York Times, June 16, 2010; and Andrew Batson and Norihiko Shirouzu, “Chinese Workers Win Wave of Raises,” The Wall Street Journal, June 7, 2010. 6 Chan and Hui, “The Dynamics and Dilemma of Workplace Trade Union Reform in China”; Chris King-chi Chan, “Class or Citizenship? Debating Workplace Conflict in China,” The Journal of Contemporary Asia 42 (2012): 308–327; and Florian Butollo and Tobias Brink, “Challenging the Atomization of Discontent: Patterns of Migrant-Worker Protest in China During the Series of Strikes in 2010,” Critical Asian Studies 44 (2012): 419–440. 7 China Labour Bulletin, Unity is Strength: The Workers Movement in China, 2009–2011 (October 2011), http://www.clb.org.hk/en/½les/share/File/research_reports/unity_is_strength_web .pdf.

92 Dædalus, the Journal ofthe American Academy of Arts & Sciences 8 Mary Gallagher and Baohua Dong, “Legislating Harmony: Labor Law Reform in Contem- Mary E. porary China,” in From Iron Rice Bowl to Informalization: Markets, Workers, and the State in a Gallagher Changing China, ed. Sarosh Kuruvilla, Ching Kwan Lee, and Mary Gallagher (New York: Cornell University Press, 2011); and Mary E. Gallagher, “Changes in the World’s Workshop: The Demographic, Social, and Political Factors Behind China’s Labor Movement,” in Dragon vs. Eagle: The Chinese Economy and U.S.-China Relations, ed. Wei-Chiao Chung and Huizhong Zhou (Kalamazoo, Mich.: W.E. Upjohn Institute for Employment Research, 2012). 9 Emmanuel Teitelbaum, “Mobilizing Restraint: Economic Reform and the Politics of Industrial Protest in South Asia,” World Politics 62 (2010): 676–713. 10 Graeme Robertson and Emmanuel Teitelbaum, “Foreign Direct Investment, Regime Type, and Labor Protest in Developing Countries,” American Journal of Political Science 55 (2011): 665–677. 11 Mathew D. McCubbins and Thomas Schwartz, “Congressional Oversight Overlooked: Police Patrols versus Fire Alarms,” American Journal of Political Science 28 (1984): 165–179. 12 From Cai Yongshun’s comments at the Conference on Chinese Society and Public Safety, East China University of Political Science and Law, School of Public Administration, May 2013. 13 Mary E. Gallagher, Contagious Capitalism: Globalization and the Politics of Labor in China, (Princeton, N.J.: Princeton University Press, 2005). 14 Xin Meng, “Labor Market Outcomes and Reforms in China,” Journal of Economic Perspectives 26 (4) (2012): 75–102; and Fang Cai, Albert Park, and Yaohui Zhao, “The Chinese Labor Market in the Reform Era,” in China’s Great Economic Transformation, ed. Loren Brandt and Thomas Rawski (Cambridge and New York: Cambridge University Press, 2008). 15 William Hurst and Kevin J. O’Brien, “China’s Contentious Pensioners,” The China Quarterly 170 (2002); and William Hurst, The Chinese Worker after Socialism (Cambridge and New York: Cambridge University Press, 2009). 16 Mary E. Gallagher, “China’s Older Workers: Between Law and Policy, Between Laid-Off and Unemployed,” in Laid-Off Workers in a Workers’ State: Unemployment with Chinese Characteristics, ed. Tom Gold, William Hurst, Jaeyoun Won, and Qiang Li (New York: Palgrave McMillan, 2009). 17 Stephen Crowley, “Barriers to Collective Action: Steelworkers and Mutual Dependence in the Former Soviet Union,” World Politics 46 (1994): 589–615; Paul Kubicek, “Organized Labor in Postcommunist States: Will the Western Sun Set on It, Too?” Comparative Politics 32 (1999): 83–102; and David Ost, “The End of Postcommunism: Trade Unions in East Eu - rope’s Future,” East European Politics and Societies 23 (2009): 13–33. 18 Teri Caraway, Maria Cook, and Stephen Crowley, eds. Working through the Past: Labor and Authoritarian Legacies in Comparative Perspective (Ithaca, N.Y.: Cornell University Press, forth- coming); Paul Kubicek, Organized Labor in Postcommunist States (Pittsburgh, Pa.: University of Pittsburgh Press, 2004); and Teri Caraway, “Pathways of Dominance and Displacement: The Varying Fates of Legacy Unions in New Democracies,” World Politics 64 (2012): 278–305. 19 David Ost, “The Weakness of Strong Social Movements: Models of Unionism in the East European Context,” European Journal of Industrial Relations 8 (1) (2002): 33–51. 20Gordon White, “The Politics of Economic Reform in Chinese Industry: The Introduction of the Labour Contract System,” The China Quarterly 111 (1987): 365–389. 21 Ajit K. Ghose, “Employment in China: Recent Trends and Future Challenges,” Employment Strategy Working Paper (International Labor Organization, October 2005). 22 Mary E. Gallagher, John Giles, Albert Park, and Meiyan Wang, “China’s 2008 Labor Contract Law: Implementation and Consequences for Chinese Workers,” Human Relations (February 27, 2014).

143 (2) Spring 2014 93 China’s 23 Zai Liang, “Recent Migration Trends in China: Geographic and Demographic Aspects and Workers Development Implications,” prepared for presentation at UN Expert Group on New Trends Movement in Migration: Demographic Aspects, December 3, 2012. & the End of 24 Gallagher et al., “China’s 2008 Labor Contract Law.” the Rapid- 25 Growth Era Biqiang Wang, “Building a Fence: Labor Subcontracting,” Caijing, May 21, 2012. 26 The Labor Contract Law was revised in 2012 to restrict the expansion of labor subcontracting, which had expanded after 2008 in response to the law’s tighter restrictions on short-term contracts. 27 Tim Pringle, Trade Unions in China: The Challenge of Labour Unrest (Abingdon, U.K., and New York: Routledge, 2011). 28 Daniela Stockmann and Mary Gallagher, “Remote Control: How the Media Sustains Authori- tarian Rule in China,” Comparative Political Studies 44 (4) (2011). 29 Yang Su and Xin He, “Street as Courtroom: State Accommodation of Labor Protest in South China,” Law & Society Review 44 (1) (2010): 157–184; Feng Chen and Xin Xu, “‘Active Judici- ary’: Judicial Dismantling of Workers’ Collective Action in China,” The China Journal 67 (2012): 87–107; and Jieren Hu, “Grand Mediation in China,” Asian Survey 51 (2011): 1065– 1089. 30 Danielle Venn, “Legislation, Collective Bargaining and Enforcement: Updating the oecd Employment Protection Indicators,” oecd Social, Employment and Migration Working Papers, No. 89 (oecd Publishing, 2009), www.oecd.org/els/workingpapers. 31 McCubbins and Schwartz, “Congressional Oversight Overlooked.” 32 Benjamin Liebman, “A Return to Populist Legality? Historical Legacies and Legal Reform,” in Mao’s Invisible Hand, ed. Sebastian Heilmann and Elizabeth Perry (Cambridge, Mass.: Harvard University Press, 2011). 33 Heilmann and Perry, eds., Mao’s Invisible Hand. 34 Elizabeth J. Perry, “‘Sixty is the New Forty’ (Or is It?): Reflections on the Health of the Chinese Body Politic,” in The People’s Republic of China at 60: An International Assessment, ed. William C. Kirby (Cambridge, Mass.: Harvard University Press, 2011). 35 Virginia Harper-Ho, Labor Dispute Resolution in China: Implications for Labor Rights and Legal Reform (Berkeley: University of California Press, 2003). 36 Hualing Fu and Richard Cullen, “From Mediatory to Adjudicatory Justice: The Limits of Civil Justice Reform in China,” in Chinese Justice, ed. Margaret Woo and Mary Gallagher (Cambridge and New York: Cambridge University Press, 2011). 37 Mary E. Gallagher, “Mobilizing the Law in China: ‘Informed Disenchantment’ and the Development of Legal Consciousness,” Law and Society Review 40 (2006): 783–816; Gallagher, “Changes in the World’s Workshop”; and Carl Minzner, “China’s Turn Against Law,” Ameri- can Journal of Comparative Law 59 (2011). 38 Su and He, “Street as Courtroom”; and Chen and Xu, “‘Active Judiciary.’” 39 Butollo and Brink, “Challenging the Atomization of Discontent”; Joseph Y.S. Cheng, Kinglun Ngok, and Wenjia Zhuang, “The Survival and Development Space for China’s Labor ngos: Informal Politics and Its Uncertainty,” Asian Survey 50 (6) (2010): 1082–1106. 40Pun Ngai and Huilin Lu, “A Culture of Violence: The Labor Subcontracting System and Col- lective Action by Construction Workers in Post-Socialist China,” The China Journal 64 (2010): 144–158. 41 Baohua Dong, “Discussion on the Legislative Mindset Regarding Labor Subcontracting,” paper prepared for Prospects for the Implementation of the Revisions of the Labor Contract Law Conference, Shanghai University of Finance and Economics, April 28, 2013.

94 Dædalus, the Journal ofthe American Academy of Arts & Sciences 42 Benjamin Liebman, “China’s Law and Stability Paradox,” paper prepared for the conference Mary E. China’s Challenges: The Road Ahead, Center for the Study of Contemporary China, Uni- Gallagher versity of Pennsylvania, April 25–26, 2013. 43 Chan and Hui, “The Dynamics and Dilemma of Workplace Trade Union Reform in China.” 44 Robertson and Teitelbaum, “Foreign Direct Investment, Regime Type, and Labor Protest in Developing Countries.” 45 David Shambaugh, China’s Communist Party: Atrophy and Adaptation (Berkeley: University of California Press, 2008).

143 (2) Spring 2014 95 Legal Reform: China’s Law-Stability Paradox

Benjamin L. Liebman

Abstract: In the 1980s and 1990s, China devoted extensive resources to constructing a legal system, in part in the belief that legal institutions would enhance both stability and regime legitimacy. Why, then, did China’s leadership retreat from using law when faced with perceived increases in protests, citizen com- plaints, and social discontent in the 2000s? This law-stability paradox suggests that party-state leaders do not trust legal institutions to play primary roles in addressing many of the most complex issues resulting from China’s rapid social transformation. This signi½es a retreat not only from legal reform, but also from the rule-based model of authoritarian governance that has contributed much to the resilience of the Chinese system. The law-stability paradox also highlights the dif½culties facing efforts by China’s new leadership to reinvigorate legal reform.

Do robust legal institutions support or subvert efforts to maintain social stability in an authoritarian state? Over the past decade, this question has be - come central to discussions concerning legal re form in China. In the 1980s and 1990s, China devoted ex- BENJAMIN L. LIEBMAN is the tensive resources to constructing a legal system, in - Robert L. Lieff Professor of Law cluding training legal professionals, encouraging and the Director of the Center for greater use of the courts, and adopting new laws Chinese Legal Studies at Columbia designed to regulate and constrain state conduct. In Law School. His recent publications the 2000s, in contrast, the Chinese party-state’s fo- include “Leniency in Chinese Crim- cus shifted toward emphasizing resolution of dis- inal Law? Everyday Justice in He - putes outside the formal legal system, negotiated nan,” in the Berkeley Journal of Inter- national Law (forthcoming 2014); outcomes in the formal legal system, flexible appli- “Malpractice Mobs: Medical Dis- cation of rules and procedures, and greater over- pute Resolution in China,” in the sight of judges and other legal professionals.1 Columbia Law Review (2013); “A This essay focuses on what I refer to as China’s Return to Populist Legality? His- law-stability paradox. Having devoted extensive torical Legacies and Legal Reform,” resources to constructing a legal system in the 1980s in Mao’s Invisible Hand (edited by and 1990s, why did China’s leadership retreat from Sebastian Heilmann and Elizabeth Perry, 2011); and “Toward Compet- using law when faced with perceived increases in itive Supervision? The Media and protests, citizen complaints, and social discontent the Courts,” in The China Quarterly in the 2000s? China’s legal reforms have been (2011). designed in part to further stability. Yet party-state

© 2014 by Benjamin L. Liebman doi:10.1162/DAED_a_00275 96 leaders appear not to trust legal institu- The law-stability paradox also highlights Benjamin L. tions to play primary roles in addressing the dif½culties facing efforts to reinvigo- Liebman many of the most complex issues result- rate legal reform. Under the slogan “rule ing from China’s rapid social transforma- of law China,” newly appointed Commu- tion. The party-state has prioritized rapid nist Party General Secretary and President resolution of conflict over adherence to Xi Jinping has signaled a desire to enhance legal procedures. legal reform and force of½cial actors to In China, the term social instability is often obey legal norms. The Communist Party understood to refer speci½cally to inci- Central Committee’s “Resolution on Sev- dents of protest or social conflict. Yet the eral Important Issues on Comprehensively phrase has evolved to cover a much broad- Deepening Reform” (or simply, the Third er swath of activity and discourse, includ- Plenum resolution), issued in November ing online discussions of high-pro½le 2013, outlines some potentially important issues and any conduct that the party-state reforms to the legal system. Xi’s comments views as a potential threat to its authority and the resolution have brought cautious or legitimacy, including corruption, group optimism to many people working within litigation, and virtually any publicly dis- the Chinese legal system who have viewed cussed controversial topic. Social insta- policies of the past decade as an assault bility in China thus refers narrowly to acts on legal norms and the idea of rule-based of protest and broadly to conduct that governance. Yet other recent develop- party-state of½cials view as having the ments, including renewed emphasis on potential to create unrest or to challenge stability and detentions of legal activists, the party-state’s power. suggest that fundamental changes to of - Evidence from China suggests that top ½cial attitudes about the role law plays in leadership has in recent years perceived China are unlikely. The law-stability par- adherence to legal rules as a constraint on adox suggests that reform requires not efforts to maintain social stability.2 This only renewed commitment to the use of approach may be due to concerns that legal procedures and institutions, but also stronger legal institutions could threaten breaking the cycle of distrust that under- Communist Party control. But recent atti- mines the authority of legal institutions tudes toward law also reflect party-state and rethinking how the party-state con- efforts to maintain legitimacy by being re- ceives of its own legitimacy. sponsive to the public, as well as uncertain- ty about the utility of law in managing a Xi Jinping’s comments endorsing the period of rapid change. Law has become an concept of “rule of law China” and the re- important governance tool in China, but forms announced following the Third ad herence to legal procedures is not a Plenum in November 2013 have been wide- source of party-state legitimacy. Recog- ly viewed as efforts by Xi to mark a clean nizing China’s law-stability paradox chal- break from his predecessors, especially fol- lenges Western arguments regarding the lowing the fall of Bo Xilai, the former Com- role legal reforms have played in the con- munist Party Secretary of Chongqing struction of China’s form of authoritari- whose populist approach was seen by anism,3 suggesting a retreat not only from many as a direct assault on rule-based gov- legal reform but also from the rule-based ernance. Xi is not the ½rst Chinese leader to model of authoritarian governance that use the rhetoric of law to distinguish him- has contributed much to the resilience of self from his predecessors. Deng Xiaoping’s the Chinese system. embrace of legal reforms in the late 1970s

143 (2) Spring 2014 97 China’s and 1980s was in signi½cant part a reaction ernment of½cials played signi½cant roles Law- to the chaos and violence of the Cultural in influencing outcomes in court and in Stability Paradox Revolution. resolving disputes outside the formal China’s legal reforms initially focused on legal system, reflecting a continuation of creating a legal framework for economic revolutionary-era distrust of autonomous development.4 By the 1990s, the focus of institutions.6 Populism remained an im - new laws expanded to include a range of portant factor in shaping legal outcomes. other issues, from environmental protec- Legal rules were designed primarily to tion and women’s rights to administra- facilitate, not constrain, party-state policy, tive laws that facilitate challenges to state in particular economic development. Law action and regulate state conduct. The was not a mechanism for oversight over number of trained legal personnel also the party-state itself. expanded rapidly in the 1980s and 1990s, General Secretary Hu Jintao and Premier with the total number of lawyers increas- Wen Jiabao took power in 2003 against a ing from 3,000 in 1978 to more than backdrop of rising concerns about social 160,000 by the early 2000s. Professional- unrest and inequality. They initially ap- ization was explicitly encouraged: hun- peared to use law to signal a break from dreds of law schools and law departments the past. Legal scholars and lawyers seized opened; legal expertise developed within on a perceived new commitment to reform the National People’s Congress and other to call for greater enforcement of the con - law-drafting bodies; and beginning in stitution and a deepening of legal reform.7 2002, all new judges, procurators, and law- There were some modest successes for yers were required to hold university advocates of reform, most notably the 2003 degrees and pass a uni½ed national bar abolishment of the custody and repatria- exam.5 Signi½cant attention was devoted tion detention system for migrant work- to making the legal system accessible to ers following an outcry from the media ordinary people. In the late 1990s and and legal academics concerning abuses in early 2000s, China devoted resources to the system. The sars outbreak the same constructing a state-run legal aid system, year led to widespread calls for, and and for the ½rst time permitted the devel- apparent new state commitment to, in - opment of quasi-independent public inter- creased government transparency. China est law organizations. Debate about legal also amended its constitution in 2004 to issues also became common in the media add provisions protecting human rights in the 1990s, advancing popular knowledge and private property. of law. Despite this initial optimism, the 2003– Although reforms to the legal system in 2013 Hu–Wen era became known for its the 1980s and 1990s were impressive, abus- deemphasis on legal reform. In the ½rst es continued to be widespread. Many rights two decades of legal reform, embrace of set forth in the large volume of new laws law and rule-based governance was largely went unenforced. The Chinese party-state understood as enhancing the party-state’s continued to rely on political campaigns authority and legitimacy. In the Hu–Wen to address the most signi½cant problems period, in contrast, the Chinese leader- –including threats of instability–and to ship appeared to develop a more skeptical enforce new legal norms. Courts and proc- approach to law. The result was a decade urators remained under direct Communist of slowing legal reform and greater party Party oversight. Party political-legal com- oversight over the legal system, what legal mittees and individual party and gov - scholar Carl Minzner has called China’s

98 Dædalus, the Journal ofthe American Academy of Arts & Sciences “turn against law,” and what I have else- “grand mediation,” led by local party Benjamin L. where described as China’s “return to pop- leaders, with courts being one of many Liebman ulist legality.”8 actors at the table. Of½cials and judges New of½cial attitudes toward law in the serving as mediators often act as fact Hu–Wen era were manifest most clearly ½nders, pressuring parties and their fam- in the emphasis on maintaining social ilies to agree to settlements. stability and constructing a “harmonious Many judges view mediation as subvert- society.” Stability has been a key concern ing their proper role and adding to their throughout the reform era. In the 2000s, workload. Yet mediation also protects the however, stability attracted renewed courts. Mediated outcomes insulate courts attention as reports of protest and unrest from appellate review and prevent cases mounted. In the 1980s and 1990s, legal from being made public, reducing the pos- reforms were largely thought to promote sibility that judges will be held account- stability: it was better to have disgruntled able for incorrectly decided rulings. In citizens suing in court than protesting or some substantive areas, most notably burning down government of½ces. In the labor, heavy reliance on mediation outside 2000s, in contrast, of½cial sensitivity to the courts also reflects the courts’ lack of unrest resulted in deemphasis on legal capacity to handle a surge in disputes.11 procedures and the creation of incentives Mediation in the 2000s extended to ad - for local of½cials to maintain stability, ministrative cases (where it had previ- often at the expense of following legal ously been banned by the 1989 Adminis- norms. trative Litigation Law) and criminal cases. In the 2000s, courts came under pressure Equity concerns are particularly appar- to mediate the majority of civil cases. ent in criminal cases. Many defendants in Courts received explicit targets for mediat- minor criminal cases who agree to com- ing percentages of cases; mediation rates pensate their victims receive suspended in some jurisdictions exceeded 80 per- sentences. Those who do not pay com- cent.9 This trend marked a shift from the pensation, or are unable to do so, generally 1990s, when adjudicated outcomes had receive prison terms.12 In more serious become the norm in most cases decided cases, compensation payments by defen- by China’s courts. Of½cial encouragement dants or their families to victims can de - of mediation reflected the belief that termine whether defendants receive sus- mediated cases are less likely than adjudi- pended death sentences or life terms cated cases to result in escalation and rather than the death penalty. The em - unrest. Mediation also ½t well into of½cial phasis on compensation and negotiated policy of re-embracing revolutionary-era outcomes in criminal cases reflects re - concepts of “justice for the people” and source concerns and of½cial policy of the “Ma Xiwu adjudication method,” treating minor cases leniently.13 Yet the which emphasized resolving disputes encouragement of settlement and com- immediately, on the spot, and in line with pensation in criminal cases also mirrors popular views.10 state apprehension about escalation and High mediation rates lead to concerns protest. Ensuring victims are compensated that litigants are being coerced into agree- reduces the possibility of escalation or pro- ing to mediated outcomes and denied the test by victims; reducing sentences mini- opportunity to resolve cases in accor- mizes the risk of discontent from defen- dance with the law. In many contentious dants’ families. But whether negotiated disputes, mediation is handled through outcomes actually produce stability is

143 (2) Spring 2014 99 China’s unclear: criminal cases continue to be a plaints are also a sign of disconnect be - Law- primary source of complaints concerning tween popular use of law and the capacity Stability Paradox the courts, in particular from victims’ fam - of the legal system to respond. One com- ilies suspicious that defendants will avoid mon source of complaints, for example, is punishment through backroom deals. unenforced decisions. In some cases, Concerns about stability also affect however, lack of enforcement results from how judges interpret and apply the law in the inability of a defendant to pay, not cases that are resolved through adjudica- from inaction by the courts. Likewise, in tion. In tort cases, most notably medical contentious cases, most notably land dis- disputes, it is routine for judges to adjust putes, petitions and protests often result outcomes to ensure that aggrieved liti- from the fact that courts lack suf½cient gants receive compensation, even when authority to act. there is no formal legal basis for doing so. Courts take extreme steps to eliminate Judges adopt flexible interpretations of complaints. One response has been greater law in order to ensure that aggrieved per- use of mediation, reflecting the view that sons receive compensation in a range of mediated cases are less likely to result in potentially contentious cases, most no - protest. But courts also maintain dedicated tably labor disputes and those involving funds that they use to persuade petitioners corporate dissolution and bankruptcy to stop petitioning, agree to reopen and (where layoffs are a risk).14 Courts in China rehear previously decided cases in re - are innovative, but innovation often serves sponse to complaints, and deploy staff to to insulate courts and judges from criti- Beijing to intercept and forcibly return cism, not increase court authority. home those who seek to ½le complaints Courts in the Hu–Wen era came under to authorities in the capital. Compensation extreme pressure to respond to and pre- and mediation agreements frequently vent protest. The volume of “litigation include promises by litigants not to peti- related” petitions and protests surged in tion. Adherence to legal rules is of sec- the late 1990s and early 2000s.15 “Letters ondary importance to eliminating the and visits of½ces” exist at all levels of the potential for unrest, with courts adjusting Chinese state to receive and process com- outcomes or pressuring defendants to pay plaints from citizens. Many other party additional sums to plaintiffs in already and state entities, including the courts, decided cases.16 Although of½cial statistics the media, and procuratorates, also have reported a dramatic drop in the volume their own letters and visits of½ces to han- of litigation-related petitions ½led in the dle complaints. Thus “litigation related” latter half of the 2000s, judges report that petitions may be ½led with letters and vis- the pressure they face from petitioners its of½ces, with courts, or with letters and has not declined. visits of½ces at other party-state organi- Protest likewise influences cases that zations. Judges and courts are evaluated never make it to court. Concern about and ranked based on the number of com- unrest is a key factor influencing settle- plaints ½led. Complaints or protests about ment decisions in areas such as medical courts are viewed as evidence that judges malpractice litigation and labor disputes, have not handled the case correctly re - where defendants often agree to pay sig - gardless of the merits of the complaint. ni½cantly more than legally required in Petitions about the courts reflect prob- order to head off possible protest and vio - lems in the courts, including corruption lence.17 The threat of violence is real: re- and lack of competence. But such com- ports of aggrieved patients or their fami-

100 Dædalus, the Journal ofthe American Academy of Arts & Sciences lies attacking doctors have become com- tutions, including traditional and online Benjamin L. mon, as has the practice of family mem- media as well as collective protests. Liebman bers leaving the body of the deceased at Appeals to populism often mix with party the hospital (sometimes in the lobby) in efforts to assert oversight over the courts. protest while negotiations over compen- The blending of populism and party sation proceed. Specialized intermedi- oversight was captured most clearly in aries now exist in many locations to assist the promotion of the “three supremes” people seeking compensation outside the by former Supreme People’s Court Presi- formal legal system, with professional dent Wang Shengjun in 2008: the su- protestors congregating outside hospitals premacy of the party’s business, the and specialized debt collectors working supremacy of popular interests, and the in many areas.18 Of½cials have acted supremacy of the constitution and law. quickly to ensure that some of the most Courts in recent years have welcomed sensitive disputes, such as those arising out greater oversight by people’s congresses, of the Wenchuan earthquake, the Wen- have increased roles for laypeople in zhou high-speed rail accident, and the hearing cases, and have emphasized public melamine-contaminated milk scandal, opinion in court decisions. Such steps never make it to court. In all three cases, contrast with the modest efforts in the potential plaintiffs were encouraged or direction of greater professionalism in compelled to agree to quick settlements. the legal system in the 1990s. Courts have Courts have also refused to accept cases been encouraged to work together with on a wide range of issues linked to social other party and government entities to unrest, such as land disputes. Courts lack mitigate risks of instability.20 Judges and authority to accept many sensitive cases procurators are increasingly well trained, and refuse to accept such cases even but such training does not equip them to when they do have the authority. re sist populist pressure. Nor are they sup- Scholarship on protest in China, as posed to do so: judges are explicitly Ching Kwan Lee notes in her essay in this incentivized to take account of public issue, has identi½ed threats of escalation opinion. and group action as key determinants of a Of½cial embrace of populism and re - protest’s success. However, evidence from newed emphasis on Communist Party the legal system shows that courts are at oversight of the courts is at times explic- times responsive to individuals who pose itly linked to rejection of foreign models of little threat of collective action.19 The legal development. Legal education has incentives for local of½cials to stop even likewise become increasingly ideological individual petitioners suggest that exis- in recent years.21 Yet not all recent efforts tence of such grievances is perceived as a to emphasize links between the courts threat to the party-state’s legitimacy. and the public are efforts to assert greater State concerns about stability and le- party-state oversight. Courts have also gitimacy are also manifest in of½cial taken steps to educate ordinary people embrace of populism in the legal system about law. Some recent developments, and in calls for greater party supervision, such as court efforts to put opinions in part the result of the perception that online and to make courts more accessible courts are an important source of public to litigants in rural areas, also suggest that discontent. The term populism in the Chi- courts may be seeking to use appeals to nese legal system includes a broad range public opinion and populism to boost their of external factors that affect legal insti- own legitimacy.

143 (2) Spring 2014 101 China’s Outside the courts, a range of other tal cases resulted in signi½cant decreases Law- party-state institutions assumed active in the frequency of death sentences. If Stability Paradox roles in resolving contentious issues and fully implemented, revisions to the Crim- ordinary disputes in the early 2000s. Sta- inal Procedure Law have the potential to bility maintenance work has been coor- make the criminal justice process sig- dinated by the Central Commission on ni½cantly more fair for criminal defen- Comprehensive Social Management, a dants. The volume of civil cases in the joint party and government body that is courts also rose, from 4.8 million in 2003 equal in rank to, but formally exists as a to 7.2 million in 2011, with most of the separate entity from, the party’s Central increase coming in the latter portion of Political Legal Committee (plc). The the Hu–Wen decade.24 China now hosts Stability Maintenance Leadership Small the largest volume of copyright litigation Group also exists at the national level di - of any country in the world. Expanded rectly under the Standing Committee of public space for legal debate has also meant the Politburo; it appears to be focused on that most of the issues discussed above responding to speci½c incidents of unrest. are widely debated in China, especially Both entities have their work of½ces online. within the plc. This structure of multi- Legal developments in the 2000s nev- ple organizations working to address ertheless suggested that party-state leaders threats to stability is replicated at the were uncertain about the utility of legal provincial and municipal levels, although procedures and institutions as mecha- at the local level stability maintenance nisms for addressing perceived threats to of½ces are often combined with petition- stability. Having devoted impressive re - ing of½ces into “stability maintenance sources to constructing a legal system in centers.”22 The party-state has devoted the 1980s and 1990s, the Chinese party- extensive resources to stability mainte- state retreated from using the system in nance organizations. Local stability main - the face of new social problems in the tenance of½cials often have extensive roles, 2000s. Many within China have pointed including the power to intercept and de- out that such policies have produced a tain petitioners, pay petitioners to settle vicious circle. Incentives for of½cials en - grievances, and mediate disputes.23 These courage responsiveness to threats of roles reflect efforts to maintain stability at unrest. Responsiveness, in turn, encour- all costs, as well as unease with allowing ages others to pursue their grievance out- the legal system to take on the primary side the legal system, or to nao ting, or cause role in resolving threats to stability. chaos, in the courtroom. The emphasis Legal reform did not stop in the Hu– on stability has also encouraged new Wen era; important reforms continued forms of abuses, including the creation of throughout the period. Most involved “black jails,” privately run detention cen- the development of China’s legal hard- ters hired by local authorities to intercept ware: new laws and regulations designed and detain those who travel to Beijing to to regulate an increasingly complex soci- petition or protest.25 ety. Important examples include the pas- sage of new Property and Tort Laws and What are the sources of China’s law- major revisions to China’s Criminal Law, stability paradox? Four primary factors Criminal Procedure Law, and juvenile jus- have had particular influence. First, the tice system. Changes to the Criminal Law color revolutions in Eastern Europe and and to court review procedures for capi- Central Asia in the early 2000s and the

102 Dædalus, the Journal ofthe American Academy of Arts & Sciences Arab Spring of 2011 appeared to raise may have been less apparent in the 1990s Benjamin L. concerns at the top of the party-state that when the system embraced professional- Liebman legal reforms threatened its authority. ization, but they have always been present. The emergence of a dedicated group of Faced with a perception of increased “rights lawyers” willing to take on cases instability in the 2000s, China’s leaders that the party-state viewed as sensitive, reverted to using approaches to law and including representing Falun Gong ad - governance with which they were familiar. herents, political dissidents, and the vic- A short-term focus on reducing instability tims of mass disasters, may have height- ampli½ed the importance of such ap- ened such concerns. The arguments of proaches. rights lawyers almost always consist of Third, China’s law-stability paradox demands that of½cials follow the law, not reflects the party-state’s conception of its explicit calls for political change. Such own legitimacy. The central party-state has arguments were viewed by at least some linked its legitimacy to outcomes and has in the political-legal system as threats to perpetuated the idea of central of½cials party authority. Yet such trends have lim- being “father and mother of½cials” who ited explanatory power. Legal institutions are responsive to the grievances of ordi- in China remain under direct party-state nary people. In so doing, the party-state oversight and have shown little evidence has created a dynamic in which it be lieves of developing into “sites of resistance” to it must respond to complaints that threat- authoritarian rule.26 Little in the way of en to escalate into unrest, even when the credible threats to the party-state emerged response violates legal norms. The Chinese from the courts or legal profession. Argu- party-state is at times over-responsive to ments that legal reform and calls for judi- individual or group protest. Of½cial inter- cial independence represented foreign vention transforms private law disputes attempts to subvert the Chinese system such as tort or labor cases into negotia- appear largely to have been strategic ef - tions with the state. Of½cial intervention forts by conservatives seeking to slow the encourages others likewise to seek redress pace of reform and reassert party-state outside the legal system. Law in China over sight. operates in the shadow of protest, with le - Second, the most controversial trends in gal issues transformed into political ques- the legal system in the 2000s all had roots tions–the opposite of de Tocqueville’s in China’s revolutionary and prerevolu- observation about the United States that tionary past. Recent literature has noted “[s]carcely any political question arises . . . the ways in which China’s revolutionary that is not resolved, sooner or later, into a traditions have contributed to regime re - judicial question.”29 Strengthening the silience.27 The law-stability paradox is in role law plays in regulating Chinese soci- part the consequence of revolutionary ety and citizen-state interactions may traditions and shows that they may be require not only boosting legal institu- both a resource and a constraint. Pop- tions but altering the ways in which the ulism, lack of differentiation among legal party-state conceives of its own legitimacy, and nonlegal actors, the importance of shifting from a focus on results, respon- petitioning, reliance on political cam- siveness to individual grievances, and paigns, and the embrace of flexible inter- populism to legitimacy based on adher- pretations of law all reflect a continuation ence to legal procedures and norms. of traditional Communist Party approach- Fourth, of½cial reluctance to commit to es to governance and law.28 Such trends greater use of law reflects ambiguity about

143 (2) Spring 2014 103 China’s whether law is the best tool for managing There are indications that the state is Law- a society undergoing rapid and unprece- concerned about curbing some of the Stability Paradox dented social transformation. This is evi- worst abuses, in particular when they are dent both in the failure to follow laws on committed against ordinary people, not the books in complex or sensitive cases activists. In early 2013, numerous Chinese and in reliance on nonlegal institutions media accounts highlighted abusive illegal in a wide range of routine cases. Recent conduct by local of½cials or those em - literature on the Western ½nancial crisis ployed by them, including cases of forced has noted the ways in which excessive abortion, violent conduct by those en- reliance on formal rules can constrain forcing relocation and demolition orders actors in ways that deepen the crisis.30 on expropriated property, and horri½c China’s leadership may not have explicitly conditions in reeducation through labor embraced such reasoning; but elements detention facilities. More recently, in late of China’s approach to managing insta- 2013 and early 2014, reports circulated that bility, in particular the continued desire party of½cials were investigating former to be able to move rapidly and flexibly, Politburo Standing Committee member have parallels to those in the West who Zhou Yongkang, the person most closely argue that excessive reliance on legal rules associated with the stability-at-all-costs can at times worsen unstable situations. approach of the 2000s. Some view such Steps taken by China’s new leaders in developments as a sign that party-state 2013 suggest recognition of the need to leaders are serious about reducing abuses refocus the party-state on adherence to committed in the name of stability, and legal rules. Most notable among an- are committed to greater use of formal nounced reforms have been plans to legal institutions to address social conflict. abolish the widely condemned reeduca- Yet proposed reforms have come along- tion through labor detention system and side renewed focus on stability, reflected renewed efforts to rein in corruption. most clearly in the announced creation of The Third Plenum’s resolution in No - a new National Security Commission un - vember 2013 emphasized the importance der the direct leadership of Xi Jinping. of human rights, the constitution, and The exact structure and role of the com- judicial independence, suggesting a desire mission and its relationship to existing to reduce external influence on the courts. institutions remain unclear. It is clear, The resolution also called for reexamina- however, that the new commission reflects tion of the role of court adjudication com - continued and deepening commitment mittees,31 expansion of legal aid, greater to addressing perceived external and emphasis on transparency in the courts, internal threats to security and stability. elimination of the use of torture, ad- Proposed legal reforms are not likely to dressing and avoiding wrongful convic- have much signi½cance for individuals tions, and reducing the number of crimes the state views as threats.32 This has been subject to the death penalty. The resolution made apparent by the reemergence of provides only a general framework for re- party-state concerns that legal reforms form; nevertheless, it has been interpreted could be used to challenge its authority. by some within China as signaling renewed Reports have noted bans issued by party commitment to legal reform. There are of½cials on the discussion of topics such also serious efforts underway to implement as “judicial independence” and “consti- the revised Criminal Procedure Law, which tutionalism” in the media and in univer- went into effect on January 1, 2013. sities.33 A number of prominent legal

104 Dædalus, the Journal ofthe American Academy of Arts & Sciences activists were detained in the second half ties and undermining the authority of Benjamin L. of 2013, most notably legal scholar Xu legal institutions. Recognizing that legal Liebman Zhiyong, who was subsequently sentenced outcomes sometimes do not align with to four years in prison. This crackdown popular conceptions of justice may be on legal activists suggests that the bound- necessary to strengthening the authority aries of politically permissible activities of legal institutions and to reducing in - are shrinking even as party-state leaders stability. Yet bridging the divide between call for renewed focus on law. Xi Jinping new legal norms and popular views may has also reemphasized the role of Mass be hard, as evidenced by dif½culties in Line ideology, suggesting that fundamen- enforcing new provisions in the Criminal tal changes to the political-legal system Procedure Law. Initial evidence suggests are not likely. There are signs that some that signi½cant progress is being made in individuals who formerly would have implementing provisions that make it been sentenced to reeducation through easier for counsel to see their clients and labor are being detained through other access evidence.35 Such changes are rela- forms of arbitrary detention. Although tively easy to implement because they some of the announced reforms have the require only changing state conduct. Yet potential to make the legal system more it appears that little progress has been effective and fair in a range of cases, the made in encouraging or compelling wit- party-state’s emphasis on “rule of law nesses to appear at trial, which is also re- China” is unlikely to bring fundamental quired by the new law.36 Enforcing such changes to the ways the party-state views provisions requires not only changing and uses law. “Rule of law China” will like- state behavior but also addressing tradi- ly continue to include the explicit embrace tional reluctance to become involved in of populism, rejection of Western models, legal disputes, in particular those in which and the reliance on a range of legal and witnesses do not have a stake. nonlegal actors to address social conflict. Deepening legal reform also requires breaking the cycles of public distrust that China’s law-stability paradox also high- undermine the authority of legal institu- lights the challenges facing any renewed tions. The party-state continues to rely on efforts at legal reform. The challenge for party institutions, not the courts, to han- any serious efforts to strengthen the role of dle the most pressing problems. Recent law in addressing social conflict is not only efforts to combat corruption, for example, to realign incentives so that local of½cials have continued to rely primarily on the follow legal rules; it is also to convince Communist Party’s Discipline Inspection those most likely to engage in acts of un - Commission (dic), a body that is not sub- rest or resistance that the legal system can ject to any legal oversight and that has ex - protect their interests. A growing body of tensive powers to investigate and detain literature provides empirical support for suspects. Reliance on such party institu- the popular perception that the legal sys- tions may reflect doubts about whether tem increasingly serves the interests of the the courts have the capacity to address elite.34 Greater emphasis on populism such problems. Such reliance reinforces alone is unlikely to change this perception. the secondary role played by legal actors. Tensions also remain between new le- Courts are trapped in a similar cycle of gal rules and popular conceptions of jus- popular distrust. Legal institutions often tice. Efforts to adjust law to align with appear weak, lacking the authority to de - popular views risk creating new inequali- cide contentious cases and unable to

143 (2) Spring 2014 105 China’s enforce decisions in disputes they do or post-Communist countries. Chinese le- Law- adjudicate. As a result, individuals fre- gal academics and legal professionals as - Stability Paradox quently seek recourse outside the legal sys- sess China’s legal development not with tem. Their success in doing so further reference to that of post-Communist undermines con½dence in legal institu- Russia or even Singapore, but to the legal tions. The lack of trust from party of½cials systems of the United States or Western and the public also means that legal insti- Europe–albeit often an over-idealized tutions are not given the authority to act form of Western legality. In some respects, in ways that might allow them to increase China’s legal reforms appear to have been public con½dence. relatively successful when compared to China’s new leaders face an environ- other middle-income countries or to post- ment in which legal reform is both easier Communist countries not tethered to the and more dif½cult than in the past. In - European Union. China has hundreds of vestment in legal infrastructure over the thousands of legal professionals and a past three decades has created the insti- system that was almost unimaginable at tutional capacity to resolve a widening the beginning of the reform era in 1978. range of disputes through the formal legal Yet metrics for evaluating legal develop- process, fostered constituencies pushing ment are often elusive and misleading.37 for reform from within the legal system, The number of laws, legal personnel, or and legitimized debate about legal issues. cases tells very little about the overall The Chinese system remains capable of fairness or effectiveness of the Chinese rapid change, in particular in the face of legal system. Assessing China’s legal sys- perceived crisis. At the same time, pop- tem is also dif½cult because such evalua- ulism has reemerged as an important fac- tions vary depending on whose interests tor in the legal system, the legal system is are prioritized: those of the state or those increasingly viewed as protecting the of ordinary people. Different legal systems interests of the elite, party-state leaders serve different functions, and such func- appear unable or unwilling to let the legal tions may change over time within the system handle the most contentious is - same country. Placing China’s legal de - sues, and there appears to be signi½cant velopment in comparative context high- uncertainty about the utility of auton - lights the fact that there is no single form omous legal institutions. Academic liter- of or path to legal development and that ature has long noted a question inherent in nonconvergence with Western models of efforts to construct authoritarian legality: legality may be as likely as convergence. how far can the legal system develop with- China’s recent experiences also highlight out challenging authoritarian rule? China dif½culties inherent in using law both to has largely avoided this question, in part legitimize the state and to constrain state due to the extensive state oversight of the action in an authoritarian state undergo- legal system. Any signi½cant efforts to re - ing rapid social transformation. start legal reform will make the question China’s law-stability paradox reflects central to discussions about the future of uncertainty about how best to respond to law in China. instability and the dif½culty of adapting In contrast to other ½elds surveyed in legal rules to a rapidly changing society. this volume such as environmental policy The paradox also reflects the challenge of or social policies, few working in the Chi- creating new legal rules and institutions nese legal system compare China’s system in a political system where legitimacy to that of other developing, authoritarian, continues to be based on populist respon-

106 Dædalus, the Journal ofthe American Academy of Arts & Sciences siveness and delivery of economic growth. changing not only how the Chinese party- Benjamin L. Shifting to a system in which legitimacy state conceives of the relationship be- Liebman is based on adherence to legal rules, not tween law and stability, but also how it just rhetorical commitment to such rules, con ceives of its own role in managing may be necessary for resolving the law- China’s social transformation. stability paradox. Doing so may require

endnotes Author’s Note: I explore many of the issues discussed in this essay in more detail in Benjamin L. Liebman, “China’s Law and Stability Paradox,” in China’s Challenges: The Road Ahead, ed. Jacques deLisle and Avery Goldstein (forthcoming 2014). 1 Carl Minzner, “China’s Turn Against Law,” American Journal of Comparative Law 59 (2011): 935–984; Donald Clarke, “Jiang Ping: China’s Rule of Law is in Full Retreat,” China Law Prof Blog, March 2, 2010, http://lawprofessors.typepad.com/china_law_prof_blog/2010/03/ jiang-ping-chinas-rule-of-law-is-in-full-retreat.html; and Benjamin L. Liebman, “A Return to Populist Legality? Historical Legacies and Legal Reform,” in Mao’s Invisible Hand, ed. Sebastian Heilmann and Elizabeth J. Perry (Cambridge, Mass.: Harvard University Press, 2011), 269–313. 2 Whether China has actually become less stable is contested. It is clear, however, that China’s leadership during the 2000s became increasingly concerned with a perceived rise in instability. 3 Andrew J. Nathan, “Authoritarian Resilience,” Journal of Democracy 14 (2003): 6–17. 4 See my overview of this era in Liebman, “A Return to Populist Legality?” 5 For additional discussion, see Benjamin L. Liebman, “China’s Courts: Restricted Reforms,” The China Quarterly 191 (September 2007): 620–638. 6 Chen Xi, “China at the Tipping Point? The Rising Cost of Stability,” Journal of Democracy 24 (2013): 57–64. 7 Keith Hand, “Resolving Constitutional Disputes in Contemporary China,” University of Penn- sylvania East Asian Law Review 7 (2011): 50–159. 8 Minzner, “China’s Turn Against Law”; and Liebman, “A Return to Populist Legality?” 9 Ibid. 10 Liebman, “A Return to Populist Legality?” 11 Mary Gallagher, “Changes in the World’s Workshop: The Demographic, Social, and Political Factors Behind China’s Labor Movement,” in Dragon vs. Eagle: The Chinese Economy and U.S.- China Relations, ed. Wei-Chiao Chung and Huizhong Zhou (Kalamazoo, Mich.: W.E. Upjohn Institute for Employment Research, 2012), 99–112. 12 Benjamin L. Liebman, “Leniency in Chinese Criminal Law? Everyday Justice in Henan,” Berkeley Journal of International Law (forthcoming 2014). 13 Susan Trevaskes, “The Shifting Sands of Punishment in China in the Era of ‘Harmonious So - ciety,’” Law & Policy 32 (3) (2010): 332–361. 14 For more on compensation in labor disputes, see Yang Su and He Xin, “Street as Courtroom: State Accommodation of Labor Protests in South China,” Law & Society Review 44 (1) (2010): 157–184. 15 Wang Ying, “Zhuanxingqi de zhongguo fayuan yu xinfang: shesu xinfang wenti shizheng yanjiu” [“Chinese Courts and Petitioning in a Time of Transition: Empirical Research into the Question of Litigation-related Petitioning”], Ph.D. dissertation, Qinghua University

143 (2) Spring 2014 107 China’s (2010); and Benjamin L. Liebman, “A Populist Threat to China’s Courts?” in Chinese Justice: Law- Civil Dispute Resolution in Contemporary China, ed. Margaret Y. K. Woo and Mary E. Gallagher Stability (Cambridge: Cambridge University Press, 2011), 269–313. Paradox 16 Liebman, “A Populist Threat to China’s Courts?”; and Benjamin L. Liebman, “Malpractice Mobs: Medical Dispute Resolution in China,” Columbia Law Review 113 (2013): 181–264. 17 Liebman, “Malpractice Mobs.” 18 Ibid.; and Xu Xin, “Falü shifou zhongyao–Laizi Hua’nan de yige minjian shouzhai anli” [“Is Law Important–A Case Study on Informal Debt Collection in Southern China”], Sociological Studies 1 (2004): 53–63. 19 One detailed study found that nearly half of all those who went to Beijing to complain about the courts in one northeast municipality received direct bene½ts from doing so, generally cash or in-kind payments from the local court. See Wang, “Zhuanxingqi de zhongguo fayuan yu xinfang.” 20 Xu Kai and Li Weiao, “The Machinery of Stability Preservation,” Caixin, June 6, 2011, trans- lated to English in Duihua, June 8, 2011, http://www.duihuahrjournal.org/2011/06/translation -machinery-of-stability.html; see also Benjamin L. Liebman, “China’s Law and Stability Par- adox,” in China’s Challenges: The Road Ahead, ed. Jacques deLisle and Avery Goldstein (forth- coming 2014). 21 Carl Minzner, “The Rise and Fall of Chinese Legal Education,” Fordham International Law Journal 36 (2) (2012): 335–396. 22 For more detail on such organizations, see Liebman, “China’s Law and Stability Paradox.” 23 Ibid.; and Xu and Li, “The Machinery of Stability Preservation.” 24 China Law Society, Law Yearbook of China (Beijing: China Law Yearbook Press, 2004–2012). 25 “Black Jail Industries,” Global Times, March 3, 2013, http://www.globaltimes.cn/content/ 765426.shtml. 26 Tamir Moustafa and Tom Ginsburg, Introduction to Rule by Law: The Politics of Courts in Au - thoritarian Regimes (Cambridge: Cambridge University Press, 2008), 1–2. 27 Heilmann and Perry, eds., Mao’s Invisible Hand. 28 Liebman, “A Return to Populist Legality.” 29 Alexis de Tocqueville, Democracy in America, vol. 1, ed. Phillips Bradley, trans. Henry Reeve (New York: Alfred A. Knopf, 1946), 280. 30 Katharina Pistor, “Towards a Legal Theory of Finance,” manuscript draft, 2012. 31 Court adjudication committees generally consist of senior judges and decide sensitive or dif½cult cases. The practice has been criticized due to the fact that it results in cases being decided by judges who did not participate in the trial. 32 Nor are reforms designed to reduce the role of populism in the legal system: the decision also calls for broadening channels for the “masses” to participate in the judiciary, although it does also say that such participation shall be “in an orderly manner,” suggesting perhaps that speci½c procedures should be created for such popular participation. 33 Raymond Li, “Seven Subjects Off Limits for Teaching, Chinese Universities Told,” South China Morning Post, May 11, 2013, http://www.scmp.com/news/china/article/1234453/dont-teach -freedom-press-or-communist-party-mistakes-chinese-academics; and Li Qi and William Wan, “China’s Constitution Debate Hits a Sensitive Nerve,” The Washington Post, June 3, 2013, http://www.washingtonpost.com/blogs/worldviews/wp/2013/06/03/chinas-constitution -debate-hits-a-sensitive-nerve/. 34 Mary E. Gallagher, “Mobilizing the Law in China: Informed Disenchantment and the Devel- opment of Legal Consciousness,” Law & Society Review 40 (4) (2006): 783–816; He Xin and

108 Dædalus, the Journal ofthe American Academy of Arts & Sciences Yang Su, “Do the ‘Haves’ Come Out Ahead in Shanghai Courts?” Journal of Empirical Legal Benjamin L. Studies 10 (1) (2013): 120–145; and Yuen Yuen Ang and Nan Jia, “Perverse Complementarity: Liebman Political Connections & Use of Courts among Private Firms in China,” The Journal of Politics (posted online May 2013), http://ssrn.com/abstract=2033230. 35 Li Tao, “Xin xingsufa shishi: lüshi huijian zeng 35%” [“Lawyer Visits Increased 35% after Implementation of the New Criminal Procedure Law”], Beijing Youth Net, March 18, 2013, http://bjyouth.ynet.com/3.1/1303/18/7892125.html; and Liang Shuang, “Xin xingsufa ‘song- bang’ lüshi huijian dangshiren mengzeng siwu bei” [“Lawyers See Visits Soar by Quadruple or Quintuple with New ‘Relaxed’ Criminal Procedure Law”], Wuhan Evening, March 13, 2013, http://www.hb.xinhuanet.com/2013-03/13/c_115004008.htm. 36 “Xin xingsufa shishi liangge yue: xin tiaozhan xin bianhua” [“Two Months After Imple- mentation of New Criminal Procedure Law: New Challenges, New Changes”], Renmin Gong’an bao, March 11, 2013, http://shzfzz.eastday.com/node2/zzb/shzfzz/jrgz/node1745/ u1ai284475.html; and Wang Jianjiao, “Tonghai fayuan fanying xin xingsufa shishizhong zai zhengren chuting zuozheng fangmian bubian caozuo” [“Inconveniences in the Implemen- tation of the New Criminal Procedure Law Reflected in the Experiences of Witnesses Testi- fying in Tonghai Courts”], March 25, 2013, http://www.thfy.gov.cn/show.asp?id=1166. 37 Kevin E. Davis, “What Can the Rule of Law Variable Tell Us about Rule of Law Reforms?” Michigan Journal of International Law 26 (2004): 142–161.

143 (2) Spring 2014 109 Internet Activism & the Party-State in China

Guobin Yang

Abstract: The history of Internet activism and Internet control in China is one of mutual adaptation between citizen activists and party authorities. The party-state initially reacted to Internet activism with alarm, but has since built a comprehensive approach combining repressive policing with gentler methods of social management. This approach has evolved in response to the diverse forms of and participants in Internet activism. But the adaptability of the Chinese Internet control regime does not mean that it will root out Internet activism. On the contrary, Internet activism will continue to grow and will itself adapt to the changing forms of control. Comparisons with Russia and the United States highlight how political economy, history, and everyday practice shape the forms of Internet activism and control.

Internet activism is one of the most important forms of citizen activism in China. It refers broadly to claims-making contentious activities associated with the use of the Internet; and its vitality in China derives from its diverse forms, ranging from oppo- sitional dissidence to cooperative community action. First appearing in the mid-1990s, when Internet penetration was still low, Internet activism has since gathered great momentum and currency. The GUOBIN YANG is Associate Pro- Chinese party-state initially reacted to it with alarm; fessor of Sociology and Commu- but over the years, the party-state has cultivated an nication in the Annenberg School approach that combines repressive policing with for Communication and the De- partment of Sociology at the Uni- gentler methods of social management. And far versity of Pennsylvania. His publi- from being static or monolithic, the Chinese Internet cations include The Power of the control system has evolved in response to changing Internet in China: Citizen Activism forms of Internet activism. Meanwhile, Internet ac- Online (2009), Re-Envisioning the tivism has itself evolved in response to the new Chinese Revolution: The Politics and forms of state control. The resilience and adapt- Poetics of Collective Memories in Re - ability of Internet activism have ensured that the form China (edited with Ching Kwan Lee, 2007), and China’s Red Guard movement will continue to grow despite state ef - Generation: Loyalty, Dissent, and forts to disrupt it. Nostalgia, 1966–1999 (forthcoming, This story of mutual adaptation is rooted in deep Columbia University Press). structural and institutional conditions. Internet ac -

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00276

110 tivism emerged as part of the “polyphony test because they do not trust of½cial ac - Guobin of conflict and contention” in reform-era counts of events, or because government Yang China.1 Its underlying causes are the con- authorities withhold information. Thus in ditions of social dislocation and polariza- a crucial sense, Internet protests are about tion, social injustices, and the rampant politics of transparency and accountability. abuse of power among government of - The sites of Internet incidents change ½cials. New communication technologies with the development of new technolo- provide a vehicle for Internet activism, gies. In the 1990s and early 2000s, inci- but the root causes of contention are dents took place in bulletin board systems structural and institutional more than (bbs); they next expanded to blogs; and technological. For this reason, the Chinese ½nally moved to microblogs such as Twit - leadership must contain Internet activism ter, the equivalent of which is known in in order to prevent it from aggrandizing China as Weibo. The most popular Twitter- the structural problems. But for the same like service in China is Sina Weibo. Since reason, government efforts to suppress its launch in August 2009, Sina Weibo has Internet activism–aimed as they are at become a favorite venue for both protest only expressions of discontent–would and chitchat. Its clipped 140-character be futile without resolving the deeper format and enormous social networks causes. This is the double bind facing the make it especially hospitable to a kind of Chinese regime, and it is in the hopes of muckraking citizen journalism that is as resolving this dilemma that the regime entertaining to the consumer public as it has in recent years modi½ed its methods is nettling to censorship-prone propa- of managing dissent.2 ganda of½cials. Chinese netizens have developed a rich In Chinese of½cial discourse, Internet mass culture of using humor, puns, and coded incidents (wangluo quntixing shijian) refer to language to express protest and evade large-scale protest activities that take ½ltering software. Harmonizing an online place online. Also called Internet incidents posting means censoring it. To be invited in academic discourse, these contentious to tea by the police means trouble. Grass- events take place when large numbers of mud horse is not an animal, but the homo- postings and responses on a social issue phone of a curse word. Furthermore, seem - begin to appear and circulate in major on - ingly apolitical issues–such as the sex line communities, blogs, and microblogs. diaries of a female blogger, a spoof video The messages typically mix text with dig- mocking a big-budget but unpopular ital photography and sometimes video. ½lm, or service blackout in online gaming The online expressions are often highly communities–could also trigger Internet emotional, with people showing either incidents. Although these issues attract great anger or playfulness depending on attention more for their entertaining the tragic or comic nature of the events. contents than politics, netizens invariably Mass media and international media cov- turn them into political discussion. In er some of the events, thereby magnifying 2009, an online community of the popular their impact. computer game World of Warcraft agitat- Although hundreds of Internet protests ed when its gaming service experienced a occur every year, the main issues focus on temporary blackout. A cryptic and ap - corruption, social injustices against vul- parently innocuous phrase–“Jia Junpeng, nerable persons, and abuse of power by your mother wants you to go home to government of½cials.3 Often, people pro - eat”–went viral in the gaming commu-

143 (2) Spring 2014 111 Internet nity, only subsequently to be appropriat- thoughts is that they monopolize the Activism ed by activists as a political slogan. When technology of disseminating information. & the Party-State an activist-blogger was later detained by Computer networks have changed this in China the police, his sympathizers sent postcards equation.”5 with the phrase to the police station, peti- China’s best-known dissidents and tioning for his release. human rights activists are all digitally There is a growing tendency for online savvy. Liu Di, known for her online ID protests to move offline and into the street. name Stainless Steel Mouse, published on - The environmental protests in Xiamen, line essays critical of the regime, for which Dalian, Shanghai, and Ningbo in the past she was imprisoned for over a year. Upon ½ve years all involved intense interactions release from prison, she wrote an essay between online mobilization and offline stressing the importance of dispersed on - protests. And the Southern Weekly protest line networks to the dissident community. in January 2013 is one example of how an The dissident qua Nobel Peace Laureate online protest incident can spill out into Liu Xiaobo launched many online peti- the street.4 In these ways, Internet activism tions focusing on human rights and de- both retains its own distinct features and mocracy before he was arrested and sen- merges into the larger trend of popular tenced in 2009. He described the Internet contention in contemporary China. as a “super-engine” that enabled him to communicate with the outside world Digital dissidents are among the most even while under house arrest.6 Ai Weiwei, subversive and radical activists in China. the ultimate media savvy artist-activist, While Internet incidents typically concern maintains a highly visible dissident stance issues that are permissible to the party- on Twitter, where he conducts his own state for some degree of discussion, dissi- campaigns and reports others’ with a style dents express direct political opposition cultivated to provoke authorities and and call for outright regime change. Dis- arouse his followers. sident blogs and microblogs are shut down Because of the Internet, political dissent by authorities, while individual dissidents has become more transnational and radi- are closely watched by the state and may cal. With little space for political opposi- be subject to detention and prosecution. tion inside China, dissidents reach over- Dissidents were some of the earliest seas to plead their cause and seek support adopters and remain among the most and visibility. Such visibility provides a savvy users of the Internet. In 1997, on the measure of protection, which may then eve of the eighth anniversary of the 1989 embolden dissidents to take more radical student protest movement, democracy stances inside China.7 The food safety activists launched what they claimed to activist Zhao Lianhai is a case in point. In be the ½rst “free magazine” to be edited September 2008, two days after his three- in mainland China and distributed by year-old son was diagnosed with kidney email. Its inaugural statement encour- stones due to the consumption of mel - aged readers to forward the e-magazine amine-tainted milk powder, Zhao wrote a to others, stressing the importance of the blog calling on families to organize and new technology for disseminating ideas: ½ght for justice. He soon thereafter “Free and shining ideas have always launched a campaign website; and after existed. It is a matter of whether they can the site was closed down, he took his pro - be disseminated. The reason why autocrats test to Twitter. His Twitter account at - could seal our ears and eyes and ½x our tracted many followers, including domes-

112 Dædalus, the Journal ofthe American Academy of Arts & Sciences tic human rights activists, exiled democ- mation disclosure. Beijing environmental Guobin racy activists, and journalists from around activist Chen Liwen’s dogged efforts, com- Yang the world. Partly in reaction to the re - bining legal action with online publicity pressive state responses he encountered, to push for information disclosure about and partly because of the moral support a solid waste incinerator project in Guang - he received on Twitter, Zhao resorted to zhou, is one such successful case.10 more radical language and action, be- Another popular activity on Weibo is coming engaged in more subversive public interest (gongyi) activism, such as so - issues such as petitioning for the release cial support and charity activities spon- of Liu Xiaobo. The transnationalization sored by ngos or individual activists. In of his campaign contributed to his radi- April 2011, the well-known journalist Deng calization and hastened its repression. Fei launched a “Free Lunch for Children” Zhao was arrested and, in November 2010, program by mobilizing his 1.4 million fol- sentenced to two-and-a-half years in pris- lowers on Sina Weibo. The program on for “disturbing social order.” gained widespread support and raised $4 million in eight months.11 Like digital dissidents, Chinese ngos Contributing to this wave of online and grassroots civic groups were early public interest activism is citizens’ grow- adopters of the Internet. But unlike them, ing distrust of of½cial charity organiza- ngos avoid oppositional politics in favor tions like the Chinese Red Cross Society, of a non-confrontational approach to which was thrown into a serious credibility advocacy and civic engagement. For them, crisis in 2011 because of its lack of trans- the Internet is a platform for organizing parency.12 On his Sina blog, Feng Yong - activities, networking, and publicity. feng, director of the environmental ngo A survey of 129 ngos that I conducted Nature University, argues that transparen- in 2003 found that 106 of them were con- cy is all important to ngos. He believes nected to the Internet and 69 had web- that microblogging is a perfect tool for sites. Because of their lack of resources, transparency and thus indispensable to small grassroots groups use the Internet ngo activism. In his own words, “If an more actively than resource-rich organi- ngo is transparent enough, its work must zations.8 This earlier, rudimentarily wired be microblogged and its microblog must ngo community became more thickly be a way of doing its work.”13 networked in the age of social media. A 2009 survey found wide adoption of Online communities are a common Web2.0 technologies among the 327 civil feature of contemporary Internet culture society organizations studied: over 84 worldwide. They exist in all types of net- percent of them use instant messaging; work services, from Twitter to Facebook 70 percent have uploaded video, audio, or to Chinese Weibo. Not all online commu- images online; 56 percent use online nities are civic, but those that do engage forums and bulletin boards; and 44 percent in civic activism may be called online use blogs.9 civic communities. Examples of such in- Microblogging is the new favorite plat- clude reading groups and ½lm and music form for ngo advocacy. Among the doz - fan clubs on douban.com, and the web- ens of ngos and ngo activists I follow sites of lgbt activists, hepatitis-B carriers, on Sina Weibo, environmental and charity migrant workers, and other marginalized ngos are the most active, using Weibo to groups. Unlike ngos, which are organized push aggressively for environmental infor - groups with a mission and a leadership

143 (2) Spring 2014 113 Internet structure, these communities are loose How does the Chinese party-state re - Activism networks of people with shared interests spond to the diverse forms of and partici- & the Party-State and identities. Activism within these com- pants in Internet activism? Censorship in in China munities is random and incidental, typi- China is not a static and monolithic system cally emerging from member interactions. aimed at complete control of the Inter- Like ngo advocacy, community activism net. On the contrary, the Chinese Internet is moderate and non-confrontational. censorship regime changes in response to Though most of these communities re - the evolving forms of Internet activism. main strictly online, they do sometimes This process is characterized by the ex - sprout out into the physical world as non- pansion of management institutions, the pro½t organizations or business entities. differentiation of targets of control, and Take, for example, the online community the innovation of management methods. aibai.com. In 1999, two gay men started The of½cial institutions of the censor- the website gaychinese.net, which quickly ship regime consist of party propaganda attracted users. The site later switched to departments and government agencies, as its current name of aibai.com, an acro - well as laws and regulations. The highest- nym referring to an original open letter level party agency charged to manage me - published online, “White Paper on Our dia is the Department of Propaganda. Love.” The website is today the most pop - Various ministries under the State Coun- ular lgbt portal in the Chinese-language cil regulate contents and services through world, and in 2006, it established a non- administrative regulations and licensing. pro½t organization in Beijing called Aibai Lower-level governments, meanwhile, Culture and Education Center, which may issue local regulations targeting their remains active. own constituencies. For example, in 2011, Gandan Xiangzhao (gdxz), an online several departments in the Beijing mu- com munity of hepatitis-B carriers, is an- nicipal government jointly issued a regu- other online activist community that lation requiring microblog service pro - spawned an af½liated ngo. Launched in viders in Beijing to verify personal iden- 2001 as a bbs forum, gdxz served as an ti½cation when a user attempts to register alternative social space for a marginalized an account. group. In 2003, forum members launched The strategy of mobilizing ngos and public campaigns and lawsuits concern- Internet content providers (icps) to curtail ing cases of job discrimination. The sup- the online information flow is one exam- port of forum members was instrumen- ple of adaptability in the regime’s Internet tal in a prominent case in Anhui, where a control efforts. This strategy is also con- young man with hepatitis-B won a lawsuit sistent with the regime’s tradition of rely- against the local government. This even- ing on “mass organizations” for policy im- tually led to new government policies plementation.15 The main ngo in this area prohibiting discrimination against hepa- is the Internet Society of China (isc). A na - titis-B carriers in job recruitment.14 The tional-level industrial association founded community’s websites have repeatedly in May 2001 by leading network access car- been shut down, yet each time gdxz has riers, Internet service providers (isps), and managed to reopen the site, which contin- research institutions, isc has thousands ues to thrive today. In 2006, a key mem- of subsidiary associations and societies at ber of the community started a nonpro½t the provincial, municipal, and county lev- organization to sustain the community’s els. These organizations concentrate their anti-discrimination movement. work on promoting self-regulation.

114 Dædalus, the Journal ofthe American Academy of Arts & Sciences The meaning of self-regulation differs online news, video and audio sharing web- Guobin by regulatory context.16 In China, the em- sites, online games, and blogs and micro - Yang phasis has been on self-regulation by the blogs. industries, and on Internet ½rms’ respon- At the same time, the authorities try to sibility to monitor and remove harmful differentiate targets and issues. One study information from their websites. Chi- has found that censorship is likely to tar- nese icps have long engaged in censor- get Internet postings that call for collective ship; in the 1990s and early 2000s, when action, but not postings that merely criti- bbs were the most popular forms of cize the government.20 The growing fre- online communities, most bbs forum quency of Internet incidents concerning managers were volunteers selected from corrupt of½cials, vulnerable individuals, regular Internet users. Today, major web and environmental protection indicates portals hire large teams of full-time edi- an increase in the number of incidents, as tors who use both ½ltering software and well as more government toleration of manual labor to monitor their websites. public discussion of these issues. To some In 2010, when I interviewed the manager extent, the Chinese leadership has ac- of a popular online community in Bei- knowledged the legitimacy of online pub- jing, she told me that the ½rm had a team lic opinion. Since July 2009, the Media of thirty editors monitoring the contents Opinion Monitoring Of½ce of People’s on its website. Sina Weibo censors its Daily Online has published quarterly re - postings routinely17–although, according ports on local governments’ capacity to to its own chief editor, “controlling con- respond to Internet mass incidents. The tent on Sina Weibo is a big headache,”18 website of the Xinhua News Agency has which explains the need to differentiate an active section on public opinion with targets and innovate methods. daily and weekly news releases of viral Internet postings on various types of so - Government authorities view Internet cial issues.21 protest as a threat to domestic social sta- Chinese authorities can be more or less bility, national security, and the credibility tolerant of Internet protests depending on of law enforcement authorities and gov- the particular issues brought into focus. ernment. Describing Internet mass inci- In contrast, digital dissidents are key tar- dents, one deputy chief of a provincial gets of censorship and repression. Such police department stressed their dramat- was the case in early 2011 when, following ically increasing numbers, complicated anonymous Internet calls for a Chinese and multiple types, enormous mobilizing “jasmine revolution,” police detained or power, penetration by domestic and for- arrested notable bloggers and human eign hostile forces, and serious damage to rights lawyers in an effort to preempt mo- stability.19 bilization.22 It is not surprising, then, that the areas Compared with dissident communities, and sites of regulation and control have ngos and online civic communities en - expanded. Initially, the main targets of joy considerable leeway. While hoping to regulation were electronic bbs and Inter- gain more public recognition, many online net cafes, with regulations for the admin- communities (such as in the lgbt com- istration of each promulgated in 2000 and munity) remain largely alternative spaces 2001, respectively. Today, content and ser - of social support and solidarity. ngos use vice regulation is all-encompassing, cov- social media to advocate public causes ering Internet cafés, bbs, text messaging, passionately, but rarely, if ever, do they

143 (2) Spring 2014 115 Internet challenge the regime in the process. They social responsibility among Internet ½rms Activism seek social change by working with, rath - and ethical conduct among Internet users. & the 23 Party-State er than against, the government. To achieve these goals, hidden methods in China are combined with public campaigns. Gov - Early government responses to Internet ernment-hired Internet commentators, activism were reactive, panicked, and often with the pejorative nickname of wumao heavy-handed; forced closure of well- (“50-cent party”–named for the sup- known websites and detention of digital posed state payout per successful post), activists were not uncommon. Yitahutu, are a hidden form of control. These com- a popular bbs forum based in Peking mentators are employees or volunteers University, was closed down in 2004, recruited by government agencies to par- while another well-known website, Yan- ticipate anonymously in online discussion nan Web, was closed in 2005. A 2004 Am - and publish views that either support state nesty International report lists the names agendas or help defuse anti-party senti- of ½fty-four people who were detained or ment. Since its introduction in 2005, this imprisoned for using the Internet in practice has been adopted widely by local China.24 governments.27 But in recent years, the emphasis has In addition to covert means of shaping shifted to methods of “administration” online public opinion, state and local gov- and soft control. The 2010 white paper ernments employ many overt practices. “The Internet in China” spells out the key Public campaigns, a distinct feature of elements of the new model, which is Chinese politics in the Maoist era, con- comprised of “laws and regulations, ad- tinue to be used in modi½ed forms.28 The ministrative supervision, self-regulation, anti-vulgarity “special action” launched in technical protection, public supervision January 2009 was a coordinated national and social education.”25 These methods campaign “to contain the wide spreading aim both to censor and to channel con- of vulgar contents online, further purify tent. In 2010, a local public security de - the cultural environment on the Internet, partment in Fujian province published a protect the healthy growth of the under- study about how it had innovated methods aged, and promote the healthy and orderly for social management. The report states: development of the Internet.”29 On the day of its launch, the China Internet Illegal The management of virtual society com- Information Reporting Center (ciirc)– bines damming with channeling, with more established in 2004 under the sponsor- emphasis on channeling. . . . The municipal ship of the Internet Society of China– public security bureau of Jian’ou set up an publicized the names of nineteen websites [I]nternet opinion and monitoring leader- allegedly containing “vulgar contents.” ship group and of½ce. . . . Instead of simply These websites included practically all the blocking, ½ltering and deleting postings leading commercial sites: Google, Baidu, involving police, they ½nd the people who Sina, Sohu, Tencent, Netease, Mop, and post the messages and explain to them the Tianya. The ciirc requested that these harms and bene½ts, so they will voluntarily 26 websites remove the offending contents, delete or modify their postings. and in response, by February 24, 2009, a The new model also aims to reduce the total of 2,962 websites had been closed.30 threat of Internet activism by enhancing Opening government accounts on pop- the online influence of of½cial media in- ular microblog platforms has been another stitutions, and by promoting corporate overt method of activism management.

116 Dædalus, the Journal ofthe American Academy of Arts & Sciences In September 2011, the Ministry of Public sent a clear warning to Chinese Internet Guobin Security held a national conference to users about the limits of online speech. Yang promote the use of microblogs by public security agencies. There were at that time Internet activism is not unique to China, more than four thousand of½cial micro- nor are government efforts to monitor blog accounts and ½ve thousand individual and contain it. Wherever the Internet has police of½cer accounts.31 One of½cer’s mi- developed, citizens embrace it for protest croblog account, registered as “A Legend- and resistance while state powers attempt ary Cyber-Policewoman” on Sina Weibo, to control it. Yet in different countries and had 2.1 million followers as of January 27, regions of the world, the speci½c forms of 2014. Employed by the Department of Internet activism and control vary. In the Public Security in Beijing, this cyber- United States, purely or primarily online policewoman posts regularly on all sorts protests have taken place before and re- of topics, from daily chitchat to advice on main a component of contemporary social network security to reports of weather movements. Examples include varieties and traf½c conditions. A photograph of of electronic civic disobedience ½rst ar- her in police uniform smiling at the view- ticulated by the Critical Art Ensemble, the er conveys the image of a friendly police various Indymedia projects that were born of½cer keeping watch, ready to offer help. with the Seattle wto protests in 1999, Reminiscent of, yet somewhat different and online signature petitions and cam- from, the soldier role model Lei Feng in paign websites such as the influential the Maoist era, the legendary cyber- MoveOn.org. policewoman on Weibo represents the A distinct feature of online activism in digital extension and creative reinvention the United States, however, is institution- of what Elizabeth Perry has called “a tra- alization. Since the radical protests of the dition of cultural governance.” This tra- 1960s, social movements in Western in - dition reaches deep into Chinese political dustrial nations have become institution- culture, from imperial Confucian rituals to alized, characterized by the bureaucrati- the Chinese Communist Party.32 zation of social movement organizations Since Xi Jinping became China’s Com- and the routinization, rather than the munist Party leader in November 2012, the radicalization, of claims-making activi- tradition of cultural governance has en - ties.35 Money, membership, and other re- joyed a resurgence. Called “more Maoist sources have become crucial to the sur- than reformer” by the Los Angeles Times,33 vival of bureaucratized organizations. The Xi has reportedly encouraged adopting Internet developed in the United States self-criticism as a means of curbing cor- alongside a ½rmly established civil socie- ruption.34 Similarly, Maoist practices ty, and use of new media technologies by have been extended to the management online activist organizations is therefore of the Internet. For example, during the embedded in a rich tradition of the oper- crackdown on “Internet rumors” in the ations of large membership-based non- summer of 2013, the popular blogger Xue pro½t organizations. And so we see that Manzi was detained on charges of soliciting like other social movement organiza- prostitution. He was then shown on na - tions or interest groups in the United tional television networks confessing his States, even an online organization like wrongdoing of spreading irresponsible in- MoveOn.org is membership-based. formation on his Sina Weibo account. Such Thus, more often than not, the Internet Cultural Revolution-style public shaming is treated merely as a new tool for carrying

143 (2) Spring 2014 117 Internet out routine activities (such as fundraising) on the verge of requiring all personal com- Activism for preexisting civic associations. Spon- puters sold in mainland China to have & the Party-State taneous and unorganized forms of online installed a ½ltering software called Green in China action of the kind known as Internet mass Dam-Youth Escort. Yet the protest was not incidents in China are not only uncom- the coordinated blackening of websites, mon, but may be viewed with suspicion. but took the form of spontaneous verbal For example, the unorganized but collec- protests in online communities in the tive efforts in 4Chan and Reddit online typical style of an Internet mass incident. communities to search for the Boston As my discussion of Chinese ngo ad - bombing suspects after April 15, 2013–a vocacy shows, civic organizing is on the kind of online collective action not unlike rise in China; but there are clear political the online exposure of corrupt govern- limits, and ngos tend to avoid radical, ment of½cials in China–was met with confrontational methods. The more or- public criticism and cries of vigilantism. ganized nature of Internet activism in Russia, on the other hand, does have its Russia is due partly to a more open political share of Internet mass incidents,36 rang- environment. In Russia, as in the United ing from Internal Affairs Directorate States, there are “opposition parties” that Major Aleksei Dymovsky’s 2009 YouTube can regularly organize activism and pro - whistleblowing on corrupt Russian law test, whereas the formation of indepen - enforcement of½cials and practices37 to the dent political parties in China is out of the 2012 music videos of the political protest question. group Pussy Riot. The pattern of infor- Another difference between Internet ac - mation dissemination in the Dymovsky tivism in China and that in Russia and the case is remarkably similar to events in United States centers on Internet plat- China, starting with the posting of a video, forms. Videos and animations are used for followed by a large number of online protest in China, but they are posted on viewers responding, before ½nally receiv- local Chinese platforms rather than on ing coverage from the mass media. YouTube, which like Twitter and Facebook, But otherwise, Internet activism in Rus- is blocked within China. The most popular sia is more organized than in China, and platforms for protest in China have always thus more closely resembles the U.S. been large online communities run by model. To protest against the allegedly commercial websites. Integrating news, “unfair” parliamentary and presidential blogs, microblogs, bbs forums, as well as elections of 2011 and 2012, activists and video sites, gaming, music, and literature, leaders of oppositional parties organized these communities are highly interactive an alternative online election to create a spaces. In this respect, Chinese online plat- representative body to push for funda- forms resemble the Russian blogosphere mental changes to the political system.38 more than the American. Interactive func- In a sopa (Stop Online Piracy Act)-style tions, such as the “friends list” on LiveJour- protest on August 1, 2013, one thousand nal, are just as common on Chinese blog seven hundred websites in Russia went sites. And China’s microblogging websites dark to protest a new anti-piracy law that allow users to post videos, images, and long enabled the Russian government to black - messages when they retweet or comment list Internet resources without issuing a on other users’ postings–functions not court order.39 China had its own sopa currently available on Twitter. moment in 2009, when the Ministry of Internet censorship as practiced in Chi - Industry and Information Technology was na, including ½ltering keywords, block-

118 Dædalus, the Journal ofthe American Academy of Arts & Sciences ing websites, and requiring online forums Like its Chinese counterpart, the Russian Guobin to monitor and censor postings, is not regime uses proactive methods to control Yang known in the United States or Russia. But information and boost its own political this does not suggest the total absence of messages. Russia reportedly started using surveillance or policing of protest activi- paid pro-government bloggers to guide ties in these countries. Sociologists have online information in 2005.43 This practice long studied the policing of protest in is reminiscent of the use of anonymous Western democracies. In the United States, Internet commentators (the 50-cent party) activists’ reports and scholarly research to guide online public opinion in China, a have revealed aggressive and sophisticated practice that also began in 2005. surveillance of, for example, Occupy Wall Street (ows) activists by the nypd, and To a considerable extent, with respect to there were also instances of Twitter cen- Internet activism and control, the differ- soring the ows hashtag.40 While web- ences among China, the United States, and sites in Russia are generally not ½ltered or Russia can be explained by their different censored, Russian authorities do use law political economies. Russia is often con- to restrict illegal content, and they resort sidered a hybrid regime with a nominally to extralegal or covert practices to limit democratic system.44 It is therefore not information flow.41 surprising that Russia falls somewhere be - Beyond these crucial differences among tween China and the United States, with the three nations, there are some intriguing signi½cantly more political spaces for converging trends in state surveillance. So- activism than China. Although China is an ciologist Patrick Gillham has found that authoritarian state, its economy is capi- compared with protest policing in earlier talistic, a peculiar combination often des- pe riods, the policing during ows empha- ignated as state capitalism. For Internet sized the control of public spaces, high-tech activism and control, this means that al - surveillance, the management of informa- though the government seeks to suppress tion and intelligence about activists, and undesirable content, it cannot afford to the proactive shaping of the production of destroy its Internet economy by forbid- public information. These new features sig - ding people to talk online. For their part, nal the emergence of a new mode of pro- Internet ½rms, caught between govern- test policing that centers on the use of sur - ment censorship regulations and business veillance and intelligence to manage risks aspirations, promote their businesses by and incapacitate potential offenders. Signs creating mechanisms for encouraging of this approach also ap peared in the Chi- user interaction while gingerly walking the nese police crackdown on the abortive jas- censorship line. Some of the peculiar, in - mine revolution in February 2011, when teractive features of Chinese blog and mi - the censorship and surveillance of the In- croblog websites result from these nego- ternet tightened, and surveillance vehicles tiations. and police of½cers, armed with digital cam - Yet political economy cannot fully ex- eras and communication technologies, plain the speci½c features of Internet pol- showed up at the planned venues in Beijing itics. Equally important are the nations’ and Shanghai to forestall street protests. political cultures and histories, and the Analysts have also found the revival of everyday practices of regular Internet the use of Mao-style grassroots infor- users. Thus, the institutionalization of mants for collecting information about dis- Internet activism in the United States re- sidents and potential protest activities.42 flects the organized nature of American

143 (2) Spring 2014 119 Internet social movements in general. And how- forms or new inventions. Thus, when web- Activism ever much Russia and China may differ in sites began to offer electronic bbs, they & the Party-State their approaches to containing Internet naturally became a forum for users to air in China dissent and activism, they share one crucial grievances and to protest. For many In - similarity: a political tradition of media ternet users, these postings were like elec - control and a government “bent on cen - tronic versions of big-character wall post- tralization and rife with controlling ers, a time-tested form of public expres- impulses.”45 The method of using the sion in modern Chinese history. Internet to promote government messages The Chinese party-state continually in Russia and China derives from a shared modi½es its policies and methods of con- history of state propaganda. taining Internet activism. No longer trying The ways in which a new technology is to eradicate online protest, it has shifted used or contested depend on preexisting to managing and co-opting it, in the hopes conventions and current practices. The of channeling it to its own advantage. As formation of a Chinese-style Internet ac- scholars of Chinese politics have shown, tivism, including Internet mass incidents this regime adaptability is not new, but is and the penchant for using coded lan- part of a long history of political flexibil- guage, is shaped by both China’s political ity.46 Of course, China’s history of popular context and users’ practices and habits in protest is equally rich. And now this en - their daily production, circulation, and tangled history of mutual adaptation, of con sumption of online content. These continuity and change, is unfolding in the practices combine elements of existing digital realm. forms with creative adaptations of old

endnotes Author’s Note: I would like to thank Elizabeth Perry for providing editorial advice, and Emily Parker, Monroe Price, Florian Töpfl, and Patrick Gillham for sharing their insights on the Internet in Russia and the United States. 1 Elizabeth J. Perry and Mark Selden, eds., Chinese Society: Change, Conflict and Resistance, 2nd ed. (London: RoutledgeCurzon, 2003), 8. 2 On social management as a new model of governance in China, see Frank N. Pieke, “The Communist Party and Social Management in China,” China Information 26 (2) (2012): 149–165. 3 A recent study by scholars in China surveyed 248 Internet incidents in 2009 and 274 incidents in 2010. One-third of those in 2009 and half of those in 2010 concern social issues and law enforcement authorities. See Yu Guoming, ed., Annual Report on Public Opinion in China (in Chinese) (Beijing: People’s Daily Press, 2011), 17. 4 James Pomfret, “Southern Weekly Strike: Scuffles Flare at Protest over Censorship of Chi- nese Newspaper,” The Huf½ngton Post, January 8, 2013, http://www.huf½ngtonpost.com/ 2013/01/08/southern-weekly-strike-scuffles-protest_n_2429943.html (accessed April 26, 2013). 5 Guobin Yang, The Power of the Internet in China: Citizen Activism Online (New York: Columbia University Press, 2009), 201. 6 Ibid. 7 Hualing Fu and Richard Cullen, “Climbing the Weiquan Ladder: A Radicalizing Process for Rights Protection Lawyers,” The China Quarterly 205 (2011): 40–59.

120 Dædalus, the Journal ofthe American Academy of Arts & Sciences 8 Yang, The Power of the Internet in China, chap. 6. Guobin Yang 9 Song Shi, “The Use of Web2.0 Style Technologies among Chinese Civil Society Organiza- tions,” Telematics and Informatics 30 (4) (November 2013): 346–358, http://dx.doi.org/10.10 16/j.tele.2012.04.003. 10 Mandy Zuo, “Burning Question on Waste Disposal,” South China Morning Post, January 27, 2013, http://www.scmp.com/news/china/article/1136769/burning-question-waste-disposal (accessed April 30, 2013). 11 Louisa Lim, “For China’s ‘Left-Behind Kids,’ A Free Lunch,” National Public Radio, January 24, 2012, http://www.npr.org/2012/01/24/145521090/for-chinas-left-behind-kids-a-free-lunch (accessed April 29, 2013). 12 Haolan Hong and Jaime FlorCruz, “Red Cross China in Credibility Crisis,” ccn World, July 6, 2011, http://www.cnn.com/2011/WORLD/asiapcf/07/06/china.redcross/index.html (ac - cessed April 29, 2013). 13 Feng Yongfeng, “When Civic Organizations are Implanted the Gene of Microblogging” (in Chinese), April 22, 2013, http://blog.sina.com.cn/s/blog_6adcfa970101k9zr.html (accessed April 24, 2013). 14 Yang, The Power of the Internet in China, 6. 15 Taru Salmenkari, “Searching for a Chinese Civil Society Model,” China Information 22 (2008): 397–421. 16 Monroe Price and Stefaan Verhulst, “In Search of the Self: Charting the Course of Self-Regula- tion on the Internet in a Global Environment,” in Regulating the Global Information Society, ed. Christopher Marsden (London: Routledge, 2000). 17 Tao Zhu, David Phipps, Adam Pridgen, Jedidiah R. Crandall, and Dan S. Wallach, “The Velocity of Censorship: High-Fidelity Detection of Microblog Post Deletions,” 2013, http:// arxiv.org/abs/1303.0597 (accessed April 26, 2013). 18 “Sina Editor Reveals How Weibo Censors Content” (in Chinese), Radio France Interna- tionale (r½), June 13, 2010, http://www.chinese.r½.fr/%E4%B8%AD%E5%9B%BD/201006 13-%E6%96%B0%E6%B5%AA%E6%80%BB%E7%BC%96%E6%8A%AB%E9%9 C%B2%E8%AF%A5%E7%BD%91%E5%BE%AE%E5%8D%9A%E5%86%85%E5%AE%B9%E 7%9B%91%E6%8E%A7%E5%81%9A%E6%B3%95 (accessed April 2, 2013). 19 Huang Hong, “A Study of How to Respond to Abrupt Internet Incidents,” Gongan jiaoyu [Policing Education] 8 (2010): 8–13. 20Gary King, Jennifer Pan, and Margaret E. Roberts, “How Censorship in China Allows Gov- ernment Criticism but Silences Collective Expression,” American Political Science Review 107 (2) (2013): 1–18. 21 See http://www.news.cn/yuqing/ (in Chinese). 22 Tania Branigan, “Crackdown in China Spreads Terror among Dissidents,” The Guardian, March 31, 2011, http://www.guardian.co.uk/world/2011/mar/31/china-crackdown-on -activists-arrests-disappearances (accessed April 26, 2013). 23 Timothy Hildebrandt, Social Organizations and the Authoritarian State in China (Cambridge: Cambridge University Press, 2013). 24 Amnesty International, “People’s Republic of China: Controls Tighten as Internet Activism Grows,” January 2004, http://www.amnesty.org/en/library/info/ASA17/001/2004/en (ac - cessed February 4, 2008). 25 Information Of½ce of the State Council of the People’s Republic of China, “The Internet in China,” June 8, 2010, http://www.china.org.cn/government/whitepaper/node_7093508.htm (accessed April 26, 2013).

143 (2) Spring 2014 121 Internet 26 Fujian Public Security Department Investigation and Research Group for Nanping, “Inves- Activism tigation and Research Report on the Innovative Work of Social Management in the Public & the Security Bureau of Nanping City,” Journal of Fujian Police Academy 6 (2010): 5. Party-State in China 27 For example, in September 2011, a news release by a county-level department of population and family planning in Hubei province states that it utilizes seventeen Internet commenta- tors to monitor Internet information. See http://www.hbpop.gov.cn/hbegs/show.asp?id= 10939 (accessed April 29, 2013). 28 Elizabeth Perry, “From Mass Campaigns to Managed Campaigns: ‘Constructing a New Socialist Countryside,’” in Mao’s Invisible Hand: The Political Foundations of Adaptive Governance in China, ed. Sebastian Heilmann and Elizabeth J. Perry (Cambridge, Mass.: Harvard University Press, 2011), 30–61. 29 “The State Council Information Of½ce and Seven Other Ministries Launch Campaign against Internet Vulgarity” (in Chinese), January 5, 2009, http://news.xinhuanet.com/politics/2009 -01/05/content_10606040_1.htm (accessed May 27, 2012). 30 “Internet Campaign Action to Close Illegal Websites” (in Chinese), people.com.cn, May 24, 2009, http://news.sina.com.cn/c/2009-02-24/193617279700.shtml (accessed May 27, 2012). 31 “Police Urged to Boost Use of Micro Blog,” China Daily, September 27, 2012, http://www .china.org.cn/china/2011-09/27/content_23498523.htm (accessed April 22, 2012). 32 Elizabeth J. Perry, “Cultural Governance in Contemporary China: ‘Re-Orienting’ Party Propaganda,” Harvard-Yenching Institute Working Paper Series (Cambridge, Mass.: Har- vard-Yenching Institute, 2013). 33 Barbara Demick, “China’s Xi More Maoist than Reformer Thus Far,” Los Angeles Times, June 8, 2013. 34 Dexter Roberts, “Xi Jinping Is No Fun,” Business Week, October 3, 2013, http://www.business week.com/articles/2013-10-03/china-president-xi-jinping-revives-self-criticism-sessions-in -maoism-lite. 35 David S. Meyer and Sidney Tarrow, eds., The Social Movement Society: Contentious Politics for a New Century (Lanham, Md.: Rowman & Little½eld Publishers, 1998). 36 Bruce Etling, Karina Alexanyan, John Kelly, Robert Faris, John Palfrey, and Urs Gasser, “Pub- lic Discourse in the Russian Blogosphere: Mapping RuNet Politics and Mobilization,” Berk- man Center Research Publication No. 2010–11 (Cambridge, Mass.: Berkman Center for Internet & Society, 2010), http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1698344. 37 Florian Töpfl, “Managing Public Outrage: Power, Scandal, and New Media in Contemporary Russia,” New Media & Society 13 (8) (2011): 1301–1319. 38 Florian Töpfl, “The Making of Representative Claims: Internet Votes, Mass Media, and the Struggle for Power in Russia’s Hybrid Regime,” unpublished manuscript. 39 Max Smolaks, “1,700 Websites in Russia Go Dark in a sopa-Style Protest,” TechWeekEurope, August 2, 2013, http://www.techweekeurope.co.uk/news/1700-websites-in-russia-go-dark-in -a-sopa-style-protest-123686. 40 Joel Penney and Caroline Dadas, “(Re)Tweeting in the Service of Protest: Digital Composition and Circulation in the Occupy Wall Street Movement,” New Media & Society, published online March 15, 2013. 41 Ronald Deibert and Rafal Rohozinski, “Beyond Denial: Introducing Next-Generation Infor- mation Access Controls,” in Access Controlled: The Shaping of Power, Rights, and Rule in Cyberspace, ed. Ronald Deibert, John Palfrey, Rafal Rohozinski, and Jonathan Zittrain (Cambridge, Mass.: mit Press, 2010), 6. 42 Chongyi Feng, “Preserving Stability and Rights Protection: Conflict or Coherence?” Journal of Current Chinese Affairs 42 (2) (2013): 21–50.

122 Dædalus, the Journal ofthe American Academy of Arts & Sciences 43 Beth Knobel and Jonathan Sanders, “Samizdat 2.0: The Dymovsky Case and the Use of Guobin Streaming Video as a Political Tool in Contemporary Russia,” International Journal of E-Politics Yang 3 (1) (2012): 26–41. 44 Steven Levitsky and Lucan A. Way, Competitive Authoritarianism: Hybrid Regimes After the Cold War (Cambridge: Cambridge University Press, 2010). 45 Knobel and Sanders, “Samizdat 2.0.” 46 See Sebastian Heilmann and Elizabeth J. Perry, “Embracing Uncertainty: Guerrilla Policy Style and Adaptive Governance in China,” in Mao’s Invisible Hand, ed. Heilmann and Perry.

143 (2) Spring 2014 123 State & Social Protest

Ching Kwan Lee

Abstract: This essay sketches an array of cultural, political, and bureaucratic mechanisms that mediate the Chinese Communist state’s relationship with the major types of social protests, in the process exploring how governance and contention have transformed each other in the past six decades. In particular, it spotlights a noteworthy development in recent years: the increasingly salient market nexus between state and protest. While the regime response of making economic concessions to protesters is hardly unique in the context of China’s own past, the transition from top-down mandated concession to pervasive bargaining between the state and protesters is a signi½cant break with past patterns. The negotiability of cash and material rewards insinuates a market logic of governance that is made all the more poignant by the sin- gularly formidable ½scal and infrastructural capacities of the current Chinese regime among its author- itarian counterparts worldwide.

The history of Chinese protest registers a spec- trum of popular grievances and protesters that is as wide and diverse as that of any society. The period of the People’s Republic of China (prc) inherits and continues China’s millennia-long legacy of so - cial unrest, featuring tax rebellions, anti-corruption and exaction-relief petitions by peasants, market strikes by merchants, industrial strikes by workers, patriotic demonstrations by students and urban CHING KWAN LEE is Professor of citizens, religious and sectarian movements, and Sociology at the University of Cal- ethnic strife and rebellion. On top of these “tradi- ifornia, Los Angeles. Her research tional” modes of social unrest, the current era of focuses on labor, gender, political one-party rule under the Chinese Communist sociology, comparative and global ethnography, and global China. She Party has introduced contemporary varieties of has published articles in the Amer- protest stemming from the contour of its political ican Journal of Sociology, American and economic development. These include cycles of Sociological Review, Theory and Soci- political campaigns and mass mobilizations under ety, Work & Occupations, Gender & Mao, pro-democracy movements at the beginning Society, The China Quarterly, and of urban economic reform, and the more recent Modern China. She is author of “not in my backyard” environmental protests and Against the Law: Labor Protests in China’s Rustbelt and Sunbelt (2007) cyber protests in the age of globalization. and Gender and the South China Mir- The blurred boundary between Chinese state and acle: Two Worlds of Factory Women society is a common point of departure for under- (1998). standing the Chinese government’s management of

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00277 124 social protest. Rather than emphasizing gaining between the state and protesters Ching autonomy and antinomy, China scholars is a signi½cant break with past patterns. Kwan Lee have long underscored the dynamic in- The negotiability of cash and material re - teraction and mutual constitution of state wards insinuates a market logic of gover- and society relations from at least the late nance that is made all the more poignant Imperial era through the Republican and by the singularly formidable ½scal and in- Communist eras. Scholars have deployed frastructural capacities of the current lively metaphors to capture this state- Chinese regime among authoritarian society imbrication: a “cultural nexus of counterparts worldwide. An incipient power,” a “gray zone,” a “third realm,” and commodi½cation or monetization of the fluid “amalgam of wet and dry, color- state power and citizen rights will have less and colori½c as in the art of calligra- important implications for the durability phy.”1 These conceptions apply as much of authoritarianism in twenty-½rst-century to routine governance as to moments of China. unrest. Scholarship on the Chinese state and on social protest consistently points The distinctiveness of the Chinese expe- to a durable duality of state authoritarian- rience of social protest resides less in its ism and social contention. The insight, in form than in its dynamics. Rather than a nutshell, is that state domination and simply reacting to and managing protest social protest is not a zero-sum game in arising from social conflict, the Chinese which both sides are locked in a starkly state has consistently played a proactive antagonistic mode of “dominance versus role in endorsing–and even encouraging resistance.” and engineering–some types of protest. This essay sketches an array of cultural, Prominent China scholars have attributed political, and bureaucratic mechanisms this Chinese peculiarity to the lasting in - that mediate the Chinese Communist fluence of Confucian political ideology. state’s relationship with the major types of For instance, a central argument running social protests, in the process exploring through Elizabeth Perry’s seminal work how governance and contention have Challenging the Mandate of Heaven is that trans formed each other in the past six de - Chinese political cultural precepts–from cades. It is a story of how the state manages Mencius’s Mandate of Heaven to Sun Yat- protest, but also a story of how it inadver- sen’s Three Principles of the People to tently or sometimes intentionally creates Mao’s Mass Line–lend as much legiti- protest. This study also spotlights a note- macy to paternalistic state authoritarian- worthy development in recent years: the ism as to bottom-up rebellion reacting to increasingly salient market nexus between state failure to deliver benevolence.2 The state and protest. Market nexus refers to Chinese conception of “rights” distinctly the systematic and preponderant reliance privileges socioeconomic security and col- on the state bargaining with protesters lective livelihood, in contrast to the Anglo- using cash and material rewards, eclipsing American tradition that emphasizes po - without replacing other mechanisms of litical liberty and individual freedom.3 state-society engagement in moments of Therefore, throughout Chinese history, unrest. While the regime response of mak- moral economy protests–in which the ing economic concessions to protesters is aggrieved populace makes economic and hardly unique in the context of China’s welfare claims and postures as ½lial-loyal own past, the transition from top-town subjects to the government–have mostly mandated concession to pervasive bar- been met with accommodation and sym-

143 (2) Spring 2014 125 State & pathy rather than repression and hostility. driving force behind the strike waves in Social Protest is not necessarily a subversive 1956 and 1957, the so-called wind of econ- Protest force against the state, but an integral ele- omistic worker rebellion during the Cul- ment in the Chinese political imagination tural Revolution, and the strikes in 1974 and for both the rulers and the ruled. Inher- 1975. Another impetus for state-sponsored ent in the logic and schema of Chinese social contention has come from the Mao - authoritarian governance are the seeds ist Mass Line doctrine, which stipulated for contention and challenge against it. the involvement of the masses in gover- Chinese Communism under Mao con- nance. Examples abound: from the state tinued to profess an ideological commit- orchestrating peasants’ “speaking bitter- ment to guaranteeing the security of peo- ness” against former landlords in strug- ple’s livelihood in exchange for sub- gle meetings during the land reform; to servience and loyalty to the state. Aside Mao’s invitation of intellectual criticisms from making uncanny references to Con- against the Party during the Hundred fucian political values in Red Guard slo- Flowers Campaign; to his famous injunc- gans and in the training manuals for tion “to rebel is justi½ed,” aimed at fuel- Communist Party members, the Chinese ing Red Guard activism; to his endorse- Communist regime also institutionalized ment of the January 1967 seizure of power state provision of material security and by workers in Shanghai. Of course, lever- life chances to state industrial workers and aging this cultural logic of power and urban residents through the work unit sys- protest did not stop Mao from flexing the tem. Thanks to its unprecedented admin- state’s repressive muscles and ruthlessly istrative capacity to penetrate society, the crushing unrest when protests culminated Communist state, far more than its Impe- in regime-threatening chaos. rial or Republican predecessors, was able The Confucian cultural logic of con- to put into practice and formalize in con- tention also ½nds contemporary echoes in crete institution what sociologist Andrew the post-Mao period. Rural and urban pro- Walder has termed the “neo-traditional” testers often appeal to central government pattern of state-society authority relations. edicts as justi½cation for protest against It is predicated on a command economy local corruption and the failure to imple- that allows the state to centralize and re - ment central policies. In the longue durée of distribute resources. The Communist Par- Chinese political culture, post-Mao “right- ty’s vast and deep networks of cells and ac- ful resistance” by farmers against tax bur- tivists also functioned to cultivate patron- den or fraudulent village elections, and by clientelist loyalties and deference, and pre- workers against pension arrears, wage empt autonomously organized political default, managerial and cadre corruption, dissent.4 are only the latest manifestations of a core But Communist neo-traditionalism, just dynamic of state power and social protest. like the Confucian Mandate of Heaven, Commenting on the parallels between was a double-edged sword. Socialism cre- social protests in mid–Qing Dynasty and ated its own structure of inequality, and its today, sociologist Ho-fung Hung has ideology of state paternalism and equali- observed that “the Confucianist-familial tarianism inspired signi½cant protests in conception of political power motivated Mao’s time. Contract and temporary protesting subjects to appeal to higher workers, young apprentices, and non-state authorities against local of½cials in mid- sector workers–all deprived of the eco- Qing times. The salience of similar ap- nomic security others enjoyed–were the peals among today’s protesting citizens

126 Dædalus, the Journal ofthe American Academy of Arts & Sciences suggests that this conception of power of protesters to appeal to either local or Ching continues to prevail.”5 Moreover, in mid- central governments, and to use either Kwan Lee Qing, as in Mao’s China, the state was by peaceful or violent strategies, varied with and large tolerant of protest and willing the ebbs and flows of both the emperor’s to alleviate the subjects’ economic hard- moral legitimacy and the state’s ½scal ships, reprimanding wayward of½cials or and administrative capacity to dispense siding with weaker social groups in civil relief and justice. Compared to its Imperial disputes. But beyond certain limits, repres- predecessors, the Communist state’s im- sion, arrest, and punishment against pro- pressive increase in “infrastructural pow- testers were equally prevalent. er” (to use sociologist Michael Mann’s Newer elements in Chinese cultural memorable term) sheds particular light schema emerged in the era of “reform and on how the Communist political economy opening,” when the reform leadership let has generated its own peculiar dynamics, in international flows of goods, informa- at times conducive to unusually large tion, ideas, and practices, and as a result protests, but also proving exceptionally came under increasing pressure to adopt effective in containing them. Several and comply with international norms of institutional features of the Communist governance. As the pace of lawmaking polity have shaped the volume, direction, picked up and the state began to speak and capacity of social protests. First, con- the language of legal rights and citizenship, temporary protesters have continued to protesters lost no time in invoking and appeal to central authorities for protec- appropriating similar vocabulary in their tion against local malfeasance because the “rights activism.” But does discursive political economy of Communist China transformation and expansion portend retained the hierarchy and tensions among deeper recon½guration of political beliefs, various levels of the polity, or what polit- imaginations, and demands, moving away ical scientists have termed “fragmented from state paternalism and hierarchical authoritarianism” and “decentralized obedience and toward political rights and authoritarianism.”6 Second, the central- democratic governance? Existing ethno- ization of economic and political resources graphic evidence seems to suggest that a in the Communist state made it the peren- new discursive repertoire can coexist with nial target of social contention. Even in traditional cultural logic: workers’ “rights the reform era, the visible hand of the state talk” is compatible with a persistent em- as the creator and regulator of, and a player phasis on socioeconomic livelihood rights in, the market invites state-engaging pro - (over the liberal rights to free association), tests triggered by conflicts in the market and farmers continue to see rights as em- economy. Third, when the central govern- anating from the state, rather than as self- ment imposes national policies through- evident and naturally endowed. out the country, it inadvertently creates large numbers of similar grievances, or it Notwithstanding its longevity and tenac- creates unorganized interests whose un- ity, Confucian cultural hegemony does not coordinated mobilization may still gen- exhaust the mechanisms connecting state erate aggregate political pressure.7 Fourth, and social protest. To deliver material and the party-state’s organizational penetra- moral benevolence, the state must have tion into society is normally a powerful substantial ½scal capacity and a penetrat- tool of domination, but in moments of ing administrative presence in society. crisis, as during the 1989 Tiananmen dem- Even in the Qing dynasty, the propensity onstrations, of½cial unions and of½cial

143 (2) Spring 2014 127 State & student organizations could turn subver- tensely emotional bottom-up mobiliza- Social sive from within.8 tion. Protest Finally, although Communist political economy can be conducive to social Seemingly incongruous with its author- protests, it is equally effective at containing itarian outlook, the prc government has them. Bereft of democratic oversight and relied on a variety of legal and bureaucratic political competition, repression of pro- institutions to absorb and manage pro- testers by the Communist state has been tests. Functioning as the state’s frontline particularly ruthless, though selective. Yet tentacles and providing a structure of besides repression, there are other less engagement, these institutions, running direct (but equally insidious) ways of con- the gamut from mediation and arbitration taining protest. Government policies cre- to petition and litigation, incorporate cit- ate heterogeneous interests and internal izens into its machinery of rule. For of - tensions within society. Through policies ½cials, channeling conflicts into these that arbitrarily accord different rights and procedural games buys them time and or - entitlements to different groups of work- der, removing the physical and public dis- ers or farmers, for instance, the state has play of disharmony that can spark escala- very effectively erected social boundaries tion or contagion. For protesters, playing by and cleavages, fragmenting inter- and government-sponsored legal-bureaucratic intra-class or inter-regional solidarity rules offers one of the few institutional and creating winners and losers within a protections and leverages for their ac - particular social group. Over and over tivism in an authoritarian context, in ad - again, studies of micro-mobilization show dition to the chance of winning material how state policies have produced cellular and symbolic rewards. protests that have dif½culty transcending Among these institutions, the petition local or class boundaries.9 administration–or xinfang, literally letters One obvious difference between the and visits–is perhaps the preeminent politicized Maoist period and the eco- embodiment of the Chinese state’s simul- nomically focused post-Mao leadership taneous endorsement and containment of has been the current state’s reluctance to popular contention. With origins in Im - endorse, much less encourage, popular perial times and analogues in other Com- protests. Whereas Mao used mass protest munist countries, the petition system has and the rhetoric of class struggle as tools always been an essential component of to advance his party’s agenda, the post- the prc government, excepting a brief Mao regime has refrained from proactively rupture in the initial years of the Cultural instigating mass movements. Especially Revolution. Proclaiming the basic guiding after the bloody debacle of the 1989 upris- principle “to satisfy the proper or legiti- ings in Beijing and other major cities, both mate demands of the people,”10 petition state and society have become weary of bureaus accept complaints about mis- mass movements. The only exception may implementation of policies, of½cial cor- be the recurrent waves of nationalistic pro - ruption and malfeasance, problems with tests against Japan over territorial disputes economic livelihood, and public service and over textbook accounts of Japanese provision. Even though fewer than 0.2 wartime atrocities. Even there, the Chinese percent of petitions succeed in having government is ambivalent, ½nding itself their complaints addressed, ordinary cit- at pains to navigate a ½ne line between izens continue to ½le an annual average of restraining and encouraging such in - 11.5 million petitions, in the forms of in -

128 Dædalus, the Journal ofthe American Academy of Arts & Sciences dividual letters but also organized dem- have come up with their own strategy, also Ching onstrations, large-scale marches, and couched in military metaphors, of “½ght- Kwan Lee public speeches.11 For the Communist ing a simultaneous sea, land and air battle,” state, just as it did for the Ming and Qing meaning a mix of legal and extralegal emperors, the petition apparatus per- mobilization. State and protesters’ en- forms multiple governance functions: to gagement with the law as gamesmanship provide a flow of information about local does not necessarily produce a rule-of-law of½cials and social problems; to leverage political culture, but instead nurtures a popular pressure to monitor and disci- cynical and instrumental view of the pline of½cials; and to display the symbolic law.13 presence of central authorities as guaran- tors of righteousness. For the aggrieved Repression remains a central element in populace, not only is petitioning free of the Chinese state’s manual for dealing charge, it is also a politically safe means with protests that challenge or criticize of soliciting intervention and assistance its political and ideological monopoly. from higher-level governments. Petition- Human rights lawyers, intellectual dissi- ing is again a double-edged sword, and dents, leaders of ethnic strife, and religious recent state efforts to strengthen admin- activists are still subjected to constant istrative capacity while at the same time harassment, house arrest, abuse, and im- prohibiting mass petitions and capital prisonment in “black” or of½cial jails.14 appeals attest to the ½ne line the state must Massive crackdowns on cross-class and patrol.12 multicity mobilizations, such as the 1989 Besides revamping and reinforcing the pro-democracy demonstrations and the petition bureaucracy, the reform decades Falun Gong quasi-religious movement in have also ushered in an impressive 1999, stand out as exceptions to the more strengthening and professionalization of recent rule of “using force judiciously.” the judiciary, mediation, and arbitration As the numbers of mass incidents moti- systems. Absorbing protests by channel- vated by socioeconomic grievances grew ing them into the legal system has been over the reform period, the state came to aided by an energetic and rapidly ex - recognize that moderate levels of protest panding legal profession keenly interested are inevitable and that repression may in creating a market for its services. In or- provoke more violence, as shown in the dinary circumstances, the protracted and 2008 Weng’an incident in Guizhou. There arduous processes of arbitration and liti- are now clear stipulations limiting the use gation demobilize collective action by of arrest and coercive force against situa- consuming aggrieved citizens’ time, emo- tions of mob violence, assault on govern- tion, energy, and solidarity through end- ment buildings and property, and disrup- less rounds of red tape, paper chases, near- tion of public order. At least in the big interminable waiting, and appeals. In re - cities, police work emphasizes preempt- cent years, when these legal and paralegal ing protest through intensive surveillance bureaucracies have also been required to and human intelligence gathering. These contribute to stability preservation, techniques include partitioning jurisdic- of½cials have pursued a strategy of cross- tions into grids whose overall security is departmental “joint action,” arbitrarily in- assigned to of½cials as personal responsi- voking rules across different bureaucratic bility; recruiting a network of paid in - arenas to ½ght what they call “an integrated formants embedded in local communities; battle.” In response, aggrieved citizens and using closed circuit television cam-

143 (2) Spring 2014 129 State & eras, biometric technology, and satellite get for national defense.15 Besides cash Social location tracking on problematic individ- payment to people who stage public acts Protest uals, assisted by quasi-police forces hired of de½ance, buying stability takes the form by city governments or security companies of grassroots of½cials ½nding jobs for employed by local businesses. The explo- protest leaders, or paying for urgent serv- sion in the number of “mass online inci- ices and utilities (such as water supply, dents” also requires heavy investment in electricity, garbage collection, or the con- Internet policing, media and cyber cen- struction of a new school) when these be- sorship, and propaganda–virtual rather come the subject of disputes.16 than physical repression. Conceding to moral economy protesters is of course nothing new. But concession Since the early 2000s–in the wake of a and toleration from above is quite differ- rising tide of social protest related to labor ent from bargaining on the ground with plight, land seizures, property rights vio- protesters about conditions for acquies- lations, and environmental degradation– cence. And instead of the state making ad the Chinese state has openly announced hoc and arbitrary concessions, dishing out its concern about social instability. From cash payment or other material bene½ts the slogan of “constructing a harmonious in exchange for compliance has become a society” to instituting a new “social man- patterned and routinized response to pop - agement system,” stability preservation, ular unrest, summed up in a widely circu- or weiwen, now ranks with economic lated popular maxim: “Big disturbance big development as a top priority of the Chi- resolution, small disturbance small reso- nese state. While the tried and true meth- lution, no disturbance no resolution.” The ods of bureaucratic absorption, patron- grassroots state has turned into a market- clientelism, and selective repression are place where gamesmanship (or boyi, still deployed, there has also been a new meaning strategic game playing) between emphasis on pacifying protesters by bar- of½cials and citizens determines the price gaining with cash. This practice, which tag of stability. of½cials have called “buying peace with Routine stability maintenance work by money,” was initially adopted around grassroots of½cials who are dedicated to 2008. Beginning as an expedient way to the task has been codi½ed in handbooks ensure stability on the eve of the Beijing and detailed flow charts that categorize Olympics, when aggrieved citizens seized types of protests and specify a triage sys- that sensitive moment to stage a large tem linking them to the personal respon- number of social protests and petitions, sibility of particular of½cials in a particu- buying stability has since become a stan- lar locality. Jurisdictions with good records dard practice in the governance tool kit of in stability maintenance develop best prac- the Communist regime. Local govern- tice models that are then presented and ments around the country, especially at shared with other jurisdictions in cadre the lowest levels of township and street, training classes. Stability maintenance of- have set up “Integrated Security, Petition ½cials have developed effective skills to and Stability Maintenance Centers” with manage the process of protest bargain- the explicit mandate to handle conflicts ing, including emotion control, co-opting and disputes. “Stability maintenance protest leaders and fragmenting protest- funds” at every local government level now ers’ solidarity, tactfully using arrests to have budgets whose aggregate size has, in turn protest leaders into government col- recent years, reportedly exceeded the bud - laborators, and transforming protesters’

130 Dædalus, the Journal ofthe American Academy of Arts & Sciences “rights consciousness” based on the law ngos and other informal groups with Ching into pragmatic, realizable rights in line sensitive advocacy agendas (such as labor Kwan Lee with the government’s policies and regu- rights, human rights, political reform, or lations. Last but not least, like protesters religious freedom groups). Yet for many leveraging the specter of instability, others with a service orientation– grassroots of½cials also capitalize on including neighborhood civic groups, instability to augment their departmental hiv-aids health services, and those pro- and personal career interests. The exis- viding elderly care or migrant education tence of instability justi½es demands for and recreation–government contracts increased budgets for the departments for their services afford them much- and personnel working in stability main- needed ½nancial resources to run and sta- tenance. bilize their organizations, develop a pro- On the part of citizens who use road fessional staff, and facilitate longer-term blockages, sit-ins, and marches with ban- planning. From the perspective of the ners as bargaining chips, the process of Chinese state, incorporating ngos with a negotiation transforms their subjective cash nexus achieves the twin objectives of experience with state authoritarianism. commercializing and co-opting the rap- Grassroots of½cials bring a human and idly growing civil society, channeling their flexible face to an otherwise impersonal agendas and practices into state-endorsed and inflexible bureaucratic juggernaut. directions.18 And upon discovering the extent and lim- its of state power at various levels, pro- In post-socialist China–when state pa - testers also turn to negotiation as a pro - ternalism in the form of welfare and em- cess to adjust demands in pursuit of greater ployment security has been drastically bene½ts. Some come to realize that if their reduced, the use of force has become polit- grievance is caused by higher-level gov- ically undesirable, and ideological indoc- ernments, there is little wiggle room for trination has ceased being effective–the bargaining, while others learn how to exert Chinese government’s repertoire for the just the right amount of pressure on the quotidian management of popular unrest right departments to maximize results. now pivots on bargaining and buying sta- Citizens’ “rights consciousness” is very bility. This market-oriented strategy has much shaped by the transformative and so far preserved stability by depoliticizing malleable process of engagement with state-society confrontation, and by grant - of½cials. It is not, as is often assumed in ing aggrieved citizens a certain degree of the current China literature, a static state political leverage, in addition to the rela- of mind that is fully formed prior to tively expansive opportunities to obtain protests and to which protestors are com- material concessions and symbolic re - mitted from beginning to end.17 wards from the state. Thanks to the per- A similar market logic of absorbing vasive practices of bargaining, state dom- potential social challengers is applied to ination is experienced as non-zero-sum, the rapidly growing numbers of non- totalizing and transparent yet permissive governmental organizations. In Guang- of room for maneuvering. Material gain dong and Shanghai, the city governments has become the linchpin of subordination. buy social services, essentially outsourcing If patron-clientelism in Mao’s era was at to and establishing a commercial contract least partially buttressed by activists’ ideo- with grassroots ngos. Repression and logical subscription to Chinese Commu- harassment are still routinely inflicted on nism, today it is unabashedly materialistic.

143 (2) Spring 2014 131 State & However, the turn to the market as a tion of state violence. No matter how ex- Social mechanism of governance has uncertain pedient and effective protest bargaining Protest consequences. For all the short-term ef - may be in particular instances, a signi½cant fectiveness of commodifying governance, number of of½cials and citizens come out state authority and citizen rights are “½cti- of the process feeling disappointed or re - tious commodities,” to use economist Karl sentful. Polanyi’s term, because turning them Beyond China, other authoritarian states into commodities necessarily destroys have pursued similar strategies of frag- their essence and purpose.19 When state- menting opposition forces, making con- society bonds depend so heavily on the cessions and targeting transfers to disgrun- market-like exchange of compliance for tled communities, and strategically alter- bene½ts, there is no authority in authori- nating between carrots and sticks in man- tarianism, no noncontractual elements of aging dissent. In Egypt, de spite differences contract, and arguably no durability be- in overall economic strategy, state au - neath the façade of stability. A ½scal crisis, thoritarianism under Nasser, Sadat, and a recalcitrant and principled protest lead- Mubarak nurtured re ciprocal, moral-eco- ership, or any unexpected derailment of nomic relations with labor, and pursued a the bargaining process can provoke the combination of repression and conces- state’s repressive machinery, politicizing sion aimed at curbing incidents of labor state-society interaction. protests–with the apparent goal of pre- Even as they manage to defuse immi- serving the impression of regime legiti- nent instability, of½cials lament that their macy.20 Indonesia’s Suharto regime was authority often depends on making pay- notoriously deft in selectively tolerating ment. Grassroots of½cials are the ½rst to but fragmenting opposition forces, where- understand the pitfalls of what they call as Russia under Yeltsin’s and Putin’s com- “passive stability maintenance,” manag- petitive authoritarianism fostered regime- ing unrest but leaving intact its root causes supporting crowds and street demonstra- (such as weak enforcement of the law or tions.21 Yet China stands out among the lack of institutional representation and these autocratic regimes in its unrivaled resolution of class interests). The con- administrative penetration into society, stant shuffling of leading cadres across its deep ½scal reserves, as well as its disci- localities as they move up the bureaucratic plinary capacity over its own agents (party ladder means that the superiors of these members and state of½cials). In recent grassroots of½cials are interested only in years, civil service reforms in the direction short-term paci½cation. Using market of professionalization, rationalization of logic to maintain stability likely spawns cadre assessment, and enhancement of its persistent unrest, both because of its avoid- monitoring and incentive systems prom- ance of underlying problems and because ise to make the party and the state even of the opportunity it creates for joint cap- more powerful. These uncommon capaci- italization by protestors and basic-level ties mean that the Chinese party-state can of½cials. Protest bargaining does little to preserve stability with its multipronged mitigate citizens’ sense of injustice and repertoire of protest bargaining, bureau- violation. Even after obtaining compen- cratic absorption, and patron-clientelism sation, protesters are often embittered by more effectively and systematically than and indignant at the unequal playing ½eld its counterparts elsewhere. Yet these strat- on which bargaining takes place, and that egies also have a tendency to reproduce is always backed by the possible inflic- protests without resolving the underlying

132 Dædalus, the Journal ofthe American Academy of Arts & Sciences causes of popular discontents. A creeping to a deep-seated vulnerability that is re - Ching erosion of state authority may quietly de- vealed only when a ½scal crisis hits or when Kwan Lee velop be neath the visible surface of au - aggrieved citizens are no longer willing to thoritarian stability, subjecting the regime bargain away their rights.

endnotes 1 Vivienne Shue, “Rule as Repertory and the Compound Essence of Authority,” Modern China 34 (2008): 141–151. 2 Elizabeth J. Perry, Challenging the Mandate of Heaven: Social Protest and State Power in China (Armonk, N.Y.: M.E. Sharpe, 2002). 3 Elizabeth J. Perry, “Chinese Conceptions of ‘Rights’: From Mencius to Mao–and Now,” Per- spective on Politics 6 (2008): 37–50. 4 Andrew G. Walder, Communist Neo-Traditionalism: Work and Authority in China (Berkeley: University of California Press, 1986). 5 Ho-fung Hung, Protest with Chinese Characteristics: Demonstrations, Riots, and Petitions in the Mid-Qing Dynasty (New York: Columbia University Press, 2011), 196. 6 Kenneth G. Lieberthal and Michel Oksenberg, Policy Making in China: Leaders, Structures and Process (Princeton, N.J.: Princeton University Press, 1988); and Pierre Landry, Decentralized Authoritarianism in China: The Communist Party’s Control of Local Elites in the Post-Mao Era (Cambridge: Cambridge University Press, 2008). 7 Xueguang Zhou, “Unorganized Interests and Collective Action in China,” American Sociological Review 58 (1993): 54–73. 8 Jeffrey N. Wasserstrom and Liu Xinyong, “Student Associations and Mass Movements,” in Urban Spaces in Contemporary China, ed. Deborah S. Davis, Richard Kraus, Barry Naughton, and Elizabeth J. Perry (Washington, D.C.: Woodrow Wilson Center Press, 1995), chap. 14. 9 Ching Kwan Lee, Against the Law: Labor Protests in China’s Rustbelt and Sunbelt (Berkeley: Uni- versity of California Press, 2007); and Kevin O’Brien, ed., Popular Protest in China (Cambridge, Mass.: Harvard University Press, 2008). 10 Laura Luehrmann, “Facing Citizen Complaints in China, 1951–1996,” Asian Survey 43 (2003): 865. 11 Carl F. Minzner, “Xinfang: An Alternative to Formal Chinese Legal Institutions,” Stanford Journal of International Law 42 (2006): 103–179. 12 Xi Chen, Social Protest and Contentious Authoritarianism in China (New York: Cambridge Uni- versity Press, 2011). 13 Mary Gallagher, “Mobilizing the Law in China: Informed Disenchantment and the Devel- opment of Legal Consciousness,” Law and Society Review 40 (4) (2006): 783–816. 14 For a useful review of arrest and detention patterns across different types of dissenters over time, see Andrew Wedeman, “Strategic Repression and Regime Stability in China’s Peaceful Development,” in China’s “Peaceful Rise” in the 21st Century: Domestic and International Conditions, ed. Sujian Guo (Aldershot, U.K.: Ashgate, 2006), 89–115 15 Leslie Hook, “Beijing Raises Spending on Internal Security,” Financial Times, March 6, 2011, http: //www.ft.com/intl/cms/s/0/f70936b0-4811-11e0-b323-00144feab49a.html#axzz1Ohfwyzsk. 16 Ching Kwan Lee and Yonghong Zhang, “The Power of Instability: Unraveling the Micro- foundations of Bargained Authoritarianism in China,” American Journal of Sociology 118 (6) (2013): 1475–1508.

143 (2) Spring 2014 133 State & 17 For example, see Kevin J. O’Brien and Lianjiang Li, Rightful Resistance in Rural China (New York: Social Cambridge University Press, 2006); and Kevin O’Brien, “Villagers, Elections and Citizenship in Protest Contemporary China,” Modern China 27 (4) (2001): 407–435. 18 Ching Kwan Lee and Yuan Shen, “The Anti-Solidarity Machine? Labor Nongovernmental Organizations in China” in From Iron Rice Bowls to Informalization, ed. Sarosh Kuruville, Ching Kwan Lee, and Mary Gallagher (Ithaca, N.Y.: Cornell University Press, 2011). 19 Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (1944; Boston: Beacon Press, 2001). 20 Marsha Pripstein Posusney, Labor and the State in Egypt: Workers, Unions, and Economic Restruc- turing (New York: Columbia University Press, 1997), chap. 3. 21 Vince Boudreau, Resisting Dictatorship: Repression and Protest in Southeast Asia (Cambridge: Cambridge University Press, 2004); and Graeme B. Robertson, The Politics of Protest in Hybrid Regimes: Managing Dissent in Post-Communist Russia (Cambridge: Cambridge University Press, 2011).

134 Dædalus, the Journal ofthe American Academy of Arts & Sciences The Politics of Increasing Religious Diversity in China

Robert P. Weller

Abstract: China has seen a remarkable growth and pluralization of religious activity over the past thirty years, a development that has rapidly overtaken the incremental and sluggish changes in the relevant reg- ulatory structures. In much of the country, the government has managed the mismatch between religious practice and of½cial rules by governing with “one eye open and one eye closed,” that is, by pretending not to notice violations of the regulations as long as people pretend that they are following the rules. Com- parative evidence suggests that such a mode of governance can be long-lasting and effective by encourag- ing groups to self-censor, by allowing space for contextual experimentation, and by stressing the acceptance of nominal convention over the control of behavior. This situation is likely to continue unless China adopts a new vision of the desired relation between state and society.

Over the past two decades, religious practice of all sorts has remarkably come back to life in China. Temples to local gods have popped up like mush- rooms over broad sections of the rural countryside, with some of them attracting crowds of a hundred thousand visitors for major annual festivals. Islam is increasingly visible as Muslims from China’s far west migrate to the heavily populated east side of the country, and foreign Muslims arrive in large numbers to trade in China’s coastal cities. This has further encouraged a religious rediscovery among some of the local Muslims who had long lived in those areas, and has encouraged the conversion of some non-Muslims to the faith. Christianity has ROBERT P. WELLER is Professor of grown almost everywhere, and even the “under- Anthropology at Boston University. ground” church is increasingly public in its practice. His publications include Discovering Daoist and especially Buddhist temples are reviving Nature: Globalization and Environ- quickly as well, sometimes in surprising ways, as with mental Culture in China and Taiwan some of the majority Han Chinese who now devote (2006), Alternate Civilities: Chinese Culture and the Prospects for Democracy themselves to Tibetan branches of Buddhism. (1999), and the recent Rethinking Plu - One of the most serious problems these rapid ralism: Ritual, Experience, and Ambi- changes pose for the Chinese government is how to guity (with Adam Seligman, 2012). handle the new kinds of diversity that have resulted.

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00278 135 The In areas where local temple religion once ples that are not certi½ed by the Buddhist Politics of again provides a signi½cant source of so - or Daoist associations. Any religious ac - Increasing Religious cial capital, what happens when a new tivity outside the auspices of one of the Diversity in Chris tian minority rejects existing ritual ½ve religious associations–the practice China mechanisms of local unity? How do local of Christianity in house churches being dynamics change as thousands of internal the most noted example–lies outside the migrants move into villages and millions law. Religious practice can be and some- more move into cities, bringing their own times is repressed; nevertheless, religiosity separate religious traditions? Religions of all kinds has grown, both legal and extra- sometimes build bridges to each other, but legal, and most of it has done so very much they also sometimes build impassable and in the public view. uncivil walls. Thus, there is a wide gulf between the The new diversities also pose an even very limited religious diversity imagined more fundamental problem for the Chi- by the state regulatory framework and the nese government: how much room can a vast growth in actual religious life. In re - Communist state leave for social networks cent years, the state has been willing to and imaginative worlds that do not share tolerate much more than the letter of the the state’s core values? For most of its his - law permits, often by simply ignoring re - tory, the People’s Republic of China has ligious behavior that does not ½t the reg- responded to religion with varying de- ulatory model. By governing with “one eye grees of hostility: from impatient toler- open and one eye closed,” as the Chinese ance of what the state considered a super- metaphor goes, the state has created an stitious remnant, during the ½rst part of open space where religion has fermented the Maoist period, to nearly complete in- and expanded, even without a stable legal tolerance of what party leaders began to environment to support it. Closing one eye see as unacceptable departures from Rev- has allowed of½cials to maintain the nom- olutionary cultural norms, especially dur- inal status quo for religion–in fact, for ing the decade beginning with the Socialist civil associations of all kinds–even while Education Movement in the mid-1960s. allowing new kinds of religious experi- But with religious practice now rapidly in- ments to crop up around the country. creasing, the state has struggled to ½nd an Religion shapes fundamental concepts appropriate response. of identity and society, and its growth has Changes in the legal position of religion thus fostered and reflected major changes have been incremental at best since China’s in China. The current system of state con- religion policy ½rst loosened up over two trol forms a kind of governance by hy- decades ago. The government still recog- pocrisy: much of the newly elastic reli- nizes only ½ve religions–Buddhism, Dao- gious sector lies outside the law yet is tol- ism, Islam, Protestantism, and Catholicism erated because of½cials act as if they cannot –with each organized into a single corpo- see. Such a system contains many inherent ratist body to represent its interests in close tensions, including the constant potential collaboration with state goals. Many world for, and occasional realization of, repres- religions–including Eastern Orthodoxy, sion. Nevertheless, comparative evidence Judaism, and Baha’i–thus have no legal suggests that this kind of one-eyed gover- space in China, nor do indigenous Chinese nance can provide a medium for the growth redemptive societies. Confucianism has no of pluralism and diversity over relatively place in the of½cial religious world, and long periods of time. neither do the thousands of village tem-

136 Dædalus, the Journal ofthe American Academy of Arts & Sciences The growth of religion in China is obvi- have no religious beliefs.2 The survey ques- Robert P. ous to anyone who visits the country, but tions that more effectively identify this Weller is dif½cult to pin down statistically. One population do not ask about belief at all, of the problems is that of½cial government but instead ask about practice. A 2007 sur - statistics have counted only those people vey of 7,021 people from around the coun - formally registered as “believers” within try illustrated the gap neatly. When asked one of the ½ve of½cial religions. But not for an opinion on whether such things as even the government believes that count God, gods, spirits, ghosts, or Buddha exist is accurate; and we have recently begun in this world, 75.2 percent said that they to get independent survey data to supple- did not exist. Yet when asked whether they ment the unof½cial guesses about ab - had worshipped God or gods/spirits in the solute numbers that had previously come past year, 63.2 percent said they had wor- primarily from the underground church. shipped in an institutionalized setting, at For instance, a 2007 survey by scholars at home, or at a graveside; only 35.2 percent East China Normal University estimated said they never worshipped.3 Re porting of that 31 percent of the adult population– religious practice thus leads to much higher roughly three hundred million people– numbers than reporting of religious belief. described themselves as religious. This is No matter whom we count and how we about three times higher than the of½cial count them, there is consensus among ob - ½gure, but its reporting in the China Daily, servers that religion is far more visible than an of½cial organ of the state, indicates that it had been before the reform period began the government took it seriously.1 Even in 1979. In some parts of China, active tem- these more independent estimates are al- ples are again visible everywhere, often most certainly low, since respondents with more than one temple per village, and know that claiming no religious af½liation almost all of them extralegal. Meanwhile, is the more of½cially sanctioned answer. other areas predominantly feature mosques But the problem of counting is far great- or churches, and it is quite common to see er than these numbers would imply. This a mix of the two. Even the most conserva- point was driven home to me many years tive numbers available–based on the reg- ago by an old rural woman who insisted istration lists of the ½ve of½cially sanc- that she had no religion; she just “burned tioned religions–show markedly rapid in- incense.” What she meant was that her creases for Buddhism and Protestantism, practice had little in common with of- with slower growth for the three others. ½cial state de½nitions of religion, that is, something based on sacred texts, mediated This rapid blossoming of religion poses by clergy, and joined through a conscious new problems of diversity for China. In act of faith. For her, worship was the act rural Han communities, which accounted of showing respect to spirits by burning for the great majority of the total Chinese incense, and occasionally asking for their population until the very recent explosion concrete intervention in the world. Texts in urban migration, it was standard prac- played only a minor role, clergy were ex- tice for all residents to contribute at least perts to be hired when needed (rather like token ½nancial support and make offer- plumbers), and faith was no more than a ings for the performance of important secondary concern. Hundreds of millions community rituals. The details varied, but of Chinese citizens share these attitudes larger temples might request a small fee toward their spiritual life, and they often from each household, while smaller tem- tell poll takers, in all good faith, that they ples might rotate the responsibility for

143 (2) Spring 2014 137 The burning incense among all the households. spiritualized context that allowed the local Politics of People were free to worship all kinds of cadres to carry out a brief memorial ser - Increasing Religious spirits, including those with no local tem - vice before the minister took over. That Diversity in ples, but nearly everyone took part in larg- is, ritual practice opened up the event so China er public ritual life. deeply that there was even space for of - This became a problem only when some ½cial atheism to be recognized alongside rural Han residents converted to religions each of the local religions.4 In general, that forbade the polytheistic openness of however, we still have very few studies of the older traditions. The resulting tensions how the new religious diversities are play- have been expressed in a variety of ways, ing out on the ground, or of whether the including, in recent years, some members growth of religion is dividing groups of of Protestant churches not only refusing people from each other or encouraging to take part in “idolatrous” rituals con- them to get along together. ducted by the rest of the village, but also While the new diversities only some- actively protesting when non-Christians times create signi½cant local tension, they parade their deities through the streets or all pose a challenge to the socialist state’s set off ½recrackers. On a national scale, image of itself. China’s Communist Party similar tensions erupted at the end of 2010, had a split attitude toward religion almost when a village a few miles from Qufu– from the beginning. On the one hand, Confucius’s hometown and the site of a Marx’s brief writings on religion seemed temple complex in his honor–proposed to imply that it was an unfortunate side building a Protestant church with a 136- effect of capitalist exploitation that would foot tower that would have dwarfed the simply fade out on its own under Commu- main Confucian temple. The result was a nism. His references to religion as the na tional outcry opposing the church, “opiate of the people” or the “heart in a branding it an offense to the dignity of heartless world” showed a kind of patron- Chinese tradition. izing sympathy toward people for whom Of course, diversity does not necessarily religion was the only escape. On the lead to conflict, and China is also full of other hand, when Mao wrote his impor- examples of various religious traditions tant early analysis of the peasant move- living amicably side by side. For example, ment in Hunan as a potential model for a small mountainous township in Yunnan revolution, he branded religion as one of is home to seven ethnic groups and four the “great ropes binding the Chinese peo- religious traditions (Catholic, Protestant, ple,” putting temples in the same category local animist, and Tibetan Buddhist), but as landlords: features of old China that the community as a whole has found ways would have to be chopped through in to share their ritual practices. Sometimes order to free its people. The tremendous this means making special adjustments at social capital and alternative sense of iden- ritual events, such as preparing soda for tity in religion–its potential threat–was the Protestants because they refuse alco- never far from the minds of party leaders. hol. Still, everyone joins together, espe- They knew how religious power had been cially for major happenings. In her work mobilized throughout the preceding dy - on this Yunnan township, anthropologist nasty in the White Lotus, Taiping, Muslim, Wu Keping describes a funeral for a local and Boxer rebellions, to mention only teacher conducted in such a way that fol- some of the largest. lowers of each of the town’s religions Actual religious policy since the found- could take part. They even fostered a de - ing of the People’s Republic has wavered

138 Dædalus, the Journal ofthe American Academy of Arts & Sciences between these two poles. In the 1950s, from the more totalizing policies of the Robert P. there were few attempts to do away with Cultural Revolution, creating far more Weller religion directly, even as religious groups open economic, social, and personal spac- were consolidated into ½ve large organi- es. The political mechanisms for handling zations under the direct control of the cen- diversity returned to something like the tral state. Religious belief, but not neces- model of the 1950s, with corporate orga - sarily practice, was legally guaranteed with - nizations in place to represent each rec- in the con½nes of those ½ve recognized ognized interest group (as with the ½ve associations. We have evidence of con - religious associations), a newly invigorated tinuing religious activity, clearly known United Front Work Department trying to to local of½cials, through the early 1960s. coordinate all the new religious activity, The United Front Work Department of and the rise of market entrepreneurs and the Communist Party, the department re - other social groups that had briefly seemed sponsible for all the forms of diversity extinct. that the party was willing to tolerate, was United Front work has in recent years a crucial carrier of this policy. Groups tol- combined with the party’s campaign to erated by the United Front included eth- construct China as a “harmonious society.” nic minorities, overseas Chinese, entre- This term was closely associated with preneurs (although not in all periods), and then–General Secretary Hu Jintao, and followers of religion. In each of these areas, since at least 2006, the idea has explicitly the party was willing to work with people included religion. “Harmony” is a tricky who had characteristics that prevented concept. Some Chinese uses simply con- them from being proper Communists, flate it with stability, and it is no coinci- such as religious belief or ownership of a dence that during this same period, “main- private business, or that made them some- taining stability” became a prominent how different from the majority popula- slogan, ac companied by a massive invest- tion, like ethnic minorities. The United ment in policing. On the other hand, Front strategy involved mechanisms to musicians use the idea of harmony to indi- coordinate the interests of these groups cate the coordination of tensions created with those of the state, including People’s by different pitches being played simulta- Political Consultative Congresses, which neously. This more complex idea of har- pulled representatives of these various mony echoes its original Confucian uses, groups into a forum where the government which also frequently refer to music or to could propagate its views and where, in the need to avoid monotony in food by principle, these diverse interests could be combining different flavors. According articulated to the state. to the Con fucian Analects, “The petty per- By the middle of the 1960s, however, and son unites without harmonizing while the especially with the Cultural Revolution, great person harmonizes without uniting” the Chinese party-state insisted that China –a saying that expresses the potential of a be uni½ed around “proletarian culture.” harmonious society to incorporate multi- Many mass organizations became less im - ple diversities. portant since the diversities they repre- sented lost their legitimacy. For the same In practice, these changes have left reli- reasons, the United Front Work Depart- gion in a complex political position. On ment also became largely irrelevant. paper, the regulatory world for religion Yet after the economic reforms began looks roughly like it did in the 1950s, with to take effect in 1979, China moved away large and tame organizations representing

143 (2) Spring 2014 139 The each of the ½ve sanctioned religions. This monitors religion very closely and often Politics of system recognizes limited religious diver- tries to override religious meanings (for Increasing Religious sity, but only as coordinated and channeled instance, by demanding that national flags Diversity in through a corporatist system, and only be hung inside monasteries). The unin- China within the broader unity as socialist sub- tended result has often been the sharpen- jects. In reality, however, everything is dif- ing of tensions. In much of the rest of the ferent. The political vise was clearly tight- country, however, ½re alarms tend to be ening during the 1950s, progressively lim - the rule. Local of½cials increasingly leave iting the action of religious groups and religion alone so long as they feel that no often pushing harder than the laws and lines have been crossed. regulations seemed to demand. But now, As McCubbins and Schwartz explain, the government in much of China has bent “[F]ire-alarm oversight tends to be par- in the opposite direction, simply turning ticularistic . . . it arguably emphasizes the its gaze away from constant religious scoff - interests of individuals and interest groups laws–from unregistered (but no longer more than those of the public at large . . . underground) churches to the thousands [E]ven if ½re-alarm oversight deempha- of village temples–all thriving outside the sizes some public-interest concerns, it ½ve legal associations. gives special emphasis to a concern for Such policies of lax implementation are the interests and rights of individual citi- necessarily informal: if they were formal- zens and small groups.”6 Their observa- ized, they would be visible in the regula- tion captures a critical dynamic in the ½re- tory system and thus subject to its rules. alarm oversight of most Han Chinese re - Informality, however, also brings the pos- ligion, which relies heavily on informal sibility of uneven enforcement, which cer- understandings between of½cials and prac- tainly is the case across China. The classic titioners. It is as if government of½cials distinction between ½re alarms and po - agree to pretend that they cannot see, so lice patrols, conceived by political scien- long as followers agree to pretend that they tists Mathew McCubbins and Thomas are not breaking the rules. That mecha- Schwartz in a study of congressional over- nism explains why we can have tens or (if sight in the United States, is a useful lens we include those who occasionally burn through which to view the question of pol- incense) hundreds of millions of people icy enforcement in China.5 In the police- openly practicing religion outside the legal patrol model, the state constantly moni- framework. This is governance by mutu- tors its subjects, actively looking for po - ally accepted hypocrisy. tential trouble. Fire alarms, on the other The winks and nudges that allow this to hand, wait passively, becoming active only work have built a fragile scaffolding on in an emergency. which to hang such a rapid religious Religious policy implementation in expansion. The unspoken and informal most areas of China has now moved from line de½ning what is permissible encour- police patrols toward ½re alarms. The ex - ages some groups to push against the lim- ceptions tend to be in areas with a conflu- its of political possibility. A few urban ence of religious and ethnic diversity work - churches have done this consistently, cre- ing also in combination with strong ten- ating constant tension with local author- sions between state and local interests. ities as they strive for an end to hypoc- Above all, this dynamic exists in Tibetan risies and to their extralegal standing. regions and in some of the Muslim areas Many other unregistered churches, how- of the northwest, where the government ever, have opposed this strategy, arguing

140 Dædalus, the Journal ofthe American Academy of Arts & Sciences that it undermines a status quo that they gerous accusation of being a capitalist. Robert P. can live with, and that it encourages the The answer for many was to register with Weller government to treat them more harshly. township and village governments as col- Governing with one eye closed can also lective enterprises. Such registrations make policy seem capricious. It can be were often purely nominal, however, and quite dif½cult to understand why one typically involved the private entrepre- group suddenly loses its place of worship, neur simply paying a fee to local of½cials or why one temple is awarded legal regis- in exchange for the registration status. So tration while another is refused. In most in an important sense, much of the most cases, such situations encourage active self- vibrant sector of the economy consisted censorship–unpredictable risk encour- entirely of scofflaws. In that case, however, ages people to be cautious–which is one the central government decided after a of the reasons the policy continues. But on few years to change the situation by re- the other hand, unclear rules can some- vising tax laws and creating much more times encourage aggrieved or demanding legitimate space for large private busi- groups to push the boundaries. Thus, oc - ness. In the case of township and village casional acts of repression become neces- enterprises, governing through hypocrisy sary to remind people that there is a line appears to have fostered a few years of that cannot be crossed, even if it is invisi- experimentation, and to have allowed the ble. Some repression seems obvious, as oc- central government to make its peace with curred after the large social protests of a more market-based economy. After that, Falun Gong in 1999 or the uncivil actions they changed the rules, creating more in- of extreme Christian offshoots like Eastern centives to register as an independent com - Lightening; but in other cases, it is simply pany, in turn allowing of½cials to open both unpredictable. The ½re-alarm dynamic has eyes. created far more social space in the east- A somewhat different dynamic now ap - ern regions of the country than did the pears to be at play for religious policy, in constant pressure of police-patrol styles part because fundamental political reform of religious control, but it carries its own has been much harder to achieve than eco- modes of repression as well. nomic change. Governing religion with one eye closed offers China the advantage Why govern through hypocrisy? Why of creating a signi½cant space for diversi- not simply rationalize the rules to ½t the fying identities and for people to con- desired situation on the ground? Reli- tribute to the general welfare by creating gious policy is certainly not the only area independent social ties. This form of man - in which China governs by closing one agement does not require China to move eye, and sometimes in the past the state away from the fundamentally corporatist has indeed changed the legal framework and authoritarian model of state/society to match a new reality. Perhaps the most relations that it has adopted for three de - important such case in recent history cades now. Perhaps unsurprisingly, non- concerned the rise and decline of “town- governmental organizations–which also ship and village enterprises” in the 1980s. address newly diverse identities (from Early in the reform period, very few en - migrant workers to sports car enthusiasts) trepreneurs dared to create private enter- and serve important social functions– prises on anything greater than a tiny scale. have rates of non-registration or false and They feared both the punitive tax situa- misleading registrations roughly compa- tion for private companies and the dan- rable to what we see with religious groups.

143 (2) Spring 2014 141 The To some extent, every country has areas dozen clandestine churches in Amsterdam Politics of governed with one eye closed. Prostitu- alone. But of course, there was nothing Increasing Religious tion in the United States provides a small really clandestine about them. Surviving Diversity in example, with no systematic state at- records show that state of½cials clearly China tempt to stamp it out, but also no attempt knew about them, and dealt with them to change the law to match the situation largely by closing their eyes in ways not so on the ground. What lawmaker would dare different from what we see today in China. propose it? In that case, the need to pub- The historian Benjamin Kaplan has re- licly proclaim a certain morality overrides ferred to this as the “½ction of privacy,” any desire to make the rules realistic. The because such religions were truly “private” result is a mode of occasional repression, only in ½ction–in the eyes of the law and creating a dynamic not too different from of the of½cials who looked the other way.7 China. The “don’t ask don’t tell” policy Kaplan has suggested that these hy - toward homosexuality in the American pocrisies lasted so long in Holland because military was an attempt to do something they granted the country a certain amount similar, though it was ultimately less sus- of diversity, even as it claimed a complete tainable. Calvinist moral hegemony. Sometimes the Historically, the case most similar to point of a law is to state a moral ideal rath- contemporary China’s religion dilemma er than to regulate actual practice. That may be the clandestine churches that seems to be the main reason why it took popped up around Europe, and especially centuries before the Dutch began to think in Holland, between the seventeenth and of their policy toward clandestine church- nineteenth centuries. From the outside, es as problematic (ultimately recognizing these churches appeared to be ordinary multiple legitimate religions within the residential buildings, and typically their country), why prostitution policy seems ground floor ½t this description. But the unlikely to change in the United States, and second floors of these buildings opened why China still shuts one eye to the reali- up into large extralegal houses of worship, ties of religious behavior on the ground. most often Catholic, but also in smaller The regimes that controlled Taiwan dur- numbers Mennonite, Lutheran, and Jew- ing the twentieth century–the Japanese ish. The Netherlands had been one of the colonial government, the Nationalist Party most disastrous battle½elds in the Thirty authoritarian state, and the democratic Years’ War, which pitted Catholics against government after 1987–also tended to Protestants in vastly destructive combat. govern religion through similar pretenses. The formulas of the treaties of Westphalia, For example, early in the twentieth cen- which ½nally ended the war, demanded tury, the Japanese repressed part of an an- that each nation’s ruler would henceforth nual ritual for the dead in which young determine the religion of his people (cuius men climbed long bamboo poles to re- regio, eius religio). This recipe for the reli- trieve flags and food offerings from the gious cleansing of each country gave mi - top (called qiang gu, “stealing from the nority religions the right to leave, and al - lonely ghosts”). The state feared the large lowed them no other public existence. crowds, rowdy atmosphere, and appar- Yet those treaties did leave a small space ently frequent injuries at the event. In the for completely privatized religion, where town of Sanhsia, the local people, as good minority religious groups could occa- subjects of the empire, agreed to end the sionally meet outside the public sphere. custom. In its place, they said, they were The result, before very long, was several sponsoring a pole-climbing contest for

142 Dædalus, the Journal ofthe American Academy of Arts & Sciences village teams in order to meet the Jap- of repression are higher than the appar- Robert P. anese Emperor’s desire for healthy sub- ent risks of allowing the behavior to con- Weller jects. Half a century later, when the newly tinue. At the same time, nominal adher- arrived Nationalist regime tried to dis- ence to the conventions of the law must courage the practice of offering specially be valuable enough that the state chooses fattened whole pigs at birthday celebra- not to change the law itself. While deeper tions for deities, Sanhsia’s people again study of comparative cases might help us agreed, and promised instead to hold a draw broader conclusions about when one- contest to encourage better agriculture: eyed governance becomes important, even the farmers who could raise the fattest these few examples suggest that there is pigs would have them displayed in front of nothing uniquely Communist or uniquely the temple on the god’s birthday. In both Chinese about this political strategy. cases the rituals continued fundamentally unchanged, but were simply covered with What does China gain from insisting a ½g leaf of adherence to the new policy. on the arti½ce that there are only ½ve reli- The town hall in Sanhsia is just down gions, and that each adherent is carefully the road from the main temple, and al- registered in one of the ½ve corporatist re- most all of the of½cials were locals, even ligious institutions? Of½cials I have spo- under Japanese rule. That is to say, there ken with understand perfectly well how is no chance that the local state was actu- broad the gap is between their ½ctive cor- ally being fooled. Instead, just as in Hol- poratist religion (in contrast to the Dutch land historically or China today, of½cials ½ctive privatized religion) and real religion agreed not to notice what was really hap- as practiced by the Chinese people. They, pening in exchange for townspeople’s too, are frustrated by the hypocrisies that hypocritical claims to be following policy. the current system forces on them, and by While these particular rituals are again the state’s apparent inability to change the of½cially tolerated in contemporary Tai- system. wan, one governmental eye continues to Changes to a more transparent system close, especially in regard to the require- are not impossible, as China’s earlier ex - ment that temples register. Although there perience with township and village enter- are no longer political obstacles to regis- prises showed. Why has China not done tration, the process does require a certain so? There are probably two primary rea- amount of ½nancial transparency that sons. First, governing with one eye closed many temples prefer to avoid. In one town is much more effective and is potentially I visited, of½cials told me they had done a much longer-lasting than most standard detailed history of every local temple, but political theory would allow. As the Dutch could not make it public because doing so case shows, such a system can work for would mean admitting that they knew centuries to maintain religious diversity about the unregistered temples’ existence, in dif½cult circumstances, in spite of the in turn mandating that the of½cials enforce injustice and necessary informality that the law. One eye stayed ½rmly closed. goes along with it. And as in Taiwan, this Like the Dutch case, these Taiwanese mode of governing religion helps to main- ex amples remind us that nominal accep - tain a vibrant local social world, without tance of the conventions of the law may be any major threat to the political order. A more important to of½cials than substan- simple comparison of the ½re-alarm sys- tive obedience to the law. This may be tem of one-eyed religious governance in particularly true when the perceived costs most of China to the police-patrol system

143 (2) Spring 2014 143 The of two-eyed governance in Tibetan and group to register would consequently Politics of Uyghur areas shows how much easier it begin to dismantle the corporatist system Increasing Religious can be to tolerate religious diversity of control. Such a change could not be Diversity in through the informal mechanisms of limited to religion, but would require a China looking the other way than through the fundamental reimagining of the state/ strict enforcement of the law. society relationship in China. This step The second reason the status quo has would be nearly as radical for social rela- lasted so long is that changes in religious tions as the reforms that began in 1979 were governance in China would have reper- for the economy. And it will require bolder cussions that reach far beyond religion social and political leadership than we have itself. The apparently straightforward seen so far. step of allowing any apolitical religious

endnotes 1 Jiao Wu, “Religious Believers Thrice the Estimate,” China Daily, February 7, 2007, http:// www.chinadaily.com.cn/china/2007-02/07/content_802994.htm. 2 For a good discussion of the problems this has caused in the Hong Kong census, see Joël Thoraval, “The Western Misconception of Chinese Religion . . . and Its Consequences–A Hong Kong Example,” China Perspectives 3 (February 1996): 58–65. 3 These data come from The John Templeton Foundation, “Spiritual Life Study of Chinese Residents,” led by Fenggang Yang, Victor Yuan, Anna Sun, Lu Yengfang, Rodney Stark, Byron Johnson, Eric Liu, Carson Mencken, and Chiu Hei-Yuan (2007). The data are publicly available at the Association of Religious Data Archives, http://www.thearda.com/Archive/ Files/Descriptions/SPRTCHNA.asp. 4 This is based on the recent research of Keping Wu, “‘Primitive’ Pluralism: Public Life in Multi- ethnic and Multi-religious Villages of Southwest China,” unpublished manuscript (2013). 5 Mathew D. McCubbins and Thomas Schwartz, “Congressional Oversight Overlooked: Police Patrols Versus Fire Alarms,” American Journal of Political Science 28 (1) (February 1, 1984): 165–179. 6 Ibid., 172. 7 Benjamin J. Kaplan, “Fictions of Privacy: House Chapels and the Spatial Accommodation of Religious Dissent in Early Modern Europe,” American Historical Review 107 (4) (2002): 1031– 1064.

144 Dædalus, the Journal ofthe American Academy of Arts & Sciences The Chinese Century? The Challenges of Higher Education

William C. Kirby

Abstract: One can ½nd in any airport kiosk books that proclaim ours to be “the Chinese century.” We have titles such as “The Dragon Awakes,” “China’s Rise,” “The Rise of China,” and “China’s Ascent,” to name but a few. But to rise is not necessarily to lead. What constitutes leadership? In higher education, China is building the fastest growing system–in quality as well as in quantity–in the world.The foremost global powers of the past four centuries all offered models in the realms of culture, ideas, and education. This may be said of seventeenth-century France under Louis XIV; of the Qing during the Qianlong reign of the eighteenth century; of Britain and Germany in the nineteenth century; and of the United States in the twentieth. China now aspires to educate global elites. For the twenty-½rst century, then, are Chinese universities poised for global leadership?

On Sunday, April 21, 2013, a crowd gathered at the Great Hall of the People in central Beijing to inau- gurate a new college at Tsinghua University. Letters WILLIAM C. KIRBY, a Fellow of from Chinese President Xi Jinping and U.S. President the American Academy since 2005, Barack Obama were read aloud, followed by video is the T. M. Chang Professor of testimonials from past and present American sec- China Studies at Harvard Univer- retaries of state: Henry Kissinger, Colin Powell, and sity and the Spangler Family Pro- John Kerry. Together with Vice Premier Liu Yandong, fessor of Business Administration who hosted the meeting, all identi½ed the founding at Harvard Business School. He is of Schwarzman College at Tsinghua as a landmark a Harvard University Distinguished in the history of U.S.-China relations and in the as - Service Professor, and the former Dean of the Faculty of Arts and Sci - cent of Chinese universities. The vision of Tsinghua ences at Harvard. His recent publi- and of the new college’s benefactor, American busi- cations include the edited volumes nessman and philanthropist Stephen A. Schwarz- The People’s Republic of China at 60: man, was to build a residential college that would An International Assessment (2011) house and educate, in China, the global leaders of and Prospects for the Professions in the twenty-½rst century. Schwarzman College and China (with William P. Alford and its resident Schwarzman Scholars program would Kenneth Winston, 2011). His latest book is Can China Lead? Reaching match in ambition and endowment the Rhodes the Limits of Power and Growth (with Scholarships at Oxford University, which for more Regina M. Abrami and F. Warren than a century have been committed to educating McFarlan, 2014). those with “potential for leadership.”1

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00279

145 The The dynamic new president of Tsinghua Studies, the Guoxueyuan. Its famous “four Challenges University, Chen Jining, noted that the new tutors”–Liang Qichao, Wang Guowei, of Higher Education college and program were part of Tsing- Chen Yinque, and Zhao Yuanren–added hua’s long history of internationalization. international and scienti½c dimensions to But whereas the university once prepared the study of Chinese language, literature, Chinese citizens to study in the United linguistics, and archaeology. Tsinghua’s States, Tsinghua was now to be the educa- history department, founded in 1926, was tional destination of top postgraduate chaired for its ½rst decade by Jiang Tingfu students from America, Europe, Asia, (T. F. Tsiang), who revolutionized the and beyond. study of China’s modern international Today, Tsinghua University is one of re lations. John K. Fairbank, a pioneer in China’s two leading universities and one modern Chinese studies in the United of the world’s elite schools in terms of States, learned his Chinese history from admission. China and the world of Chinese T. F. Tsiang at Tsinghua. higher education have come a long way With the establishment of the National since Tsinghua was founded in 1911, the Government in 1928, Tsinghua became Na- xinhai year of the Xuantong Emperor tional Tsing Hua University and the fol- (that is, the last year of the last emperor lowing year inaugurated its graduate of the last imperial dynasty). The history school. By 1935, Tsinghua’s ten graduate of Tsinghua mirrors the story of higher departments counted for one-third of the education in modern China. graduate departments across China. It was Founded by the Qing court as Tsinghua a comprehensive university by 1937 and a xuetang (Tsinghua Academy) near the site leading player in a vibrant mix of institu- of the Tsinghua yuan, an imperial garden tions (public and private, Chinese and for- of the eighteenth century, Tsinghua began eign) that included Peking University, Jiao as a preparatory school for students se - Tong University, National Central Uni- lected to study in the United States. At versity, and the Academia Sinica, accom- the urging of then-president of the Uni- panied by private colleges of high quality versity of Illinois, Edmund J. James, the such as St. John’s University, Yenching U.S. government remitted a portion of University, and Peking Union Medical Col- Boxer Indemnity funds for the education lege. All this made Chinese higher educa- of Chinese in the United States and the tion one of the most dynamic systems in establishment of Tsinghua. China, James the world in the ½rst half of the twentieth argued, was on the edge of revolution. century.3 “The nation which succeeds in educating This period of development ended in the young Chinese of the present genera- 1937, when the Tsinghua campus was oc - tion,” he wrote, “will reap the largest pos - cupied by Japanese troops. In 1938, many sible returns in moral, intellectual, and of its faculty and students marched with commercial influence.”2 In its ½rst decade, the National Government to the interior, Tsinghua built up an American-style where Tsinghua became part of National campus–its Jeffersonian grand auditori- Southwest Associated University (Lianda) um inspired by the auditorium at Urbana- for the duration of the war. The universi- Champaign–to prepare its students for ty’s return to its campus in 1946 would study in America. offer only a short respite before the onset By 1925, Tsinghua was itself a college of of civil war and the Communist conquest liberal arts and sciences and home to of China. In December 1948, Tsinghua’s China’s leading Institute of Chinese longtime president, Mei Yiqi, left Beijing.

146 Dædalus, the Journal ofthe American Academy of Arts & Sciences In 1956, he became president of a re- In November 2009, Tsinghua reopened its William C. newed and distinguished National Tsing famous Institute of Chinese Studies. The Kirby Hua University in Taiwan, leading part of Tsinghua School of Economics and Man- a divided Tsinghua in a divided China. agement began to lead the university in re- After the establishment of the People’s forming its general education curriculum. Republic on the mainland, Tsinghua, like And at the university’s one hundredth most institutions of higher learning, was anniversary in 2011, a magni½cent New Sovietized. It became a polytechnic univer- Tsinghua Academy (Xin Tsinghua xuetang) sity to train engineers. The schools of sci- was dedicated not to the ½elds of engi - ences and humanities, agriculture, and law neering, science, and technology, for were all abolished, and their faculty mem- which Tsinghua has been best known in bers were dispersed to other institutions. recent decades, but to the performing arts. This reorganization positioned Tsinghua President James of the University of Il- for leadership during the First Five-Year linois was convinced, in 1907, that “[e]very Plan (1953–1958), when it trained many great nation in the world will inevitably of China’s subsequent elite, but the re - be drawn into more or less intimate rela- lentless politicization of universities un - tions” with a rapidly changing China.6 He der Mao Zedong ½rst weakened, and then imagined a world where China learned nearly destroyed, Tsinghua. During the from others, not the other way around. But early years of the Cultural Revolution he also conceived of a China that would (1966–1976), Tsinghua became a promi- rise because of its international educa- nent battleground for factional and ideo- tional alliances. During his time there logical strife at the national level. It re - was a robust market for books concerned opened fully only in 1978.4 with the “rise of China.” They had familiar Over the subsequent decades, Tsinghua’s titles: The Dragon Awakes; China Awakened; agenda was tied closely with that of the era Sun Yat Sen and the Awakening of China; Ris- of “opening and reform.” The university ing China; and an unusual entrant, pub- received bountiful government invest- lished in 1904, New Forces in Old China: An ment and rose to lead China in engineering Unwelcome but Inevitable Awakening.7 and science. It established a series of pro- In the second decade of the twenty-½rst fessional schools, one of which, the School century, one can ½nd in any airport kiosk of Economics and Management, has be - books that now proclaim ours to be “the come the most selective school in the Chinese century.” We again have titles such world for undergraduate admissions. as The Dragon Awakes; China’s Rise; The Rise Tsinghua’s graduates have come to dom- of China; China’s Ascent; As China Goes, So inate the Chinese leadership elite, counting Goes the World; and, most forcefully, When among them Presidents Hu Jintao and Xi China Rules the World.8 A cynic might note Jinping.5 that this is why being a foreign China spe- Today, Tsinghua has reestablished itself cialist is so easy: all the books being writ- as a comprehensive university. A School ten today were composed a century ago. of Humanities and Social Sciences was A more forgiving observer might look at established in 1993, and in 2012 it was di - the history of Tsinghua and conclude: Chi- vided into separate schools. Tsinghua’s na is in ascendance today, and it has been Law School was reestablished in 1995. In rising for a century. 1999, the former Central Academy of Arts To rise is not necessarily to lead. What and Design became part of Tsinghua, as constitutes leadership? The foremost po- did Peking Union Medical College in 2006. litical and military powers of the past four

143 (2) Spring 2014 147 The centuries all set standards or offered In 2000, there were 1,041 colleges and uni- Challenges models–regionally or globally–in many versities in China. A de cade later there of Higher Education dimensions, including in the realms of cul- were more than twice as many: 2,358. From ture, ideas, and education. This may be said 1999 to 2009, Chinese institutions of high- of seventeenth-century France under Lou- er education hired nearly 900,000 new, is XIV; of the Qing during the Qianlong full-time faculty members. reign of the eighteenth century; of Britain For most of the history of the People’s and Germany in the nineteenth century; Republic, higher education was an op - and of the United States in the twentieth. portunity afforded to the very few. Now Tsinghua now aspires to educate global China is moving toward mass higher edu- elites. For the twenty-½rst century, then, cation. The gross enrollment ratio (college are Chinese universities poised for global participation rate) of 18- to 22-year-olds leadership? was 3 percent in 1999; it was 24 percent in 2009. By 2020, China aims to have 40 per- Without question, China today is lead- cent of young adults in this age cohort ing simply in the scope and ambition of enrolled in colleges or universities.9 higher education. In 1978, after a decade For all this expansion, land and capital of mostly closed universities, Chinese uni- have been made available by a variety of versities enrolled approximately 860,000 means. The result has been a quadrupling students. This number increased gradually in the square acreage of Chinese universi- until 1990, with enrollment of about two ties since 2000. Old universities have built million at that time. In the 1990s, the gov- stunning new campuses. Zhejiang Univer- ernment accelerated the pace of expan- sity, which was founded in 1897, houses its sion, and by the year 2000 as many as six now-nearly sixty thousand students across million students were enrolled in Chinese three large campuses. Chongqing Univer- universities. sity,established in 1929, has opened beau- Since then, the overall of½cial numbers tifully landscaped new university grounds –counting all types of institutions–have as part of an eight-university daxuecheng, risen dramatically. There are at present or “university city.” Until recently, higher more than thirty million students in Chi- education institutions had been concen- nese institutions of higher learning. In trated in but a few areas, Beijing and the 1998, Chinese colleges and universities lower Yangzi region chief among them. graduated 830,000 students annually; by Today, cities and provinces never known 2010 the number was six million. Today for higher education compete to found, China graduates more university students build, and expand colleges and universi- than the United States and India com- ties–often within new science and tech- bined. In 2000, China had approximately nology zones–as part of their competitive half the number of university students as strategies for growth, development, and the United States; now it has more than prestige. twice the number. According to China’s This surge has been accompanied by a National Plan for Medium and Long-Term diversi½cation of institutions. Private col - Education Reform and Development leges and universities (minban xueyuan) (2010), 20 percent of China’s working- have grown much more rapidly in number age population (ages 20–59) will have a than public institutions and now account higher education degree by 2020. (In the for between 15 and 20 percent of enroll- 2010 census, 28 percent of the U.S. popula- ments and nearly 30 percent of all higher tion reported a higher education degree.) education institutions. In Xian, entrepre-

148 Dædalus, the Journal ofthe American Academy of Arts & Sciences neurs worked with local of½cials to make higher education in China has been elitist William C. Xian China’s capital of private higher as well as massive. In 1995, the Ministry Kirby education. Xian International University of Education launched the “211 Project” (Xi’an waishi xueyuan), founded in 1992 as to enhance the quality of about one hun- an examination prep center, is now one of dred universities. It was followed in 1998 China’s largest private universities, with by a “985 Project” to support thirty-nine a student body of 34,000. Its graduates elite universities, of which nine–China’s enjoy better job placement rates than those so-called Ivy League–would be devel- of Peking or Tsinghua Universities. Unlike oped as “world class” institutions (guoji university presidents the world over, Xian’s yiliu daxue), de½ned as cradles of high- president, Huang Teng, does not worry level, creative researchers; frontiers of about his tenure: he owns 55 percent of the scienti½c research; forces of transforma- university. President Huang is looking to tive research and innovation; and bridges establish branch campuses elsewhere in for international exchange. To that end, China and in North America.10 Chinese central, provincial, and local gov- Large companies are also getting into the ernments, supplemented by university higher education sector. Alibaba’s Taobao foundations and private philanthropy, unit has plans for a “Taobao University,” have provided enormous revenues to the ½rst to train e-business owners, managers, leading institutions, well outspending the salesmen, and professionals, and in time (very signi½cant) rewards given in recent to extend business education to more than European competitions, such as the Exzel- one million online students seeking the lenzinitiativ in Germany. One national ef - skills to start and sustain small- and me - fort focuses on the recruitment of overseas dium-sized businesses. Taobao University talent. The “Thousand Talent Program” also expects to enroll some twenty thou- began in 2008 to recruit leading overseas sand students “offline,” that is, in person. Chinese faculty and researchers; by 2012 it Sino-foreign universities, such as the had “brought home” more than two thou - University of Nottingham Ningbo China, sand. The program was supplemented in have brought higher education and re- 2011 by a “Thousand Foreign Experts” ini - search centers to cities outside the plans of tiative that offers globally competitive in - the Ministry of Education. At the same centives and research support for interna- time, many public universities have estab- tional scholars being recruited by Chinese lished “independent” universities that op - universities. erate as full-time extension schools and With this signi½cant national invest- generate signi½cant revenue. In short, this ment and international recruitment, Chi- is a time of expansion, outreach, and exper - nese universities have risen steadily in in - imentation in Chinese higher education. ternational rankings. In the 2012–2013 QS These developments in China have pro- World University Rankings of more than moted cooperation and competition across eight hundred institutions, Peking Univer- the realm of “Greater China”: Hong Kong, sity and Tsinghua University were num- Taiwan, and Singapore all compete with bers 44 and 48, respectively. In the 2012– Beijing and Shanghai to be the educational 2013 Times Higher Education World Univer- center of the Chinese-speaking world. sity Rankings of the top four hundred uni - Unlike the growth of American univer- versities worldwide, they ranked 46 and 52, sities in the 1950s and the extraordinary respectively. As I have written in an essay expansion of European institutions that published in an earlier issue of Dædalus,11 began in the 1970s, the development of there is much stupidity to the rankings

143 (2) Spring 2014 149 The game. Rankings rank only what can be it is a permanent feature of modern Chi- Challenges measured. They emphasize research pub- na’s educational landscape. China’s old- of Higher Education lication in select international journals, est modern university, Wuhan University, and they studiously ignore teaching, edu- was founded in 1893 as a “Self-Strength- cation, and curriculum. One criterion, ci - ening Institute” with European advice. Be- tation indexes, may be important in eco- fore 1949, China’s state universities were nomics but unhelpful in the humanities. created largely on German models, while International rankings focus on major many of the leading private colleges were research prizes, and universities glory in supported and advised by American having on their faculty Nobel laureates, institutions. Every major university from taking credit for work often done decades the Republican era bears architectural wit- earlier at another university. (At the Uni- ness to that vibrant period of educational versity of California, Berkeley, Nobel lau- partnership. In the 1950s, all Chinese uni- reates receive the ultimate prize: a dedi- versities were reorganized on Soviet pat- cated parking space marked “NL.”) terns during a decade of vigorous Sino- Yet the rankings do show, however im- Soviet exchange. Since 1978, and especially perfectly, the shifting tectonic plates of since 1998, there has been widespread glob al leadership in higher education. Had experimentation in Chinese higher edu- rankings such as those issued by Shanghai cation, much of it in the context of new Jiaotong University, read today by deans international partnerships. and presidents around the world, existed Nearly every leading American univer- a century ago, perhaps eight of the world’s sity today believes that it needs to have a top ten universities would have been Ger- “China strategy” and to be somehow in- man. Harvard University, which ranks very volved in the rapid growth of higher edu- well at the present, would not have been in cation in China. This has given rise to a the top ten, perhaps not in the top twenty; healthy set of experiments and alternative it became a research university worthy of models of engagement. Columbia Univer- the name only in the late nineteenth cen- sity and the University of Chicago have tury by emulating the practices of the Uni- opened an of½ce and a center, respectively, versity of Berlin. Today, at least ac cording in Beijing. Stanford University has built a to the QS rankings, Peking University and courtyard center within the campus of Tsinghua University outperform every Peking University. New York University German university. Times change. has established NYU-Shanghai as a verti- cal university (that is, in a high-rise) as part China, then, is home to the world’s fast - of its global network and in partnership est growing sector–in quality as well as with one of China’s most creative univer- quantity–of higher education in the sities, East China Normal University. The world. This explains the rush of foreign Harvard Center Shanghai–the only uni- universities to establish, or reestablish, a versity-wide center for Harvard outside presence in China; and it helps us under- the United States–promotes research, stu- stand why Chinese universities are explor- dent internships, conferences, and execu- ing international models of “general edu- tive education in China. Duke University’s cation” as they seek to educate and gradu- two-hundred-acre residential campus in ate future leaders. Kunshan, China’s richest and most entre- As we have seen in the case of Tsinghua, preneurial town, located just west of the important role of foreign universities Shanghai, will open its doors in late 2014 as in China is not a new phenomenon. Rather, Duke Kunshan University.12 It is without

150 Dædalus, the Journal ofthe American Academy of Arts & Sciences question the most ambitious international It means the education of the whole per- William C. educational enterprise in China since the son, not just training the specialist, with Kirby days of Yenching University (the present- the aim to ensure that graduates are curi- day site of Peking University). In these ous, reflective, and skeptical learners– ventures, the Americans are joining other people with the capacity for innovation Sino-foreign institutions, such as the and lifelong learning. Just as many Amer- University of Nottingham Ningbo China, ican educators believe (not wrongly) that Xi’an Jiaotong-Liverpool University in young Chinese students are better educat- Suzhou, and the hugely successful China ed in math and science than their Ameri- Europe International School of Business, can counterparts, many Chinese educa- a joint venture with the European Union tors believe that it is the West, and partic- that ranks regularly as the top business ularly the Americans, who are “innova- school in China and among the top twenty- tive” and “creative thinkers” while the ½ve worldwide. Chinese people (somehow despite all their Opportunities for foreign universities ancient inventions and modern revolu- in contemporary China exist everywhere, tions) remain “traditional,” “rule bound,” but perhaps especially in three realms. and “rote learners.” For this some blame First, the over-centralization of Chinese the tortured path to university admission research universities in Beijing and the through the gaokao, or “higher examina- greater Shanghai region has led other tion,” with its modernized version of what cities to be highly entrepreneurial in the Japanese scholar Ichisada Miyazaka recruiting international partners. Second, once called “China’s examination hell.”13 the Chinese government has committed How can students so completely focused to stunning levels of investment in the on test scores in order to enter university stem ½elds (science, technology, engi- possibly be innovators when they get neering, and medicine) and to interna- there? tional partnerships in these realms. Third, Famous American colleges and univer- leading Chinese universities are develop- sities pride themselves on their “core,” or ing American-style programs of general general education, programs, which they education and in the process have sought contend produce “leaders” who are broad- international advice, support, and models. ly educated to take on the world. None Chinese universities have long had gen- seems content to pursue the presumably eral education (tongshi jiaoyu) programs of larger market of followers. Presidents of a certain sort: for example, required class- Chinese universities have taken their es (bixu ke) in Marxism-Leninism-Mao American counterparts at their word and Zedong Thought. And like required cours- have devoted enormous effort to craft es everywhere, students loathe and endure curricula for general and liberal education them. Over the past decade, however, in a Chinese context. When Harvard Col- mainland universities, together with those lege replaced its Core Program with a new in Hong Kong and Taiwan, have competed General Education Program in 2006, its to introduce general and liberal education many curricular reports and recommen- programs that open opportunities for dations were read at least as carefully in learning across the humanities and social Beijing as they were in Cambridge, Mas- sciences. sachusetts. The idea of a “liberal education” is a con- Leading American institutions believe cept of German origin that has now estab- that for a truly liberal education, a study lished its deepest roots in North America. of the humanities is essential. Despite–

143 (2) Spring 2014 151 The or because of–a century-long obsession tral government and the party-state at Challenges with engineering, this view is shared in - various levels) and those responsible for of Higher Education creasingly today in China’s premier uni- their day-to-day operation. “Education is versities. The expansion of general educa- the cornerstone of national rejuvenation,” tion in Chinese university curricula may according to the preamble of China’s take place in new institutions (for exam- 2010 National Plan for Medium and Long- ple, Fudan College as the liberal arts college Term Education Reform and Develop- within Fudan University) or it may be ment. From the central government’s embedded in distribution requirements. perspective, education takes as its goal the Either way, it is a sign that pacesetting Chi - building of national strength, developing nese universities believe that China’s next talent for the collective good, not primar - generation of leaders should be broadly ily for individual merit. This viewpoint is educated in the humanities and social sci- in obvious tension with programs of gen- ences as well as in the sciences. In 2001, eral education at top Chinese universities Peking University inaugurated the Yuanpei that aim, like their American counterparts, Program (now Yuanpei College), named also to liberate and educate the individual to for Peking University’s famous German- be a critical thinker and an active citizen. educated chancellor of the early twentieth If the central government sees education century, the philosopher Cai Yuanpei. This as serving national strategies, making the was part of a broad reform of undergrad- best strategic use of the enormous funding uate education to foster “a new generation now coming from all levels of government, of talented individuals with higher cre- the local and provincial of½cials who are the ativity as well as international competence main funders of universities often have a so as to meet the needs of our present age.” short-term, utilitarian viewpoint. They Tsinghua University’s School of Econom- seek to spur economic growth; to enhance ics and Management, under the leadership the job opportunities of people in their late of Dean Qian Yingyi, who received his teens and twenties; and to take advantage doctorate at Harvard and holds a profes- of the cheap credit offered by state banks sorship at UC Berkeley, has implemented for the expansion of higher education. one of the most imaginative programs in If there is a “China model” for universi- liberal arts and general education to be ties, it is not a particularly socialist one. As found in any Chinese university–and this the historian Zhang Jishun, the former in a professional school. Renmin Univer- party secretary of East China Normal Uni- sity in Beijing, founded as the “People’s versity, has argued, just because enroll- University” on a Soviet model, now houses ments have grown does not mean that several of China’s leading centers for clas- access and equity have increased in equal sical studies and Chinese history. measure. Take the case of tuition. There used to be none in Chinese universities. In This is a time of investment, growth, ex - 2000, the standard tuition at public uni- perimentation, and internationalization versities was rmb 5,000 per semester. By in Chinese higher education. We have dis- 2012, it ranged from rmb 16,000 to 27,000, cussed many of its strengths. What are the with an average annual cost of US$4,500. weaknesses? This ½gure is not high by American stan- Given the size and diversity of the higher dards, but it is about 150 percent of the education sector in China, it is not sur- disposable income of rural residents. prising that there is a gulf between those And in private Chinese universities, tuition who oversee Chinese universities (the cen- can be many times higher. This has led to

152 Dædalus, the Journal ofthe American Academy of Arts & Sciences a situation in which the poorest students other mechanisms that privilege those of William C. often end up at private universities, which means and of position who went to the Kirby are the most expensive, while wealthier best schools. and well-connected students have much In short, despite the ever-larger numbers better access to elite public institutions, of applicants and students, there is grow- which are among the least expensive. ing inequality of opportunity in China’s We can see this in statistics of rural stu- institutions of higher education. The pro- dents attending Chinese universities. Na - spect of higher education has been ex - tionwide, about 50 percent of university tended to China’s new and urban middle students hail from rural families (with a class, but for the poor and the rural, oppor- generous de½nition of what constitutes a tunities remain limited. rural family), but at the elite universities Perhaps the greatest challenges to the such as Peking and Tsinghua, only about rise of Chinese universities lie in the realms 20 percent of the student body is made up of governance and politics. The hierarchi- of students from rural areas. Even in an age cal governance structures of Chinese uni - of greatly expanded university admissions, versities leave many decisions to a very few the army and public security jobs offer people. Chinese universities are overseen better means of social mobility for China’s by party committees, and the university rural and poor than do China’s mass uni- party secretary normally outranks and fre - versities. quently outflanks the president. (A few Urban-rural educational inequality, as extraordinary party secretaries are key to Martin Whyte points out in his essay in their universities’ success, but as a rule this this issue, can be measured directly in re- system of parallel governance limits rather gional terms. In recent years, the gross than enhances the flow of ideas.) Few party enrollment ratios of college-age students secretaries–like few pres idents of Ameri- in Beijing, Tianjin, and Shanghai all sur- can universities–look favorably upon the passed 50 percent. This is much higher prospect of unbridled faculty governance than the national ratio of 24 percent. In - of universities. But the freedom of faculty deed, Shanghai is already above 60 percent. to pursue ideas wherever they may lead is But in Yunnan, Guangxi, Guizhou, and Ti - essential for sustained innovation in uni- bet, the (unlikely and unrealized) goal is versities. Where, after all, do the best ideas for a gross enrollment ratio of 15 percent. come from in universities? Deans and In higher education, the disparity between pres idents everywhere must make deci- regions is not decreasing, but increasing. sions and set priorities. In practice, how- Finally, take the case of examinations ever, many of the best ideas–those that and admissions. The gaokao persists, as did deans and presidents will be compelled to the old imperial examinations, because it support on their intellectual merits–will has the appearance of rewarding merit come up from the mistakenly named “bot- and is one of the few national institutions tom”: that is, from faculty at the top of that people believe is fair and honest. In their ½elds. Having an institutional struc- principle, only the best, determined by ture to support this well is rare anywhere, competitive examination, are admitted. and in Chinese universities today it is rarer But the limitations of the gaokao have long still. By any comparative measure of lead- been known, and elite universities are the ing international universities, faculty in leaders in setting patterns for alternative Chinese institutions have little role in gov- portals of entry: through additional tests, ernance. It was not a good sign when Chi - interviews, “Olympic” style prizes, and na’s Vice President (now President) Xi

143 (2) Spring 2014 153 The Jinping visited China’s leading universities versity of California system, once the best Challenges in June 2012 to call for increased party system of public higher education in the of Higher Education supervision of higher ed ucation. world, has been weakened and made in- This leads to a ½nal challenge: can creasingly dysfunctional due to the state of “world class” universities–however they California’s budget problems. As that sys - are de½ned–exist in a politically illiberal tem declines, leading private universities system? Perhaps; but perhaps only with –the Stanfords and Harvards, for example, some signi½cant degree of autonomy. Ger - which compete with the University of Cal - man universities in the nineteenth century ifornia for faculty and graduate students had many political pressures, but they were –may in turn be less challenged. A major the envy of the world in part because they test for any institution–Chinese or Amer- also had traditions of institutional free- ican–is not how good it can be when the dom that fostered and (at times) protected money is pouring in; it is how the institu- creative thinkers. China’s universities tion reacts and adapts when it stops. This today boast superb scholars and some of has been a major trial for American uni- the world’s best students. But these stu- versities, private and public alike, after the dents are also forced to sit through re - U.S. ½nancial meltdown of 2008. Someday, quired courses in party ideology, and they surely, it will be a challenge for Chinese learn a simpli½ed book version of the his- universities as well. tory of their own country. Despite new In terms of governance, it is easy to crit- programs of general education, in the icize Chinese universities for the party realm of politics and history the distance committees that oversee and limit them. between what students have to learn in American and European universities gen- order to graduate and what they know to erally accord their faculty a large role in be true grows greater every year. This is management and an extraordinary degree why, in 2012, when students in Hong Kong of academic autonomy. But there can be were faced with the prospect of enduring political interference from legislatures and “patriotic education” as taught in main- statehouses in the working of American land China, they took to the streets. public universities as well. And how much transparency to the public is there, really, Can China lead in the global competi- in the governing boards of America’s tion of universities? The question of po- leading private universities? tential Chinese leadership in this area, as American universities have devoted in many others, is a comparative question. enormous funds and equal amounts of Who leads whom? As we have seen, in in- rhetoric in recent years to extending the ternational rankings the American sys- reach of a Yale or Michigan education to tem appears to be the most formidable. But the least advantaged, in ½nancial terms, that would not have been the case a cen- in the United States. The jury is still out, tury ago, and there is no reason to assume however, as to whether or not they are that the United States will remain in a succeeding. At present in the United States, leadership position without constant re - as in China, the major bene½ciaries of form, reinvestment, and reinvention. elite higher education remain the (already) American universities face big chal- well educated and well connected. lenges. The great public systems of higher For the moment, however, American education in the United States have un - universities still enjoy their hour in the dergone a process of slow-motion self- sun as the innovative places to educate destruction over the past decade. The Uni - leaders. After all, actual Chinese leaders

154 Dædalus, the Journal ofthe American Academy of Arts & Sciences send their children to American universi- rise and thrive simply on their own, but in William C. ties, and in increasing numbers. In the cooperation (and now competition) with Kirby 1920s and 1930s, China’s most powerful leading universities worldwide. Even as man, Chiang Kai-shek, sent his sons to the Chinese people expand their study study in the leading (if quite different) abroad, the world is coming to China. The institutions of his day: in the Soviet Union U.S. government has set a goal for one (Chiang Ching-kuo) and in Germany (Chi- hundred thousand American students to ang Wei-kuo and Tai An-kuo). Today, the study annually in China, balancing in part sons and daughters of Chinese political the nearly three hundred thousand Chi- leaders study in many American colleges nese citizens who study in the United and universities. Applications to American States. universities from China have risen tenfold We do know this: the rapid increase in in the last decade. It used to be that the the scale of Chinese higher education and Chinese students who went abroad for un- the rankings of elite Chinese institutions is dergraduate study were those who could unmatched anywhere. China’s challenges not get in to leading Chinese universities. –in access, equality, and governance–are Today, even Peking University and Tsing - the shared problems of higher education hua University–the most prestigious and everywhere. The leading American uni- connected of institutions–lose students versities have rushed to establish locations to top universities in America, Britain, and and partnerships in China. In three years, Hong Kong. Schwarzman College will open at Tsinghua Can the twenty-½rst century neverthe- University, where it will seek to attract the less be “the Chinese century” in higher best young talent in the world to study at education? It is telling that this is not a an institution originally designed to send question that could have been asked, and Chinese students away for their education. taken seriously, even a decade ago.14 But As the Rhodes Scholarship for the twenty- China’s growing strength in higher edu- ½rst century, it will endeavor to educate cation is not simply the result of the ex - scholars from around the world who have traordinary efforts and expenditures of “potential for leadership.” Surely Chinese recent years; it has been a century and universities, too, have the potential for more in the making. If the past is any guide leadership. to the future, Chinese universities will not

endnotes 1 Keith Bradscher, “$300 Million Scholarship for Study in China Signals a New Focus,” The New York Times, April 21, 2013; and “Oxford and the Rhodes Scholarship,” http://www.rhodes scholar.org (accessed June 2013). 2 Edmund J. James, “Memorandum Concerning the Sending of an Educational Commission to China” (1907), cited in Mary Brown Bullock, “American Exchanges with China, Revisited,” in Educational Exchanges: Essays on the Sino-American Experiences, ed. Joyce K. Kallgren and Denis Fred Simon (Berkeley, Calif.: Institute of East Asian Studies, 1987), 26. 3 See Qian Yingyi and Li Qiang, eds., Lao Qinghua de shehui kexue [Social Sciences in Old Tsinghua] (Beijing: Qinghua daxue chubanshe, 2011). 4 See Tang Shaojie, Yi ye zhi qiu: Qinghua daxue 1968 nian “bai ri da wudou” [A Single Leaf Heralds Autumn: Tsinghua University’s “Hundred Days of Great Violence”] (Hong Kong: Zhongwen daxue

143 (2) Spring 2014 155 The chubanshe, 2003); and William Hinton, Hundred Day War: The Cultural Revolution at Tsinghua Challenges University (New York: Monthly Review Press, 1972). of Higher 5 Education On the earlier development of a Tsinghua “clique” in politics, see Cheng Li, China’s Leaders: The New Generation (Lanham, Md.: Rowman & Little½eld, 2001), 87–126. 6 James, “Memorandum Concerning the Sending of an Educational Commission to China.” 7 Aage Krarup-Nielsen, The Dragon Awakes (London: J. Lane, 1928); Min-ch’ien T. A. Tyau, China Awakened (New York: Macmillan, 1922); James Cantlie, Sun Yat Sen and the Awakening of China (New York: F.H. Revell, 1912); William F. Burbidge, Rising China: A Brief History of China and a Biographical Sketch of Generalissimo and Madame Chiang Kai-shek (London: J. Crowther, 1943); and Arthur Judson Brown, New Forces in Old China: An Unwelcome but In - evitable Awakening (New York: F.H. Revell, 1904). 8 Lawrence E. Grinter, ed., The Dragon Awakes: China’s Military Modernization Trends and Implica- tions (Montgomery, Ala.: United States Air Force University, 1999); C. Fred Bergsten et al., China’s Rise: Challenges and Opportunities (Washington, D.C.: Peterson Institute, 2008); Minqi Li, The Rise of China and the Demise of the Capitalist World Economy (London: Pluton Press, 2008); Robert S. Ross and Zhu Feng, eds., China’s Ascent: Power, Security, and the Future of International Politics (Ithaca, N.Y.: Cornell University Press, 2008); Karl Gerth, As China Goes, So Goes the World: How Chinese Consumers are Transforming Everything (New York: Hill & Wang, 2010); and Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New Global Order (New York: Penguin, 2009). 9 For an excellent overview of all these trends, see David A. Stan½eld and Yukiko Shimmi, “Chinese Higher Education: Statistics and Trends,” in International Briefs for Higher Education Leaders, no. 1 (2012): 5–7. On broad trends, see the annual Zhongguo jiaoyu fazhan baogao [Report on China’s Economic Development], edition 21 sheji jiaoyu yanjiuyuan (Beijing: Shehui kexue wenxian chubanshe, 2011). 10 See William C. Kirby, Michael Shih-ta Chen, Keith Chi-ho Wong, and Tracy Yuen Manty, “Xi’an International University: The Growth of Private Universities in China,” Harvard Business School Case 309-074 (2009). 11 William C. Kirby, “On Chinese, European, and American Universities,” Dædalus 137 (3) (Sum- mer 2008). 12 William C. Kirby, Nora Bynum, Tracy Yuen Manty, and Erica M. Zendell, “Kunshan, Incorpo- rated: The Making of China’s Richest Town,” Harvard Business School Case 313-103 (2013). 13 Ichisada Miyazaki, China’s Examination Hell: The Civil Service Examinations of Imperial China, trans. Conrad Schirokauer (New York: Weatherhill, 1976). 14 For a recent assessment, see Kathryn Mohrman, “Are Chinese Universities Globally Competi- tive?” The China Quarterly 215 (September 2013): 727–743.

156 Dædalus, the Journal ofthe American Academy of Arts & Sciences China & Globalization

Jeffrey Wasserstrom

Abstract: In recent decades, China has become increasingly enmeshed in global institutions and global flows. This article places that phenomenon into historical perspective via a look back to important globalizing trends of a key earlier period: the late 1800s through early 1900s. The essay draws heavily on C. A. Bayly’s discussion of that period, which emphasizes the way that moves toward uniformity do not necessarily produce homogeneity. Bayly’s work is used both to illustrate the limitations of some competing ideas about contemporary globalization and how China is or is not being transformed by it, and to provide a basis for arguing that we are again seeing, now in China, important moves toward uniformity that are not erasing important differences between cultures and countries.

How far back in time should one begin in an essay on China and globalization? The term global- ization may have gained widespread purchase in its current sense only beginning in the 1960s, but ideas, objects, and people have been circulating across the planet for millennia. This has led some analysts to identify precursors to, or even earlier stages of, globalization in eras much before our own. More- over, it is commonplace to describe China as having a very long history. And recent scholarship–on topics ranging from Silk Road travelers of the Tang Dynasty (618–907) to voyages of exploration and visits to Beijing by Jesuits during the Ming Dynasty (1368–1644)–has clearly shown that for much of that extended past, clichés of Chinese isolation and self-containment notwithstanding, China has been continually influenced by, and in turn has had a con - tinual influence on, populations and developments JEFFREY WASSERSTROM is the outside its ever-shifting borders.1 Chancellor’s Professor of History Still, given the current interest in making sense at the University of California, Ir - of China’s rise during a new stage of globalization, vine. His publications include China one historical period stands out as a particularly in the 21st Century: What Everyone Needs to Know (rev. ed., 2013), Global appealing point of departure: the mid-nineteenth Shanghai, 1850–2010 (2009), and century to early twentieth century. The appeal of Student Protests in Twentieth-Century using this period to frame contemporary dilemmas China: The View from Shanghai (1991). is twofold. First, in that era, as in ours, new tech-

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00280 157 China & nologies of communication and trans- ing powers, in short, much as China is Global - portation were sources of fascination and viewed by some in this early part of the ization concern. Second, it was a time, like the twenty-½rst century. present, when China’s place in the world The pre–World War I period, Bayly ar - was generating anxiety–though the con- gues, was on many fronts characterized by cern was primarily domestic, due to Chi - a push toward uniformity, but not homoge- na’s decline from a position of centrality, nization. Countries across the globe became as opposed to today’s international con- tightly enmeshed in an international or - cern about its resurgence. der rooted in new kinds of standardiza- British historian C. A. Bayly’s magisterial tion that decreased the variation between work, The Birth of the Modern World, 1780 places. This new order affected many do - –1914: Global Connections and Comparisons, mains, was registered in many ways, and is an ideal launching point for introducing can be appreciated through the investiga- that earlier period into a discussion of tion of many different historical develop- China’s rise and the contemporary period ments, including the founding of new of globalization. Taking the long view of kinds of globally minded organizations globalization, Bayly describes the decades and the growth of new kinds of globally leading up to World War I–during which minded events, in which countries were China’s fortunes declined dramatically as represented as homologous but distinc- the Qing Dynasty (1644–1912) suffered a tive units. The clothes worn by powerful series of losses in wars with foreign pow- men across the globe during this period is ers and struggled to contain devastating one telling example of uniformity with- domestic insurrections–as host to a “great out homogenization. In earlier periods, acceleration” of globalizing processes. elite men dressed radically different from These were not new processes, but they each other, with styles varying by location took on a decidedly modern character.2 and cultural orientation. But by the early Here, the similarities with our own era are twentieth century, men of power tended striking. Then, as now, people had an ex - to wear the same kinds of clothing, even hilarating yet worrisome sense of a world if, for example, a Japanese leader might add becoming ever more tightly intercon- a samurai sash to his frock coat and top nected, of a planet shrinking as goods, hat ensemble. people, fashions, and cultural forms, but Today as well, it is useful to see global- also violence, moved across borders in ization as leading to standardization with- novel ways and at faster speeds. Then, as out eclipsing difference. As venues that now, the leading states of the status quo emphasize both the basic homologies be - ante (Britain and France) worried (as the tween and differences among countries, United States does today) about being international expositions during the ear- displaced from their positions atop the lier period of “great acceleration” and the global hierarchy. It was a time when lead- Olympic Games today prove useful in il - ing thinkers within less powerful polities lustrating the parallels between the two viewed the rise of new powers–such as periods. The country-speci½c exhibitions Germany and Japan, as well as the United at the great World’s Fairs of the 1800s and States–with a mix of envy, concern, and early 1900s, like the opening ceremonies a desire to ½gure out how to adapt to their of contemporary Olympic Games, encour- home states the characteristics and growth aged states to present themselves as mutu- strategies of the new ascendants in the ally intelligible entities, with a similar set global hierarchy. They viewed these ris- of markers (flags of a basic shape), while

158 Dædalus, the Journal ofthe American Academy of Arts & Sciences also drawing attention to what sets them flected and carried forward what Bayly Jeffrey apart from one another (colors and sym- calls the era’s tendency toward the “bu- Wasser - strom bols on those flags). Hierarchical status reau cratization of belief.” The goal of this was also plainly marked: whether a coun- parliament was to bring together repre- try was the sort that might host a World’s sentatives of the world’s “ten great reli- Fair or simply host an exhibition at one; gions” who would together explore the and whether a country’s exhibition includ- characteristics that these creeds held in ed its manufactures and machines (signs common, as well as the features that made of power and often military might, with them distinctive.3 Christianity, Judaism, large artillery pieces, for example, among Islam, and Zoroastrianism were represent- the objects displayed) or simply included ed, in addition to six other creeds, all with its handicrafts and antiquities (a sign of a Asian roots. Among these was Confucian- lower place in the global order). ism, which has long de½ed easy classi½ca - The great international expositions were tion as either a religion or a philosophy, but initially held only in the leading Euro- was then, in fact, designated as a religious pean capitals, but by the late nineteenth faith by influential ½gures in the novel ½eld century, the United States was taking the of religious studies.4 occasional turn at hosting full-fledged Prior to the late nineteenth century, World’s Fairs. At this time, Japan also some of these ten spiritual schools lacked began holding smaller-scale exposition many of the features that we now associate events, becoming the ½rst non-Western with leading religions. Not all were orga - country to do so and the ½rst Asian country nized around clearly speci½ed canonical to be represented by its advanced manu- texts, nor did they all have recognizable factures, as opposed to simply its exotic hierarchies of leaders. But just as countries wares. When the United States hosted were expected to present themselves in World’s Fairs, it generally followed the mutually recognizable ways, religions were template established by the exposition pushed toward standardization. Religious spec tacles staged in Europe, but it also ex - traditions associated with the leading glob- perimented by adding novel features, il- al powers set the model for what a “prop- lustrating one of the many ways that rising er” system of belief was supposed to con- powers both adapt to and leave their mark sist of; thus, Hinduism and Buddhism, on the global order. which had been structured quite differ- The ½rst major non-European World’s ently from one another and from Chris- Fair, the Philadelphia Centennial Exhibi- tianity, made moves to be less completely tion in 1876, was the largest event of its out of step with European expectations. kind ever held in any country, signaling Representatives also made efforts to bring an American ambition not simply to fol- Confucianism in line with expectations low in the footsteps of London and Paris, for a standard “religion,” even though it but to do things on an even greater scale, may have been better classi½ed as a philo- in turn inspiring others to borrow from sophical tradition or secular school of the American playbook. Of particular in - thought.5 These “world religions” remain- terest to Bayly, however, is the second great ed different from one another in beliefs, American World’s Fair: the 1893 Co- but became increasingly homologous in lumbian Exposition. The “World Parlia- form, with their core “sacred” texts likened ment of Religions,” held in conjunction to the Bible (even if, as in the case of Con- with the Columbian Exposition, was a nov- fucianism, these texts stressed the need elty of this World’s Fair, an event that re - to focus on concerns of this world), their

143 (2) Spring 2014 159 China & leaders at times referred to as “priests,” they wanted to adopt and others they Global - and their ritual spaces dubbed “temples.” wanted to avoid. Signi½cant to our dis- ization The ways in which states organized cussion, much of the Japanese model of them selves politically tell a similar tale, selective adoption and internal adaptation and also remind us that as new powers can now be said of contemporary China. rose, ½tting into global patterns while maintaining distinctive elements, the Though these speci½c details of Japan’s number of possible models to emulate emergence as a world power with a dis- increased. Just as the United States pro- tinctive identity may be new to some read- vided a model for hosting international ers, the lessons I have drawn–that there events that could inspire imitation, Ja- is value in looking back at the preceding pan’s remaking of its political order, via a century or two when trying to make sense mix-and-match approach that both bor- of the present, and that rising powers rowed from the outside world and adapt- both adapt to and play a role in reshaping ed from its own distinctive past, offered a international systems–are common sense. possible script upon which other states Curiously, however, the approach outlined could improvise. Japan’s rise toward above is revisionist, going against the world power status was facilitated by its grain of both an influential theoretical adoption of a constitution and its reor- approach to globalization (with implica- ganization of its educational and military tions for understanding China’s rise) and systems, undertakings that sometimes an influential way of thinking about China drew heavily from what one or more West- (with implications for understanding ern countries had done before. The result globalization). This influential concep- was something unique on the world stage, tion of globalization emphasizes the im - both because of how imported elements portance of the end of the Cold War and were combined and because of the carry- the birth of the Internet, suggesting that over of elements from the Japanese impe- only events that took place within the last rial line. three decades really matter. The influen- When Japan began to be recognized by tial approach to understanding modern the European powers and the United States China, meanwhile, presumes that with as a nation that deserved a seat on leading this peculiar “ancient” country, it is cru- international bodies and as a military and cial, when using history to frame our view economic force to be reckoned with– of the present, to go back millennia, not especially after it defeated Russia in 1905 just a century or even several centuries to in the Russo-Japanese War–the Japanese the Song Dynasty (760–1279) or the Ming model began to interest leaders and think- or early Qing Dynasties–all points that ers in many countries outside of the West, some scholars of China point to as the a phenomenon explored most recently in birth of China’s modernity. This ancient- essayist and novelist Pankaj Mishra’s From minded approach is often invoked by writ- the Ruins of Empire.6 As that work reminds ers who worry that China will soon “rule us, the story of Japan’s rise was one of the world” (to borrow a phrase from a re- adapting to, but also in the process influ- cent bestseller), or will do so unless de - encing, the global order. When other coun- termined interventionist action is taken tries looked to Japan for inspiration, they to prevent it. Using a famous writer to rep- often did so in the same kind of mix-and- resent each approach (for convenience’s match manner that Japan had used to look sake), I will refer here to the Friedman Fal- toward the West, identifying features lacy and the Kissinger Confusion as two mis-

160 Dædalus, the Journal ofthe American Academy of Arts & Sciences leading schools of thought about China son: the views of the two authors overlap Jeffrey and globalization that put undue emphasis with those of other influential writers on Wasser - strom on very recent trends and millennia-old the subjects of globalization and China. patterns, respectively. When Friedman posits an epochal shift Why Thomas Friedman and Henry Kis- in world affairs beginning in 1989, and singer? Each is proli½c, widely read, and foretells mass convergences for countries often cited in general interest publications that formerly took divergent paths, we and even at times in scholarly ones. In the can hear a clear echo of political scientist 2005 Wired magazine pro½le “Why the Francis Fukuyama’s “end of history” for- World Is Flat,” Daniel H. Pink describes mulations. Similarly, Friedman’s “flat Friedman as the “most influential Amer- world” visions of a seamless melding of ican newspaper columnist since Walter once very different cultures align with Lippman.”7 Kissinger, meanwhile, is wide- arguments made in such works as China ly acknowledged by critics and supporters scholar Edward Steinfeld’s Playing Our alike as a singularly powerful voice within Game and the earlier, less sophisticated the U.S. policy establishment. Friedman’s work of political scientist Bruce Giley, Chi- most famous book, The World is Flat, has na’s Democratic Future.11 Nor is Kissinger’s sold more copies in its many editions and emphasis on ancient history and “The Sin- translations than any other book on glob- gularity of China” (the title of On China’s alization. His two previous, closely related opening chapter) entirely original. His books also sold well.8 Kissinger’s most re- view dovetails with the vision that under- cent book, On China, has also enjoyed very girds former Nixon staffer Stefan Halper’s high sales ½gures, and is one of the princi- The Beijing Consensus: How China’s Authori- pal works that generally educated readers tarian Model Will Dominate the Twenty-First are most likely to consult before taking a Century–a fearful book about a future of ½rst trip to China. Chinese domination, which comes with Friedman and Kissinger are also extraor- an endorsement by Kissinger–and with dinarily well known and influential within political scientist Samuel Huntington’s China. They are among the Americans The Clash of Civilizations.12 most often quoted in the Chinese media, In a chapter titled the “New System,” and Chinese bookstores stock not only featured in his work The Lexus and the Olive translations of their books, but also sec- Tree: Understanding Globalization, Fried- ondary works, often by academics, that dis- man offers a clear sense of the Friedman cuss the texts and their ideas. Kissinger Fallacy: has been famous in China since he accom- Globalization is not just an economic fad, panied Nixon there in the early 1970s, and and it is not just a passing trend. It is an in - he continues to meet periodically with Chi - ternational system–the dominant interna- na’s current leaders and visit its retired tional system that replaced the Cold War sys- elder statesmen.9 Friedman’s standing in tem after the fall of the Berlin Wall.. . . [T]he China, though of more recent vintage, Cold War system was dominated by one attracted global attention when reporters over-arching feature–division . . . [and] was for the Economist traced the likely role that symbolized by a single word: the wall–the a Friedman column had played in Presi- Berlin Wall. . . . The globalization system . . . dent Xi Jinping’s choice of the “Chinese also has one overarching feature–integra- Dream” for his ½rst major public slogan.10 tion. . . . The globalization system is also The Friedman Fallacy and the Kissinger characterized by a single word: the Web.. . . Confusion also matter for another rea- [W]e have gone from a system built around

143 (2) Spring 2014 161 China & divisions and walls to a system built in- [T]his phenomenon we call “globalization” Global - creasingly around integration and webs.13 –the integration of markets, trade, ½nance, ization information and corporate ownership In his later books, Friedman returns to around the globe–is actually a very Amer- this same view of globalization. In Longi- ican phenomenon: it wears Mickey Mouse tudes and Attitudes, after making a near- ears, eats Big Macs . . . tracks its investments identical argument to that quoted above, with Merrill Lynch using Windows 95. . . . he writes that he is a “big believer in the [C]ountries that plug into globalization are idea of the super-story,” by which he really plugging into a high degree of Amer- means a tale that serves as a framework icanization.14 for making sense of the world (what aca- demics sometimes call a “grand narra- Friedman does not posit easy, swift, tive”). Friedman makes it clear that he and complete Americanization, but he perceives a key super story in the rapid and does think in terms of an overall trend in epochal shift now under way. This shift is that direction. This vision colors even his due to a mixture of geopolitical changes, criticisms of the United States, as illus- especially resulting from the Soviet em - trated by the very title of his recent book, pire’s collapse, and the development of That Used to Be Us: How America Fell Behind new technologies, especially the Internet. in the World It Invented and How We Can Come The World is Flat insists that Cold War as - Back. When writing on China, he notes the sumptions instantly became outmoded irony of now having to cross the Paci½c to when the Berlin Wall fell, and that an in - ½nd the kind of ambitious can-do attitude exorable trend toward convergence started and tendency to think big that formerly to trump heterogeneity, as exempli½ed by de½ned the United States, and cites ex - global chains serving interchangeable amples of Chinese appropriation of once Big Macs. distinctively American processes and in- The implications of this framework for dustries.15 thinking about China and globalization But what’s wrong with this picture? are twofold. First, there is no need to go Many things, as it turns out. Post–Cold back any further than 1989 to understand War developments do not represent the contemporary issues. Second, while every complete and radical departure from all state is bound to become part of the new previous geopolitical trends, as Friedman global order in a distinctive manner, the suggests they do. Even the Internet is not zeitgeist will make China, like all other completely without precedent, given how countries, more and more like other the telegraph was ½rst announced as a me - nations, and in particular more like the dium that “annihilated” time and space. United States. The Internet is not the sole Consider, for example, how Prince Albert’s driver of this process–Friedman allows 1850 speech promoting the upcoming for assists from jet plane travel, outsourc- Crystal Palace Exhibition, the ½rst great ing, FedEx, and other global connectors World’s Fair, reads today like an outline –but he sees the Internet as the new sys- of a Friedman column: tem’s emblematic technology, just as free Nobody . . . who has paid any attention to market capitalism is its de½ning economic the particular features of our present era, practice. Friedman knows local differences will doubt for a moment that we are living will persist, but emphasizes a kind of in a period of wonderful transition. . . . The homogenization that should come with a distances which separated the different na - “Made in the usa” logo: tions and parts of the globe are gradually

162 Dædalus, the Journal ofthe American Academy of Arts & Sciences vanishing before the achievement of mod- lists–of Filipino, Japanese, British, and Jeffrey ern invention, and we can traverse them American influences, and indeed African Wasser - strom with incredible ease . . . thought is communi- influences as well. cated with the rapidity and even by the pow - er of lightning . . . the products of all quarters Turning to the Kissinger Confusion, we of the globe are placed at our disposal.16 see that he is attracted by a different The Friedman Fallacy also challenges super-story, at least about China. His On us to understand why so many countries China encourages readers to be deeply have resisted the wholesale embrace of skeptical about the Chinese state’s poten- the allegedly natural and inevitable free- tial to become easily integrated into any market principles of the United States. global order not of its own creation. This One can even identify a bloc–admittedly is due to its deep indebtedness to speci½c one quite different from the Cold War vin- ideas, many tied to Confucianism (or Kis- tage, given the lack of professed allegiance singer’s conception of that creed), that to a formal ideology–that stands apart keep China not just distinctive, but radical- from the type of liberal free-market trends ly so. To Kissinger, the country has always Friedman seeks to chart and champion. stood apart and always will. The issue be- This at least is one way to read American comes one of managing this difference, journalist William J. Dobson’s impressive not expecting it to disappear or even to book, The Dictator’s Learning Curve.17 And lessen dramatically on account of the In - when it comes to the Internet in particu- ternet, a rising middle class, or any other lar, that bloc is de½ned not just by webs, factor. Rather than wait for China to be but also walls–the ½rewalls that limit reshaped by globalization, the goal should worldwide digital connectivity not just be to minimize the likelihood that China within China, but also within other author- will take charge of de½ning the interna- itarian countries.18 tional order. Even China’s shift to Com- There is a rich literature that, contra munist party-state rule is seen by Kis- Fried man, questions the notion that a Big singer as in some senses epiphenomenal, Mac is a Big Mac is a Big Mac, given how due to the number of assumptions con- vastly different the menus and meanings temporary Chinese leaders share with of the Golden Arches become as they trav- their predecessors, including an unusually el.19 Cultural globalization is about hybrid intense familiarity and identi½cation with forms, as opposed to simple American- the ancient past. ization, meaning a more apt symbol for To illustrate this, Kissinger analyzes one twenty-½rst-century globalization than of Mao’s speeches addressed to a gather- the McDonald’s franchise might be the ing of high-level cadres. Kissinger notes karaoke bar, which arrived in China that despite Mao’s party’s of½cial view that around the same time as McDonald’s. the pre-revolution past was to be discred- While karaoke bars rarely get the same ited and forgotten, when the Chairman media attention as the burger behemoth, needed to convey a strategic point, he was there are now many more locations in wont to refer to ancient battles in China’s China to sing karaoke than there are to history. What lesson does Kissinger draw order a Big Mac. McDonald’s outlets have about China’s singularity from this kind American roots, but karaoke bars have a of behavior? more complex origin story that speaks In no other country is it conceivable that a more effectively to our era: they bear traces modern leader would initiate a major –via their organization, look, and play-

143 (2) Spring 2014 163 China & national undertaking by invoking strategic tage point from which to see the relation- Global - principles from a millennium-old event– ship between China and contemporary ization nor that he could con½dently expect his globalization in a new way. We can ap - colleagues to understand the signi½cance of preciate traits that today’s China shares his allusions. Yet China is singular. No other with the United States and Japan of a cen- country can claim so long a continuous civ- tury ago, especially when it comes to Chi - ilization, or such an intimate relationship to na’s adaptation to and impact on interna- its ancient past and classical principles.20 tional practices, as well as the way that other countries look to it less as a model One problem with the Kissinger Con- for wholesale emulation than as a state fusion is that those in its sway tend to from whose toolkit it may be worth selec- ignore evidence that might contradict the tively borrowing. We can also see some view that China’s distant past has left it recent moves made by the Chinese state with a “cultural dna” that is virtually im - as a re start of abortive processes that pervious to change.21 In On China, for ex - began to transform the country during ample, Kissinger mentions but dismisses the late 1800s and early 1900s. the relevance of Zhou Enlai (the ½rst pre- First, take the idea of a Chinese “presi- mier of the People’s Republic of China) dent,” past and present. China’s ½rst pres- telling him that the United States should ident, Sun Yat-sen, was a poster child for be seen as an older country than China, his era in many ways. Sun’s political life since China’s current political incarnation depended on new modes of transporta- goes back only to 1949. Those who focus tion and communication that allowed him on China’s supposedly “singular” cultural to travel between China, Japan, and the dna gloss over the fact that, while the West to raise funds, and also let him cir- mainland and Taiwan had strikingly sim- culate his ideas with expedience via tele- ilar political cultures circa 1960 (they graph wires. As the country’s ½rst post- even shared a cult of personality around dynastic leader, Sun took on an imported Chiang Kai-shek, the former president of moniker, that of president, which brought the Republic of China), within a few de - him in step with political trends of the day cades, the island country had become a for the heads of new nations, as the Re - lively democracy, while the mainland re- public of China (established in 1912) was tained its Leninist political system. As for then. Sun also participated in an inaugu- Kissinger’s interpretation of the suppos- ration ceremony that borrowed heavily edly singular ability of Chinese leaders to from Western traditions of political ritual. make use of analogies from the distant Yet one of his earliest acts was to visit the past, Mao’s reaching back more than a graves of the emperors of the Ming Dy - millennium for a tale that would make a nasty, the last ethnically Han Chinese readily understood strategic point brings rulers of the country. Through this act, he to mind obvious counter-examples. For symbolically tied himself to a past Chi- one, Mao’s Western counterparts could nese group that had been overthrown by just as easily refer to “Trojan Horse” the Manchus of the Qing, thus acknowl- strategies and take for granted that every- edging and capitalizing on the role that one in the room would get the point. anti-Manchu passions, as well as globally circulating republican ideas, played in What do we gain by casting off the dis- bringing him to power. torting lenses of the Friedman Fallacy and Chinese radicals of Sun’s day were in - the Kissinger Confusion? We gain a van- spired by many domestic and international

164 Dædalus, the Journal ofthe American Academy of Arts & Sciences precedents, citing parallels for their cause tion was aided by the fact that Sun, just be- Jeffrey in the actions of rebels who had challenged fore his death in 1925, had overseen an al - Wasser - strom unjust dynasties in China, the French in - liance of the Communists and the Nation - surgents of 1789, and other revolutionaries alists, and had expressed admiration for with righteous causes. Particularly popu- the Soviet Union. The link to Sun was re - lar among Chinese radicals were analogies inforced sartorially, via people of all walks to either the revolution the American col - of life wearing the type of suit he promoted onists waged against Britain in 1776, –though small alterations were made to which led to the formation of a new re - the design in Mao’s day, and Soviet sarto- public, or the efforts that led to Japan’s rial styles also later made their mark.23 Meiji Restoration, which resulted in the It is typical now to see China’s political creation of a constitutional monarchy. system as an outlier–sticking to Commu- Sun, while admiring of Japan, relied prima- nist Party rule at a time when it had been rily on analogies with the American Rev- abandoned by all but three other coun- olution, and was sometimes called his tries–yet Sun reminds us that this is the country’s answer to George Washington. case only in some regards. In Mao’s China, The constitution of Sun’s new republic the powerful did not dress like their coun- featured some elements that were homol - terparts in other parts of the world, nor ogous to sections of the U.S. Constitution; was “president” or “premier” the desig- but it also described a system of govern- nation of the country’s leader. Flash for- ment with ½ve branches, two of them tied ward to the present, and we ½nd a new set to China’s unique past. So in its very of moves toward uniformity without eclecticism, the Chinese constitution also homogeneity leaving their imprint on Chi- paralleled the new constitution that Japan na’s political system. For the last two de - had adopted, exhibiting Bayly’s underly- cades or so, China’s most powerful men ing theme of moving toward uniformity (the holders of top posts have overwhelm- without homogenization. ingly been male) have dressed just like Sun’s eclecticism even showed through their counterparts in most other coun- in his choice of clothing. Early in his po - tries.24 And the top Chinese leader, while litical career, he conformed to global still holding the post of General Secretary norms, dressing for major political rituals of the Communist Party, is routinely re - in the sort of suit expected of powerful ferred to as the country’s “president” (we men of the time, often accompanied by a do not often hear of “Chairman Xi”). Even top hat. Later, however, Sun championed Mao’s appearance on Chinese banknotes, what he saw as a distinctively Chinese yet frequently cited as evidence of China’s modern form of apparel. What is now inability to move decisively away from its called a “Mao Suit” is actually an adapta- outlier past, has in some ways conformed tion of what was once called the “Sun Yat- to international norms. The faces of past sen Suit”: a form of dress that was influ- leaders grace the currency of many mod- enced by a mix of Western and Asian mod- ern countries; the currency in Mao’s own els, bearing, for example, some links to the day, which featured anonymous repre- student uniforms worn in Japan.22 sentatives of ethnic or other social groups, When the People’s Republic of China was more unusual. was founded in 1949, its leaders claimed that they, not Chiang Kai-shek and his Na - My second set of comments relates to tionalist Party across the strait, were the global spectacles, in particular China’s true inheritors of Sun’s legacy. This asser - hosting of the 2008 Olympics. In the

143 (2) Spring 2014 165 China & lead-up to that event, the potential for the revival in a different light, however, let us Global - Olympics to bring China into step with look back to the 1893 World Parliament of ization global norms was a source of lengthy dis- Religions, as well as to a 1902 story frag- cussion, though from the beginning, Susan ment by Liang Qichao, often described as Brownell, a prominent scholar of Chinese the leading Chinese intellectual of that era. sports and the Olympic Movement, sug- In Liang’s story “The Future of New gested that rather than only asking “how China”–which was inspired in part by the Olympics will change China,” we the 1893 Parliament of Religions as well should also question “how China will as an awareness that Japan’s rise above change the Olympics.” In the end, Brownell China in the global hierarchy had been proved prescient, as there are ways in marked, among other causes, by its in- which China both conformed to expecta- creasingly signi½cant role in various in- tions for a host country and altered ex- ternational organizations and spectacles pectations for future Summer Games, of various kinds–Liang imagines a future raising the bar for eye-popping high-tech when China’s status as a world power performances in the games’ opening cer- would allow it to host, rather than merely emony, for example. This unusually brash participate in, a World’s Fair. He describes Olympics, followed by China holding its such a Chinese-run international exhibi- ½rst World’s Fair in 2010 (which was the tion taking place in Shanghai in 1962, fea- biggest event of its kind to date), brings turing elements of the World Parliament to mind America’s bold entrance into the of Religions, such as a lineal descendant club of international exhibition-hosting of Confucius addressing dignitaries and countries in the late 1800s. These modern thinkers from across the globe.25 events in China also stirred the global Liang clearly foreshadowed what would imagination in ways that paralleled Japan take place during the next great accelera- during its own period of great acceleration. tion. At the World Parliament of Religions, Japan’s surge inspired a desire among a kind of revamped Confucianism 2.0– other ambitious peoples to borrow tricks made as legible as possible to religious from the Japanese approach, even if the leaders in the West–took its place among aim was not strictly to mirror Japan’s path, a family of spiritual creeds in a robustly as was the case with Chinese revolution- international setting. Over a century later, aries wishing to modernize their country the opening ceremonies of the 2008 Olym - in a Japanese fashion without introducing pic Games were, in part, a chance for China a Meiji-style constitutional monarchy. And to give global audiences a sense of a Con- for all the talk of a “Chinese model” today, fucianism 3.0, of½cially de½ned not as an it is important to consider an example like indigenous religion (the status accorded Brazil, which in hosting the World Cup in to Daoism) but as a philosophy and a sym- 2014 and the Summer Olympic Games in bolically potent state ethos. The event 2016, will ½nd much to emulate in China’s began with a quote by the sage himself, handling of the global spotlight in 2008, now cast as a secular but revered embod- without necessarily reproducing China’s iment of national wisdom whose views do political disposition. not contradict those of the development- Finally, let us consider the current re - driven Communist Party, which until the vival of Confucianism, which would seem 1970s had reviled Confucius as a feudal to add force to the argument that all Chi- ½gure whose ideas were largely responsible nese state actions are rooted in the dis- for the country’s backwardness. One part tant past. To begin to see the Confucianist of the lavish performance that followed

166 Dædalus, the Journal ofthe American Academy of Arts & Sciences featured a large number of actors onstage current era as they pertain to both global- Jeffrey dressed as Confucius’s disciples. Confu- ization and China. For example, the un- Wasser - strom cius’s new status in the People’s Republic precedented degree to which educational of China–which dovetails with the way institutions have become globally minded he has been or still is venerated in Taiwan would need to be addressed. So, too, would and Singapore–has also been marked in the related phenomenon of an unprece- other ways, most notably in the founding dented number of Chinese people spend- of state-supported and controlled “Con- ing time abroad, whether as tourists, as fucius Institutes” in foreign countries. workers, or perhaps most signi½cantly, as When searching for meaning in the Con- students; the paths taken abroad by all fucius Institutes, as with so many topics these Chinese citizens could affect the associated with China and globalization, country in profound ways. And there are we should not choose between thinking several important questions about how only in terms of the distant past or another modern China’s rise to global power time frame, nor should we choose between should be contextualized. For example, thinking of the Chinese state as only either contrast the United States, whose rise to being reshaped by international forces or global dominance was without precedent itself reshaping the global structure. We in North American history, with China, are instead better off drawing from all of which can be seen as reclaiming a position these perspectives at once. Confucius is a of influence it once had but then lost. ½gure from the distant past, but he has My relatively modest aim here has been gone through reinventions before, with the to show how focusing on one particularly most recent precon½gured not only by Li - interesting medium-term historical frame- ang Qichao’s work of speculative ½ction, work, in addition to presenting the Chi- but also by Chiang Kai-shek’s celebration nese state as both a shaper of the global of “Confucian values” in his New Life order and an entity being reshaped by it, Movement of the 1930s. Confucius is a takes us much further toward an accurate Chinese ½gure, but in classic uniformity- view of the contemporary terrain than without-homogeneity fashion, Confucius Friedman’s riffs on Beijing Big Macs or Institutes are modeled in part on what Kissinger’s wonderment at Mao’s knowl- Western nations, such as Germany via its edge of ancient battles. China’s rise is one Goethe Institutes, have accomplished in of the most important and complex sto- the arena of nationally minded cultural dis - ries of our time, and there are parts of this semination. In addition, Confucius Insti- tale that are truly unprecedented. Making tutes bear the influence of recent efforts sense of this critical and intrinsically fas- in Singapore–a country whose economic cinating tale is likely to remain one of the success and political stability has been ad- great intellectual challenges of our time. mired by Chinese leaders–to combine ap- This essay, if successful, will not have peals to traditional “Asian values” with provided a magic key for unraveling the authoritarian politics, in a setting where mysteries involved in its telling. Rather, it the Internet is de½ned by walls as much will have clearly shown how focusing too as by webs. tightly on the novelty of the now, or as - suming that all the answers lie in the dis- This essay is not meant to offer a com- tant past and its imagined hold of ancient plete alternative vision of China and glob - patterns on a fast-changing present, is to alization. To do that, much more would distort the story we seek to bring into need to be said about the novelties of the focus.

143 (2) Spring 2014 167 China & endnotes Global - 1 ization Two appealing introductions to China’s past that emphasize far flung geographical connec- tions and encourage a long view of globalization are Joanna Waley Cohen, The Sextants of Beijing: Global Currents in Chinese History (New York: Norton, 2000); and James Millward, The Silk Road: A Very Short Introduction (New York: Oxford University Press, 2013). 2 C. A. Bayly, The Birth of the Modern World, 1780–1914: Global Connections and Comparisons (London: Wiley-Blackwell, 2003). 3 On the Parliament of Religions, see the documents, including texts of the speeches given by representatives of different creeds, gathered together online at http://www.parliamentof religions.org/_includes/history/archive.swf (accessed July 23, 2013). 4 For background on the debates over how Confucianism should be classi½ed, as well as references to important late nineteenth-century and early twentieth-century works on comparative reli- gion, such as those of sociologist Max Weber, see Anna Sun, Confucianism as a World Religion: Contested Histories and Contemporary Reality (Princeton, N.J.: Princeton University Press, 2013). 5 Moves toward making Confucianism conform more closely to a standard “religion” include terminological efforts, such as translations of the Analects that dubbed it one of China’s key “sacred” texts, as well as abortive efforts in the late 1800s and again in the early 1900s, most famously by the Chinese scholar Kang Youwei, to transform Confucianism into a state religion with parallels to Christianity in form and Japan’s Shinto in function. On these efforts and the resistance to them, see Sun, Confucianism as a World Religion; and Yong Chen, Confucianism as Religion: Controversies and Consequences (Boston: Brill, 2013). 6 Pankaj Mishra, From the Ruins of Empire: The Intellectuals Who Remade Asia (New York: Farrar, Straus and Giroux, 2012). 7 Daniel H. Pink, “Why the World Is Flat,” Wired, May 2005, http://www.wired.com/wired/ archive/13.05/friedman.html (accessed May 29, 2013). 8 Thomas Friedman, The Lexus and the Olive Tree (New York: Farrar, Straus and Giroux, 1999); Thomas Friedman, Longitudes and Attitudes (New York: Farrar, Straus and Giroux, 2002); and Thomas Friedman, The World is Flat (New York: Farrar, Straus and Giroux, 2005). 9 In April of 2013, for example, Kissinger met with current President Xi Jinping, and then in July of the same year, he met with former President Jiang Zemin. 10 “The Chinese Dream: The Role of Thomas Friedman,” The Economist, May 6, 2013; http:// www.economist.com/blogs/analects/2013/05/chinese-dream-0 (accessed June 3, 2013). 11 Bruce Gilley, China’s Democratic Future (New York: Columbia University Press, 2005); and Edward Steinfled, Playing Our Game: Why China’s Rise Doesn’t Threaten the West (New York: Oxford University Press, 2012). 12 Juan Pablo Cardenal and Heriberto Araujo, China’s Silent Army: The Pioneers, Traders, Fixers, and Workers Who are Remaking the World in Beijing’s Image (New York: Crown, 2013); and Stefan Halper, The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century (New York: Basic Books, 2010). Contrast the ½nal words of the subtitle of Cardenal and Araujo’s work (“remaking the world in Beijing’s image”) with the ½nal words of Halpern’s (“authoritarian model will dominate the twenty-½rst century”). See also Perry Anderson “Sinomania,” London Review of Books 32 (2) (January 2010), which includes a review of Martin Jacques, When China Rules the World: The End of the Western World and the Birth of a New Global Order (New York: Penguin, 2009). 13 Friedman, The Lexus and the Olive Tree, 7–9. 14 Thomas Friedman, “Big Mac II,” The New York Times, December 11, 1996, http://www .nytimes.com/1996/12/11/opinion/big-mac-ii.html (accessed May 29, 2013). 15 Thomas Friedman and Michael Mandelbaum, That Used to be Us: How America Fell Behind in the World It Invented and How We Can Come Back (New York: Picador, 2011). See also Fried-

168 Dædalus, the Journal ofthe American Academy of Arts & Sciences man’s use of quotations in his work, such as this, from author Joe Romm: “China is going Jeffrey to eat our lunch and take our jobs on clean energy–an industry that we largely invented,” Wasser - quoted in Thomas Friedman, “Our One-Party Democracy,” The New York Times, September strom 8, 2009, http://www.nytimes.com/2009/09/09/opinion/09friedman.html?_r=2&. 16 Quoted in The Economist, March 23, 1850, 310. 17 William J. Dobson, The Dictator’s Learning Curve (New York: Doubleday, 2012). 18 It seems likely that these ½rewalls will become even sturdier, and not only in China, given recent accusations and leaks concerning cyber espionage against and by the United States. 19 James L. Watson, ed., Golden Arches East: McDonald’s in East Asia, 2nd ed. (Stanford, Calif.: Stanford University Press, 2006). 20 Henry Kissinger, On China (New York, Penguin Press, 2011), 2. 21 This term even shows up in very sophisticated works, such as David Shambaugh’s China Goes Global: The Partial Power (New York: Oxford University Press, 2013); a work that, overall, takes a much more nuanced approach to Chinese continuities than does On China, yet at times falls into the trap (as political scientist Lucian Pye, who Shambaugh cites approvingly, often did) of presenting the country as having a political culture virtually impervious to change, with features hard-wired into its dna. Another admirable recent work, which refers to dna in a similar fashion and alludes to a recessive “Confucian gene” that colors the ideas of important Chinese thinkers, is Orville Schell and John Delury, Wealth and Power: China’s Long March to the Twenty-First Century (New York: Random House, 2013). 22 On Sun Yat-sen, see Henrietta Harrison, The Making of the Republican Citizen (Oxford: Claren - don, 2000); Joseph Esherick, “Founding a Republic, Electing a President: How Sun Yat-sen Became Guofu,” in China’s Republican Revolution, ed. Harold Shiffrin and Eto Shinkichi (Tokyo: University of Tokyo Press, 1994): 129–152; and especially David Strand, An Un½nished Republic: Leading by Word and Deed in Modern China (Berkeley: University of California Press, 2011), 33–35 (which notes Sun’s dress) and p. 205 (which notes various Chinese senators wearing Western- style dress in 1912). 23 See the illustrated discussion “Mao Suit,” provided by the Powerhouse Museum, http://www .powerhousemuseum.com/hsc/evrev/mao_suit.htm (accessed July 22, 2013). 24 For more details on the symbolism of clothing in recent meetings between Chinese and foreign leaders, see Jeffrey Wasserstrom, “What Obama and Xi’s Shirt Sleeves Summit Means,” His- tory News Network, June 17, 2013, http://hnn.us/articles/what-obama-and-xis-shirt-sleeves -summit-means (accessed July 23, 2013). 25 On Liang Qichao’s story, see John Fitzgerald, “The Un½nished History of China’s Future,” Thesis Eleven, May 1999, 17–31.

143 (2) Spring 2014 169 Local Governance in China: Incentives & Tensions

Joseph Fewsmith & Xiang Gao

Abstract: China faces major challenges from social instability and general societal disaffection, which have continued to grow even as the economy has developed. In recent years, the Chinese government has tried to address such issues by diverting increasing resources to raising the income of villagers and pro- viding social services to the urban and rural population alike. So why have “mass incidents”–public protests that sometimes turn violent–continued unabated? This article argues that the structure of central- local relations leads local governments to discount the interests of residents on the one hand, and distort central policies to the bene½t of the local government on the other. The “party manages the cadres” principle, through which the central government exerts vertical control, prevents horizontal and bottom-up ac - countability, and thus ends up setting the interests of local cadres against those of local residents. The central government’s interest in preserving its own power makes it reluctant to reform the central-local relationship, thus perpetuating crises.

Relations between central and local governments are increasingly seen as critical both for governance issues and for economic development. Overly cen- tralized states pose the threat of killing market in - centives and dampening economic development, whereas overly decentralized states risk stifling eco- nomic development through cronyism and some- times predatory behavior.1 A combination of a Weberian-style central bureaucracy and a decentral- ized political system is generally recognized as con- ducive to good governance.2 But the question is not simply one of centralization versus decentralization, as important as that discus- JOSEPH FEWSMITH is Professor sion may be; rather, the question is also one of how of International Relations and Po - local governments are nested within hierarchical litical Science at Boston University. political systems. For instance, Brazil’s political sys- XIANG GAO is a lecturer of Public tem has historically been characterized by extreme Administration at Zhejiang Uni- decentralization; a tradition that resumed in the versity. 1980s following the nation’s return to democracy, (*See endnotes for complete contributor much to the detriment of coherent policy-making biographies.) and economic growth.3 In contrast, contemporary

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00281 170 India has a highly centralized bureaucracy, rewarding decentralization. The system Joseph though individual states have been em - of ½scal contracting (caizheng baogang) al- Fewsmith & Xiang Gao powered to set economic policy within lowed the provinces, particularly Guang- their regions. Some states have lobbied dong and Fujian (which struck better deals New Delhi for investment and have moved with the central government), to remit a ahead economically, whereas others have ½xed amount of revenue to the center for pursued oppositional strategies, bolster- a speci½ed period of time. This system in - ing the popularity of local politicians but centivized provinces, and below them falling behind economically.4 Under the counties and townships, to maximize rev - Partido Revolucionario Institucional (pri), enue by allowing them to keep any rev- Mexico had a highly centralized govern- enue collected above the amount owed to ment, but also a patrimonial bureaucracy the central government. Thus, it encour- that was not conducive to rapid economic aged localities to increase economic pro- growth. Decentralization reforms in recent duction. The southeast province of Guang- years, however, have brought about better dong was in an especially good position, governance in Mexico, if not greater in- being geographically located next to Hong come equality.5 Kong and also the native home of many Over the past three decades, China has of its residents. The province offered fa - developed extremely rapidly, averaging vorable terms for investors from Hong nearly 10 percent growth by gdp per year. Kong, who were then facing rising labor Built around a revolution-era mobiliza- costs, and thus Guangdong managed to tional party system that combines strong move, in East Asia scholar Ezra Vogel’s centralism and local initiative, China’s po- terms, “one step ahead.”8 litical system seems to have developed a As this short summary suggests, there strong mix of capable leadership at the are two critical linkages binding central center and incentives for building “devel- and local authorities in China: the party opmental states” at the local level.6 Indeed, system (particularly the cadre manage- much of China’s success and uniqueness ment system) and the ½scal system. In ad- in the contemporary period is attributed dition, through the approval process and to its local governments, which are seen the transfer of funds, Beijing can shape, if both as laboratories for policies that can not determine outright, economic and be extended throughout the whole coun- spending priorities of localities. Collective- try, and as competitive units that “race” ly, these factors condition the behavior of each other in a battle for development.7 local cadres, providing incentives and dis- If China in the post-Mao period (since incentives for governance and economic 1978) has achieved a benevolent balance behavior. between centralization and decentraliza- Over the ½rst decade or so of reform, the tion, it is in part a result of historical acci- incentives given local cadres aligned with dent. Following the Cultural Revolution, the objectives set by central leaders (pri- China’s economy was quite decentralized, marily economic growth). But the decen- and planners, led by senior economic poli- tralization associated with ½scal contract- cy-maker Chen Yun, worked hard to recen - ing and the “delegation of power and yield- tralize the economy. They could only do so ing of bene½ts” (fangquan rangli) went too much, however, and they ended up achiev - far, eroding the ½scal authority of the cen- ing only a modest recentralization of the tral state–that is, until the major tax re- ½scal system and a strengthening of the form policy of 1994 shifted the balance back planning system, while at the same time toward Beijing. Because this tax reform

143 (2) Spring 2014 171 Local was negotiated between the center and needs of the superordinate leaders, and Governance the provinces, however, little consider - sub ordinate leaders are evaluated not by in China: Incentives ation was given to the ½scal needs of the how well they serve their “constituents,” & Tensions lower levels of government, particularly but by how well they perform these tasks. the counties and townships. This neglect Because power remains highly concentrat- of ½scal resources for lower levels of gov- ed, there is a strong tendency for authority ernment, in turn, exacerbated relations to be personalized; and because the ties be- between local cadres and peasants. The tween leaders at one level and the cadres ½scal deprivation of counties and (espe- below them at the next are often quite cially) townships worsened in 2006, when close, relationships tend to be corrupt. the central government ended the collec- The cadre system was built as a mobi- tion of agricultural and miscellaneous lizational system, not a professional bu- taxes. Together, these changes in the ½scal reaucracy. Mobilizational systems can be system, combined with the exercise of ver - quite flexible, and that flexibility was very tical accountability through the cadre useful in the rapidly changing environ- management system, have created fric- ment of the revolution, the civil war, and tions and dysfunctions at the local level. then the political campaigns that domi- The benign alignment of incentives be- nated the ½rst quarter-century of the Peo- tween the principle (the central govern- ple’s Republic of China (prc).9 The cadre ment) and its agents (local governments) system proved malleable once again when that characterized the early years of the the party-state began to execute Deng Dengist reforms no longer prevailed. Xiaoping’s economic reforms in 1978. Instead of being evaluated by their effec- The cadre management system is the core tiveness in carrying out revolutionary or political mechanism that binds the differ- political campaigns, cadres were now eval- ent levels of Chinese government together. uated largely by their success in economic There are ½ve levels of government in Chi- development. This shift in tasks was ac - na: central, provincial, municipal (prefec- companied by new recruitment criteria tural), county, and township. Villages are that emphasized being “more revolution- below townships, but are considered “self- ary, younger, better educated, and more governing” because their cadres are paid professionally competent,” though “more by the villages themselves rather than by revolutionary” was generally thought of as the state (though there have been moves “politically reliable” in practice. Retire- in recent years to pay some village cadres ment was gradually institutionalized. The in poor areas using state funds). But self- party school system was reprogrammed governing does not mean autonomy, to train cadres in updated ideology and, since village affairs are still dominated by eventually, management skills.10 the local party branch. This system proved highly effective in The cadre system holds these levels to- promoting growth, as China’s high-speed gether through a hierarchical arrangement development over the past three decades in which each level (with the exception of attests; but its very focus on economic township) is responsible for appointing growth meant that other areas of gover- and evaluating cadres at the level below. nance–including health care, education, The cadre system is also task-oriented: and environmental protection–were neg- cadres are not given job descriptions, but lected. This imbalance was caused by four are rather assigned tasks to perform. factors. First, the cadre system privileges Such tasks can change depending on the targets that are easily counted. Thus, the

172 Dædalus, the Journal ofthe American Academy of Arts & Sciences one-child policy could be implemented e½tted most peasants, but cadres respond- Joseph with remarkable effectiveness and, at ed by requisitioning land to attract devel- Fewsmith & Xiang Gao times, ruthlessness.11 Similarly, economic opment projects. Land seizures may have development can be counted, albeit with affected fewer peasants, but those affected some slippage, through the calculation of were hurt badly, and they reacted strongly gdp ½gures. Second, pursuit of economic against their local of½cials. Increasingly, development has been relatively uncon- development issues have set the interests troversial at all levels of government, of local cadres against those of the people which makes it a consensus target. Prior- they govern, and the cadre management itizing economic development as the core system sharpens the conflict. Together, task and weighing it heavily in the cadre these four factors point to the cadre sys- evaluation system avoids arguments about tem itself as the primary cause of social how to measure and compare “softer” instability.12 tasks. Focusing on economic develop- Local governments pursued the primary ment also aligns the personal interests of goal of the central government–economic cadres–who often bene½t personally development–because the interests of through privilege and corruption–with central and local governments largely over - the goals of the state, making economic lapped; but local governments also pur- goals more likely to be attained. But again, sued their interests in their own way. the focus on development inevitably That is to say, the central government can comes at the expense of softer social ser - de½ne tasks for local authorities to imple- vices. Though some of these service areas, ment, but it cannot stipulate the way in such as education and, even more so, which local governments pursue those medical care, have received greater atten- goals. The differences between the inter- tion recently, they continue to suffer from ests of the central and local governments years of neglect and are typically not em - become more obvious when the central phasized in local government plans. Third, government takes steps to diversify its particularly with increasing pressures to goals, moving from economic develop- develop and the rising price of land, there ment to new pursuits such as controlling are strong incentives for cadres to requi- corruption, protecting the environment, sition peasants’ land, often with little or and building a health care system. This no compensation given in exchange. There divergence of interests became apparent is also considerable temptation to pocket when the central government began to ad - some of the proceeds. Such actions put dress the issue of instability both through local government in direct conflict with at modest political reform and, more impor- least some of its people and create resent- tant, when it tried to establish a “service- ment through the local cadres’ public dis- oriented government.” plays of wealth. Finally, the broader ½scal environment Political reform, though that term must influences the way cadres interact with be understood modestly, was one way Chi - common citizens. When the state moved na tried to deal with the growing problems to recentralize the ½scal system through of cadre networks and social protest that the tax reform of 1994, local cadres, under developed in the wake of the 1994 tax re - pressure to develop the economy, reacted form. In 1995, the Central Organization by over-collecting taxes, provoking pop- Department, then under the leadership of ular tax resistance. The abolition of the Zeng Qinghong, issued the “Interim Reg- agricultural tax in 2006 certainly ben - ulations on the Selection and Appoint-

143 (2) Spring 2014 173 Local ment of Leading Cadres of the Party and ingness to innovate, if only cautiously. Governance State.”13 These regulations tried to open Sim ilarly, local cadres who faced social in China: Incentives up the cadre selection process by requir- pres sures and who, perhaps more impor- & Tensions ing wider participation and mandating tant, wanted to show their superiors that processes of “democratic recommenda- they could deal with such pressures cre- tion,” inspection, preparation, discussion, atively, were willing to innovate. But that and decision-making. Such processes were does not mean there were suf½cient pres- intended to constrain the ability of lead- sures to produce a benevolent cycle. On the ing party secretaries to gift promotions to contrary, there were countervailing pres- their followers single-handedly. The 1995 sures that minimized, and perhaps ren- decision laid the foundation for the ex - dered meaningless, the impact of political periments in “inner-party democracy” reform. According to a study on China Lo- that would unfold ½rst in Sichuan province cal Governance Innovations Awards, the and later in other provinces. number of local innovations in political Neither the 1995 regulations nor the reform has decreased since 2005–2006.14 burgeoning inner-party elections at the Not even the innovation of “participatory township level were intended to lay a foun- budgeting” (canyuxing yusuan) in Wenling, dation for the democratization of China. Zhejiang, widely acknowledged to be a suc - Rather, the hope was that by involving cessful (if limited) experiment in reform, more people in the selection process, the has spread to neighboring cities. It remains party could break up the tight-knit groups to be the only existing case of “delibera- that formed around local leaders, tighten tive democracy” (or perhaps more accu- control over lower-level party organiza- rately “consultative authoritarianism”) tions, reduce the potential for corruption in Zhejiang province.15 (by multiplying the number of people who What are these countervailing pressures would have to be paid off if bribery were weighing against experimentation in po - attempted), and give promotions to people litical reform? First, even if the central who might be less predatory. Reformers government were concerned about poor hoped that by exploring a democratic pro - governance and social stability at the lo - cess, however narrowly and gingerly, the cal level (and it has been), it had no interest party might be led along a path that would in weakening the party. In any contest be - increase public participation and account - tween the organizational principle of “the ability. Perhaps in the long run, such mea - party manages the cadres” and efforts to sures might, in fact, form a bridge toward constrain local party secretaries, the democracy. organizational principle–and therefore Social scientists are accustomed to the party secretaries–would prevail. Hier- thinking that if there are suf½cient incen- archical control of the party was simply too tives to provoke social innovation, there important to sacri½ce, even if doing so will likely be increasing returns, which in improved local governance. Second, inner- turn lead to path dependency and a be- party democracy innovations took place nevolent cycle of ever-deeper innovations. at the township level, and the county party In China, there certainly were incentives committees that supervised them had to innovate. The adoption of new regula- mixed motives. On the one hand, county tions on cadre selection reflected the cen- party committees wanted to be seen by tral authorities’ concerns about social sta- their superiors as skilled in responding to bility (as explored by Ching Kwan Lee in local problems. Electing a new township her essay in this volume) and their will- head or party secretary might help an area

174 Dædalus, the Journal ofthe American Academy of Arts & Sciences past a dif½cult time, either by calming so - and more people were discussing the need Joseph cial concerns or by helping to raise funds to address social problems in addition to Fewsmith & Xiang Gao for construction projects. On the other economic growth. For instance, Li Peilin, hand, choosing a new township leader a prominent sociologist at the Chinese might be more about jump-starting a Academy of Social Sciences (cass), ar - career than serving the interests of the gued that the Chinese government thought public. Thus, leaders chosen in the course for years that it could grow its way out of of an inner-party election were frequently social problems, but “a new round of eco- moved to new posts shortly after being nomic growth would, on the contrary, ex - elected; the county may have discovered acerbate things, even to the extent of se - a new talent, opening the door for the verely threatening sustainability and sta- newly elected leader to move on to a better bility of continued growth.” Has the time position. The social impact of his election come, Li asked, when China should adjust on the area, then, was minimal. Perhaps its development strategy from “taking eco- more important, the of½cial who had or - nomic development as the center” to “tak- ganized the election may also soon move ing the coordinated development of the on to a new position, and the next party economy and society as the center”?17 secretary might very well feel that further The sars (Severe Acute Respiratory elections are unnecessary. Thus, there are Syndrome) crisis of late 2002 to early 2003 very few areas that have held more than drove the point home: economic growth two township-level elections.16 could not solve all governance problems in China. The central leaders started to Ever since reform and opening began in realize that the uneven development and 1978, authoritative party documents have the diversi½cation of interests meant that maintained that the primary contradic- there would be “winners” and “losers” in tion facing China is that between the “ever- the reform process. As reform deepened growing material and cultural needs of the and the economy developed, Chinese so- people and the backwardness of social pro- ciety became increasingly made up of dis- duction.” That is to say, the most impor- tinctive social groups with different and tant task was economic development. The sometimes conflicting interests. During implication was that whatever social prob- the Jiang Zemin era, ccp leaders paid more lems China might face, they would even- attention to the private entrepreneurs, tually be solved through further economic since they were perceived as both the most growth. This conclusion was implicit in dynamic demographic in the rapidly evolv - General Secretary Jiang Zemin’s “Three ing society and the greatest potential po - Represents” (sange daibiao): the doctrine, litical opposition. The Three Represents ½rst introduced in 2000, that posited that successfully co-opted the so-called red hat the Chinese Communist Party (ccp) rep- entrepreneurs (private entrepreneurs who resented the “advanced forces of produc- registered as “collective” enterprises), but tion,” advanced culture, and the funda- overlooked the welfare of peasants, laid- mental interests of the overwhelming off workers, and others left behind in Chi- majority of the people. The theory that the na’s economic boom. By the late 1990s, it party represented the advanced forces of was increasingly clear that reform was cre- production was what justi½ed allowing ating not only winners, but also losers.18 entrepreneurs and other “new forces” to Premier Zhu Rongji reflected the increas- join the party. Nevertheless, by the end of ing consciousness of this reality when he Jiang Zemin’s term of of½ce in 2002, more for the ½rst time used the term “vulnera-

143 (2) Spring 2014 175 Local ble groups” (ruoshi qunti) in the Govern- yuan, which was ten times the same ex- Governance ment Work Report of 2002.19 penditure in 2004. As part of this effort, in China: Incentives Recognizing the diversity of interests the government invested 105 billion yuan & Tensions and China’s uneven development, General over the course of the Eleventh Five-Year Secretary Hu Jintao and Premier Wen Plan (2006 to 2010) for the Safe Drinking Jiabao put social development on top of Water Project, which provided clean drink- their policy agenda, emphasizing the im - ing water for more than 210 million rural portance of providing public service. The residents. central leaders came to believe that by The government also publicized a series compensating those who lost out in the of social policies related to education, course of economic development, they health care, employment, and social secu- could lessen public dissatisfaction with rity, ending the long history in which rural the government. This belief was given life areas were excluded from the state welfare in the new slogan “Scienti½c Development system. In less than ten years, the Chinese Concept” (kexue fazhanguan), which soon government successfully built a basic so - became the leading development principle cial safety net for rural residents. Initiated in China. Whereas Jiang Zemin’s Three in 2003, the New Rural Cooperative Med- Represents had emphasized “advanced ical System had more than 830 million productive forces” (economic develop- rural participants by 2010. The New Rural ment), the Scienti½c Development Con- Social Pension System, another key policy cept shifted the emphasis to the third of of the Hu–Wen administration, began to the Three Represents, namely the interests be implemented nationwide in 2012, three of the vast majority of the people. years after it was ½rst experimented with The Scienti½c Development Concept, on a smaller scale. Besides such new poli- like the idea of a “harmonious society” cies, the central government also increased (which appeared in 2006), was embodied the standard of public services. For in- by the proposal to build a “service-oriented stance, in 2011, it increased the minimum government” (fuwuxing zhengfu). As a re- standard of living in rural areas to 2,300 form agenda, the idea of a service-oriented yuan per household per year, which is 92 government tried to rede½ne the function percent higher than it was only two years of government by highlighting social man- earlier in 2009. agement and the delivery of public service, In urban areas, public service provisions which had long been ignored. that emphasized the needs of migrant In line with this idea, the government workers were also introduced. By the time focused much attention on the country- Hu and Wen left power in 2012–2013, side. Beginning in 2004, the government rural migrant children without local house - resumed publication of “Central Docu- hold registration could go to primary and ment No. 1,” the annual document that had junior middle school (though the family’s led the way in rural reform in the early and obedience to the one-child policy was still mid-1980s. In 2006, the government abol- a precondition), while the migrant work- ished agricultural taxes and unveiled plans ers themselves became covered by the to build a “New Socialist Countryside” endowment insurance system for urban that focused on infrastructure construc- workers. But all of these policies could not tion and improving the income of rural be carried out without a signi½cant increase residents. By 2011, the Chinese govern- of government expenditure. Between 2007 ment’s expenditure on rural and agricul- and 2010, the Hu–Wen administration in - tural issues reached nearly three trillion creased annual expenditures on education,

176 Dædalus, the Journal ofthe American Academy of Arts & Sciences science and technology, culture, sports and tegic group with shared interests.21 Yet Joseph media, the social safety net, employment- local governments are just as fragmented Fewsmith & Xiang Gao effort rewards, medicine and health care, as the governments above them. More- environment protection, urban and rural over, the Hu–Wen emphasis on the third of community affairs, agriculture, forestry Jiang Zemin’s Three Represents–the fun- and water conservancy, and transportation damental interests of the overwhelming by 265.2 million yuan, which made up 66.16 majority of the people–did not mean en - percent of total increased expenditures in couraging the formation of interest groups those years. (“civil society”). Rather, the party relied But just how successful these efforts on the “mass line,” a traditional means of were in building a service-oriented govern- cadres determining the needs of the ment is a subject of controversy. On the “masses” for them. one hand, there seems to be some narrow- Under these circumstances, local gov- ing of the urban-rural income gap since ernments, especially the county-level gov - 2010. In 2012, rural residents’ annual per ernments–the lowest level to have com- capita net income reached 7,917 yuan, plete functions as well as independent growing 13.5 percent over the previous ½scal and budget powers–responded to year, a slightly higher growth rate than the new initiative as an opportunity to that of urban residents. Thanks to the im- increase their budgets. Not surprisingly, proved social policy system, 1.3 billion citi- the heads of departments in charge of zens are protected by different forms of social management or public services be- the health care insurance system, and two came the biggest supporters of the idea of hundred million citizens are getting pen- a service-oriented government, pushing sions from the state. Such data suggest that their local governments to adjust their a service-oriented government has been budgets to meet central documents’ successful to some degree. guidelines. But other department heads, On the other hand, the crisis in local including local party secretaries, were not governance has not eased and may, in as enthusiastic. They continued to look fact, have gotten worse. While problems on economic development as their pri- of environmental pollution, which have mary goal and were reluctant to divert intensi½ed since the industrialization expenditures to meet social needs. Despite boom in the 1980s, remain unresolved, new the fact that the cadre management system problems such as land acquisition have was adjusted in 2009 to include social man- emerged and have triggered severe mass agement and public service indicators, and incidents, especially in well-developed to reduce the weight of economic devel- areas. According to a local survey conduct- opment indicators, it failed to provide a ed in 2007, popular distrust of local cadres’ strong motivation for party secretaries to commitment to the public is still signi½ - implement the Scienti½c Development cant.20 The crux of the problem is that Concept.22 local governments must implement cen- Beijing was also aware of the weak in- tral policy, and the local governments, centives for local governments to pursue a facing limited accountability, do not have service-oriented government. In response, strong incentives to build a service-orient- the central government created specially ed government. earmarked funds (xiangmu zhi) to offer di - rect support to local service departments. Local governments are usually consid- This mechanism provided special funding, ered to be either rational actors or a stra - which bypassed the local budget process,

143 (2) Spring 2014 177 Local for projects supported by the local service ef½cient than a centralized system, since Governance departments. The intention of the mech- local governments have more information in China: Incentives anism was to avoid the abuse of special and are able to adjust their policy priori- & Tensions funds by other local authorities and to en - ties according to the preferences of local hance vertical management. Ideally, the communities.24 But this can only be true service departments with additional re - if local residents or local people’s congress- sources would improve the performance es can seriously constrain the corruption of public service delivery and social man- and unethical practices of local govern- agement. In 2012, more than 40 percent ments, which is not the case in China. of the central government’s transfer pay- With out any horizontal or bottom-up ment to local government was spent as accountability at the local level, respon- special transfer payments via these ear- siveness becomes a serious problem in marked funds.23 building a service-oriented government. But even this mechanism could not nec - A survey in early 2009 showed that the essarily improve local governance. Local most desired public services of rural resi- service departments, unable to secure dents, including environmental protection more funds from the local level, scram- and public safety, were all neglected by bled to apply for these special funds from local government.25 higher-level governments. But when they Instead of improving the quality of gov - received such funding, cadres preferred to ernance at the local level, the decentralized spend it on construction projects–which ½scal system has created a strong motiva- brought them personal gain–instead of tion for local governments to maximize increasing the standard of public services. their revenues. Case studies show that For instance, a huge amount of money was local governments respond to the central spent on building online networks for so - government’s demand for service-oriented cial security, while the transfer of migrant construction in name only. It is not until workers’ social insurance funds has re- an opportunity for enhancing revenue mained an unsolved problem. Despite the emerges that all actors in the local gov- directive from the central government to ernment work together to initiate social improve the social security situation of policy innovations.26 In China today, land migrant workers, local of½cials in social acquisition is widely implemented under security departments still permit migrant the guise of “rural community construc- workers to take only part of their pension tion” or “urbanization,” though the real insurance account with them if they move intent of local government is to increase to another area, a policy that clearly hurts revenue through the seizure of rural con- workers. In other words, local cadres struction land for urban development. By cared more about their departments and distorting central policies, local govern- personal interests than they did about the ments are creating more governance crises welfare of many in their communities. even as they claim to be building a service- The goal of building a service-oriented oriented government. government is further hindered by China’s Overall, actors in local governments decentralized ½scal system, which serves have one of two divergent interests: they to make local governments more pro½t- either neglect the policy agenda of the oriented. This is contrary to the conven- central government because of the limi- tional wisdom of political economists, tations of the cadre evaluation system; or who tend to support the argument that a they take advantage of programs intended decentralized government system is more to build a service-oriented government

178 Dædalus, the Journal ofthe American Academy of Arts & Sciences in order to bene½t themselves. Local gov- tions. The current arrangement puts local Joseph ernments may implement the minimum government in charge of policy implemen- Fewsmith & Xiang Gao policy to create a service-oriented govern- tation, even though it seems to reduce the ment, but local actors are simply not ac- quality of local governance. Nevertheless, countable to the local community. The by espousing popular initiatives, the cen- lack of such a mechanism reduces the ef - tral government creates a good image for fectiveness of service-oriented government itself and wins peoples’ trust–as veri½ed and causes tensions in local governance. by the many surveys that show citizens have a high degree of satisfaction with the Local government in China is responsi- central government but are far less sat - ble for implementing the policies of the is½ed with their local governments.27 central government, but it also wields con - In fact, the central government is not siderable power within its sphere of con- only unwilling to experiment with en- trol. Although local government must per- hanced vertical management, it is also re- form those tasks that leaders at the next luctant to publicize the ways in which it highest level prioritize–particularly “hard intervenes in local affairs, except for when targets”–its primary incentive is to max- doing so results in favorable publicity, such imize its own revenue. Thus, the cadre as for the initiation of new social policies. man agement system has held China to - For instance, since 1978, the central govern- gether and propelled economic develop- ment has delegated some economic man- ment, but it has not promoted good gov- agement power to the local governments, ernance. The cadre management system but has only allowed the localities to ap - has given local cadres incentives that are prove projects within a certain scale and contrary to the interests of many local category. For big projects that exceeded residents, either through overtaxing or these limits or belong to a particular in - through land requisitions and sales. The dustry type, local governments had to sub - central government’s efforts to promote a mit proposals to higher levels for approval. service-oriented government can only mit- This is the administrative device through igate this basic structural contradiction to which the central authority implemented, a certain extent. Indeed, even though local and continues to implement, macro-con- residents bene½t from the growth of social trol. However, this approval process occurs programs, local governments bene½t more. within the governmental system and is not If the central government is aware of widely known to the public. If such proj- widespread bad governance at the local ects go awry, people blame the local gov- level, why does it not pursue more system- ernment where the project is located, rath- atic government reform? As discussed er than the higher-level government that above, the government did initiate exper- approved the project or perhaps even de - iments with limited elections, but those manded it. Thus, when there is a crisis, reforms soon faded out. Apart from such people protest and take action against the political reforms, the central government local government, which may well only be could set up a vertical management system implementing a project that was conceived to implement directly those functions that of at a higher level. local government does not have strong Such was the case with the controversial incentives to pursue. paraxylene (px) plant that was being built The central government, however, does in Ningbo, Zhejiang. The project was ap - not seem to have the motivation to change proved by the National Development and the current system of central-local rela- Reform Commission (ndrc) in Beijing,

143 (2) Spring 2014 179 Local though local residents were unaware of better or worse. Thus, it is very different Governance this point. So when protestors took to the from the federal system of Brazil, the cen- in China: Incentives streets in late 2012 to object to the px plant, tralized system of Mexico under the pri, & Tensions they ½rst went to the Zhenhai District and the combination of central bureau- government, which had no authority to cracy and intense localism in India. China, stop the project. Two days later, the protes- of course, shares many similarities with tors moved on to the Ningbo city govern- the former Soviet Union, but the long ment, which under pressure, announced revolutionary struggle and the Cultural the termination of the px plant develop- Revolution seem to have given China a ment–though that project was actually a flexibility and an incentive for reform and smaller part of a major petrochemical economic development that the Soviet project, with other initiatives still sched- Union did not have. uled to be carried out. More important, The inauguration of reform in late 1978 because this project was approved by the unleashed tremendous changes in China, ndrc, involves the powerful oil company stimulating unprecedented economic Sinopec, and includes many additional growth and opening up unimagined op - com ponents, it is not at all clear that the portunities for millions of citizens. The protest was as successful as reported. What ccp was itself revamped, with younger, is clear, however, is that the local govern- better-educated cadres replacing older, ment has borne the blame for decisions more ideological revolutionaries. But for made much higher in the governmental all these changes, the cadre system has re - chain. Public trust is eroded, but gover- mained remarkably consistent. The cur- nance is not improved. riculum they study at party schools has changed dramatically, but the core hierar- The cadre system emerged in the course chical personnel system remains the same. of China’s revolution as a way of maintain- Viewed from the perspective of local ing party discipline and mobilizing popu- government, however, the cadre system lations. While it enforced central policy, has produced distinctly ambivalent results. it was always a decentralized system in On the one hand, China’s infrastructure which of½cials were appointed to posts and its economic development owe much and given great authority to see that tasks to the mobilizing abilities of China’s were completed. It gave the ccp flexibili- cadres. But on the other hand, the people ty, allowing it over time to unite with the who have borne much of the cost of this Kuomintang (Nationalist Party), to split rapid development have been those who with it, and to unite with it again; to ally should have been its bene½ciaries: the with the Soviet Union, but later to oppose local residents. The cadre management “Soviet revisionism”; and to carry out land system revolves around vertical account- reform and, eventually, to allocate land to ability (higher-level cadres judging the per - households in the name of reform (among formance of lower-level cadres), but lacks other things). There is no question that horizontal or bottom-up accountability the cadre system was central both to Chi - (be it from a freer media, a healthier civil na’s revolutionary quest and to its later society, or elections). The result is a high- economic development. The cadre system pressure system that drives economic de- centralized China in unprecedented ways, velopment but also creates unfairness but the country remained decentralized and discontent among ordinary people. enough for local cadres to maintain great Whether overtaxed in the 1980s and 1990s, influence in the areas they controlled, for or forced to yield their land for minimal

180 Dædalus, the Journal ofthe American Academy of Arts & Sciences compensation following the elimination ator between local governments and local Joseph of the agricultural tax in 2006, local resi- residents, the higher levels of government, Fewsmith & Xiang Gao dents have often felt taken advantage of, particularly the central government, are and have expressed their frustrations not only able to contain governance crises through public opinion surveys, in collec- at the local level, but are also able to win tive petitions, and through mass incidents. support from the public. Well aware of the situation, the central Thus, despite the many systemic prob- government has reacted in at least two lems, it is not dif½cult to understand why ways: it has experimented with political the central government does not want to reform, searching for new ways to select reform the current central-local relation- cadres and to involve wider circles of cad - ship. The combination of a decentralized res, and sometimes even non-party people, administrative system and a centralized in governance; and it has adopted mea- personnel system offers the central govern- sures to bene½t the people, relieving peas- ment a vital risk-prevention mechanism. ants of the burden of agricultural taxes Were the central government to restruc- and creating a rural medical system and a ture governmental agencies and claim rural pension system in an effort to build more direct responsibility for policy im - a service-oriented government. However, plementation, it would then have to face abolishing agricultural taxes and paying the residents–and their grievances and for the unfunded mandate of public ser - political expressions–directly. And if vice delivery put new pressures on local some thing did go wrong, the central gov- governments, particularly those without ernment could not maintain its largely pos- local industry, to ½nd new sources of rev- itive image. Balancing between its desire enue. Meanwhile, measures intended to to stay in power and the hope of promot- provide more and better services to resi- ing better governance, it is no wonder that dents are frequently distorted to bene½t the central government maintains the local governments through the construc- status quo. So the tensions in local gover- tion of new projects. nance go on. Ironically, higher-level governments, especially the central government, not only seem immune to the discontent expressed at the local level, but actually garner praise for their efforts. By putting local govern- ment in charge of implementing policies, the central government distributes the risk among thousands of local governments and thus does not itself have to deal di - rectly with the people. If when public dis- content erupts into crisis the local gov- ernment is able to resolve it, higher levels of government do not have to intervene. But if the crisis is not successfully resolved at the local level, higher levels of govern- ment can use their control over the person- nel system to remove responsible cadres from their positions, thereby reducing public anger. By playing this role of medi-

143 (2) Spring 2014 181 Local endnotes Governance JOSEPH FEWSMITH in China: * Contributor Biographies: is Professor of International Relations and Incentives Political Science at Boston University. His publications include The Logic and Limits of Political & Tensions Reform in China (2013), China Today, China Tomorrow (2010), and China since Tiananmen (2nd ed., 2008). XIANG GAO is a lecturer of Public Administration at Zhejiang University. Her publications include “Rede½ning Decentralization: Devolution of Administrative Authority to County Governments in Zhejiang Province” in the Australian Journal of Public Administration (with Jianxing Yu, 2013) and Cong xingzheng tuidong dao neiyuan fazhan: zhongguo nongye nongcun zai chufa [From State-led Development to Endogenous Development: Rede½ning Rural and Agricultural Development in China] (with Jianxing Yu, 2013). 1 Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert Vishny, “The Quality of Government,” Journal of Law, Economics, & Organization 15 (1) (April 1999): 222–279. 2 Peter Evans and James E. Rauch, “Bureaucracy and Growth: A Cross-National Analysis of the Effects of ‘Weberian’ State Structures on Economic Growth,” American Sociological Review 64 (5) (October 1999): 748–765. 3 Scott W. Desposato, “The Impact of Federalism on National Party Cohesion in Brazil,” Leg- islative Studies Quarterly 29 (2) (May 2004): 259–285; and Atul Kohli, State-Directed Development: Political Power and Industrialization in the Global Periphery (New York: Cambridge University Press, 2004), chap. 4 and 5. 4 Aseema Sinha, “Rethinking the Developmental State Model: Divided Leviathan and Subna- tional Comparisons in India,” Comparative Politics 35 (4) (July 2003): 459–476. See also Atul Kohli, Poverty Amid Plenty in the New India (New York: Cambridge University Press, 2012). 5 Alain De Remes, “Democratization and Dispersion of Power: New Scenarios in Mexican Federalism,” Mexican Studies/Estudios Mexicanos 22 (1) (Winter 2006); and Merilee Grindle, Going Local: Decentralization, Democratization, and the Promise of Good Governance (Princeton, N.J.: Princeton University Press, 2007). 6 Jean Oi, Rural China Takes Off: The Institutional Foundations of Economic Reform (Berkeley: Uni- versity of California Press, 1999). 7 Sebastian Heilmann, “From Local Experiments to National Policy: The Origins of China’s Distinctive Policy Process,” The China Journal 59 (January 2008): 1–30; Sebastian Heilmann, “Policy Experimentation in China’s Economic Rise,” Studies in Comparative International Development 43 (1) (2008): 1–26; and Gabriella Montinola, Yingyi Qian, and Barry R. Weingast, “Federalism, Chinese Style: The Political Basis for Economic Success in China,” World Politics 48 (1) (October 1995): 50–81. For a critique of the market-preserving federalism thesis, see Richard C. Schragger, “Decentralization and Development,” Virginia Law Review 96 (8) (Decem- ber 2010): 1837–1910. 8 Ezra F. Vogel, One Step Ahead in China: Guangdong under Reform (Cambridge, Mass.: Harvard University Press, 1989). 9 Elizabeth J. Perry and Sebastian Heilmann, “Embracing Uncertainty: Guerilla Policy Style and Adaptive Governance in China,” in Mao’s Invisible Hand: Political Foundations of Adaptive Governance in China, ed. Elizabeth J. Perry and Sebastian Heilmann (Cambridge, Mass.: Harvard University Press, 2011), 1–29. 10 Frank N. Pieke, The Good Communist: Elite Training and State Building in Today’s China (Cam- bridge: Cambridge University Press, 2009). 11 Susan Greenhalgh, Just One Child: Science and Policy in Deng’s China (Berkeley: University of California Press, 2008). 12 Carl Minzner, “Riots and Cover-Ups: Counterproductive Control of Local Agents in China,” University of Pennsylvania Journal of International Law 31 (2009).

182 Dædalus, the Journal ofthe American Academy of Arts & Sciences 13 “Dangzheng lingdao ganbu xuanba renyong gongzuo zanxing tiaoli” [“Interim Regulations Joseph on the Work of Selecting and Appointing Leading Cadres of the Party and State”], in Zhongguo Fewsmith & gongchandang dangnei fagui xuanbian 1978–1996 [A Selection of Internal Regulations of the Chinese Xiang Gao Communist Party, 1978–1996], ed. Zhongyang jiwei fagui shi, zhongyang zuzhibu bangongting (Beijing: falü chubanshe, 1996). 14 He Zengke, “Zhongguo zhengfu chuangxin de qushi fenxi: Jiyu wujie ‘zhongguo difang zhengfu chuangxin jiang’ huojiang xiangmu de dingliang yanjiu” [“An Analysis on Chinese Government Innovation: A Quantitative Study based on the Five Session of China Local Governance Innovations Awards”], in Zhengfu chuangxin de Zhongguo jingyan: jiyu “zhongguo difang zhengfu chuangxin jiang” de yanjiu [Governance Innovations in China, Researches based on China Local Governance Innovation Awards], ed. Yu Keping (Beijing: Zhongyang bianyi chuban- she, 2011), 18–40. 15 Joseph Fewsmith, The Logic and Limits of Political Reform in China (New York: Cambridge University Press, 2013), chap. 5. 16 Ibid., chap. 1. 17 Li Peilin et al., eds., Shehui chongtu yu jieji yishi [Social Conflict and Class Consciousness] (Beijing: Shehui kexue wenxian chubanshe, 2005), 10, 24. Emphasis added. 18 Lawrence Lau, Yingyi Qian, and Gerard Roland, “Reform without Losers: An Interpretation of China’s Dual-Track Approach to Transition,” Journal of Political Economy 108 (1): 120–143. 19 Zhu Rongji, “2002 nian guowuyuan zhengfu gongzuo baogao” [“Government Work Report of 2002”], Dijiujie quanguo renmin daibiao dahui diwuci huiyi [The Fifth Plenary of the Ninth People’s Congress], March 5, 2002. 20Lianjiang Li, “Distrust in Government Leaders, Demand for Leadership Change, and Preference for Elections in Rural China,” Political Behavior 33 (2) (June 2011): 291–311. 21 Thomas Heberer and Gunter Schubert, “County and Township Cadres as a Strategic Group: A New Approach to Political Agency in China’s Local State,” Journal of Chinese Political Science 17 (3) (2012): 221–249. 22 Gao Xiang, Understanding Local Politics: Institutions, Interests, and Incentives, Ph.D. dissertation, Zhejiang University, 2012. 23 Ministry of Finance of the People’s Republic of China, “Report on the Central and Local Budget Implementation in 2012 and the Draft of Central and Local Budget in 2013” [“Guanyu 2012 nian zhongyang he difang yusuan zhixing qingkuang yu 2013 nian zhongyang he difang yusuan caoan de baogao”], http://www.mof.gov.cn/zhengwuxinxi/caizhengxinwen/201303/ t20130319_782332.html. 24 Grindle, Going Local. 25 Yu Jianxing and Gao Xiang, Cong xingzheng tuidong dao neiyuan fazhan: zhongguo nongye nongcun zai chufa [From State-led Development to Endogenous Development: Rede½ning Rural and Agricultural Development in China] (Beijing: shifan daxue chubanshe, 2013), 26–27. 26 Yu Jianxing and Gao Xiang, “Difang fazhanxing zhengfu de xingwei luoji ji zhidu jichu” [“Local Developmental Government and Its Institutional Foundations”], Zhongguo Shehui Kexue 5 (2012): 95–112. 27 Lianjiang Li, “Political Trust in Rural China,” Modern China 30 (2004): 228–258; and Lianjiang Li, “The Magnitude and Resilience of Trust in the Center,” Modern China 1 (2013): 3–36.

143 (2) Spring 2014 183 Environmental Governance in China: State Control to Crisis Management

Elizabeth Economy

Abstract: After three decades of rapid economic growth, environmental degradation is now one of the most signi½cant issues facing the Chinese government. The country’s air, water, and land are all heavily polluted. Despite a number of environmental protection initiatives, both at the national and local levels, China ranks poorly when compared with other emerging nations. Formal government institutions have failed to ad - dress adequately the people’s concerns. Beijing’s system of decentralized authoritarianism lacks the political processes and incentives needed to implement meaningful national reform and to en courage local gov ern - ments and polluting factories to enforce laws and regulations. The Chinese government now faces grow ing pressure from civil society, as NGOs, Internet activism, and protests compel the government to proactively address environmental issues. Beijing would do well to increase engagement between the government and its citizens, rather than relying on its current crisis management style of environmental governance.

In March 2013, residents in Shanghai watched as more than 16,000 diseased pigs floated down the tributaries of the city’s Huangpu River. Farmers upstream in Zhejiang province had slaughtered the diseased pigs, and rather than bury or cremate them as the law mandated, they had simply dumped them in a nearby waterway that flowed into the Huangpu. Hundreds of miles away, Hunan’s Liuyang River experienced a similar influx of dead pigs. This was only the latest in a string of environ- mental disasters in China. Earlier in the year, resi- ELIZABETH ECONOMY is the C.V. dents in Beijing, along with those in a number of Starr Senior Fellow and Director other Chinese cities, discovered that breathing the for Asia Studies at the Council on air where they lived was equivalent to living in a Foreign Relations. Her publications smoking lounge. And people in Guangdong learned include By All Means Necessary: How that Hunan-produced rice sold in their province in China’s Resource Quest is Changing the 2009 was contaminated with cadmium, a metal that World (with Michael Levi, 2014), when ingested can cause severe joint and spine pain The River Runs Black: The Environmen- tal Challenge to China’s Future (2nd along with cancer. For all the headlines these disas- ed., 2010), and China Joins the World: ters garnered, however, none was a ½rst-time event. Progress and Prospects (edited with Similar incidents had occurred repeatedly in the Michel Oksenberg, 1999). preceding years.

© 2014 by the American Academy of Arts & Sciences doi:10.1162/DAED_a_00282 184 At the heart of the Chinese government’s Asian neighbors–whether democracies or Elizabeth inability to protect the environment is au thor itarian states–also outperformed Economy the country’s particular mix of political China handily: Thailand (34th), Indonesia institutions, processes, and incentive (74th), and Vietnam (79th) among them. structures. Decentralized authoritarian- Still, parallels and lessons can be drawn ism, which so successfully spurred the from others’ experiences. Over the past country’s economic growth, has proved ½ve years, for example, new pressures to highly damaging to the environment. On reform China’s system of environmental the economic front, the combination of governance have emerged. The Chinese centrally mandated targets for economic middle class, much like that in every other growth, devolution of authority to local of- country in the world at China’s level of ½cials, engagement with the international economic development, has begun to un - community, and constrained participation derstand the trade-off between the ben- by the private sector provided substantial e½ts of rapid, unfettered economic growth economic opportunities and incentives in the short term and the health, environ- throughout the political system to encour- mental, and economic price paid over the age economic growth. This same institu- long term. Aided by the widespread adop- tional con½guration, however, has not de- tion of the Internet, the middle class has livered an equivalent set of incentives– discovered its voice and, increasingly, the either economic or political–to engender power to influence government policy– effective environmental protection. Put particularly at the local level–through simply, opportunities to “get rich quick” public pressure. Chinese environmental are more easily grasped than those intend- ngos, like their counterparts elsewhere, ed to “protect the environment.” are taking on increasingly sensitive issues, Is China’s environmental situation sub- moving from environmental education to stantially different from those in other anti-dam activism, pressure for greater countries with a similar level of econom- trans parency, and a stronger system of en - ic development, population size, econom- vironmental law. ic complexity, or political system? While The impact that these calls for change there is no country that closely approxi- have had on Beijing’s system of environ- mates China across all these metrics, Yale mental governance, however, has thus far University’s Environmental Performance been limited. The Chinese government has Index, which evaluates countries’ current largely resisted the path adopted by most environmental performance as well as (albeit not all) of the other countries their performance trends over the past ranked above it in the Yale index, remain- decade, offers some perspective. In 2012, ing wary of greater participation by civil China ranked 116th out of 132 countries.1 society. What is emerging instead is a crisis- China placed ahead of India (125th), which driven model of environmental governance boasts a similarly large population, de- at the local level, which, while effective in centralized political system, and complex delivering environmental protection on economy. (India, however, is a democracy, discrete issues in the short term, does not and its economic resources are far smaller: foster a sustainable, long-term environ- its per capita gdp is not even one-fourth mental governance structure. that of China.) When compared with vir- tually any other strong emerging econo- China faces a deep and enduring envi- my, such as Russia (106th) or Brazil (30th), ronmental crisis born of decades–or in China fared poorly. Its still-developing East some cases, such as deforestation, centuries

143 (2) Spring 2014 185 Environ - –of resource-intensive growth. Two-thirds the country’s water resources, but house- mental of China’s cities cannot meet the coun- hold and industrial demands have in- Governance 2 in China try’s air-quality standards, and according creased dramatically over the past decade to a 2012 Asian Development Bank study as individual wealth and the overall econ- of the country’s ½ve hundred largest omy continue to expand. At least ten cities, less than 1 percent meet the World provinces in China are below the World Health Organization’s air-quality stan- Bank’s water poverty level of 1,000 cubic dards.3 Much of the challenge stems from meters per person per year; these prov - China’s reliance on coal for power; coal inces account for 45 percent of the main- contributes around 70 percent of the coun- land’s gdp, 40 percent of its agricultural try’s overall energy mix, and energy con- output, and more than half of its indus- sumption grew 130 percent from 2000 to trial production. According to Jiao Yong, 2010.4 And as Chinese citizens become vice minister of water resources, in 2012 wealthier and move into cities, they will China had more than 400 cities without use more energy. Urban residents use on suf½cient water, 110 of which faced seri- average up to four times more energy than ous scarcity.9 China’s water is also highly their rural counterparts.5 polluted. The quality of the water has de- China also suffers from high rates of land teriorated signi½cantly due to industrial- degradation and deserti½cation, as well ization and urbanization. A February 2013 as high levels of soil pollution. Centuries report by the Geological Survey of China of deforestation, combined with overgraz- revealed that 90 percent of the country’s ing of grasslands and overuse of agricul- groundwater was polluted,10 and ap - tural land, have left much of China’s north proximately one-fourth of the water that and northwest seriously degraded. The flows through China’s seven major river level of soil erosion on the Loess Plateau, systems and their tributaries is considered once the center of Chinese agriculture, is un½t for even agriculture or industry. the highest in the world, and China has been unable to arrest the process of deg - The environmental consequences of Chi- radation. According to a survey completed na’s development choices are signi½cant. by state forestry of½cials, more than one- Equally consequential is how the environ- quarter of China’s land–well over one mil- ment affects the Chinese economy and lion square miles–is now desert or facing public health. As Minister of Environmen- deserti½cation.6 At the same time, soil tal Protection Zhou Shengxian stated in a pollution from unregulated factories has 2011 editorial, “The depletion, deteriora- seriously contaminated some of China’s tion, and exhaustion of resources and the arable land.7 The government, however, worsening ecological environment have has been unwilling to release detailed in- become bottlenecks and grave impedi- formation on soil pollution: a survey re - ments to the nation’s economic and so- leased in 2013, with information dating cial development.”11 back to 2006, has been deemed a state se- In 2010, the Chinese Academy of Envi- cret. Beijing has only acknowledged that ronmental Planning estimated that the more than 10 percent of arable land in the cost of environmental degradation equaled mainland is polluted.8 1.54 trillion yuan, or 3.5 percent of China’s No resource is more important to Chi - gdp.12 Skyrocketing pollution has also na’s continued economic growth or more brought about a number of public health worrisome to China’s leaders than water. challenges. In 2012, Vice Minister of Agriculture demands the largest share of Environmental Protection Wu Xiaoqing

186 Dædalus, the Journal ofthe American Academy of Arts & Sciences claimed that 40 percent of rivers and 55 panding economy and large population Elizabeth percent of groundwater was un½t for ensure that the country’s environmental Economy drinking. All along China’s major rivers, problems will not be resolved easily. As villages are experiencing rising rates of Premier Li Keqiang acknowledged in Jan- disease, cancer, tumors, and other health uary 2013, Beijing’s air pollution was the issues. Lee Liu, a geographer at the Univer- result of “accumulated problems” and sity of Central Missouri, reported in Envi- solving it would take “a long time” and ronment magazine that in 2010, he had involve the “concerted effort of the whole identi½ed 459 “cancer villages”–villages society.”17 in which cancer rates are signi½cantly Environmental policy-making in China higher than normal. Most are clustered reflects the same institutional arrange- around rivers with the lowest grade of ments that govern the formulation of pollution on the government’s ½ve-point economic policy. Beijing establishes a set scale. Some of these villages have cancer of targets and timetables and relies on rates thirty times the national average.13 implementation by local authorities. Local The effects of water pollution are not lim- of½cials are encouraged and sometimes ited to China’s water supply. Chemicals directed to experiment with different poli- and pollutants that seep into rivers and cy implementation models. Interaction groundwater also ½nd their way into food with and learning from the international crops and eventually onto dinner tables. community is also generally encouraged. A consistent diet of cadmium-laced rice However, private actors–in the case of has caused bone softening and weakness the environment, ngos, business, and the in southern Chinese villagers. And accord- Chinese public–have limited opportuni- ing to China Economic Weekly, in 2007, as ties for formal participation in the political much as twelve million metric tons of process. grain–enough to feed forty million people During the 12th Five-Year Plan (2011– annually–were contaminated with heavy 2015), for example, the State Council’s metals absorbed from the soil.14 plan for environmental protection called Air pollution is also a signi½cant source for an investment of US$536 billion (3.4 of health-related problems in China. Ac - trillion yuan); by comparison, Bloomberg cording to Yale’s Environmental Perfor- News estimates that the 11th Five-Year Plan mance Index, China’s performance in the allocated only around 40 percent of that area of health impacts from air pollution total.18 China is also the world’s leading was among the world’s worst, ranking market for renewable energy investment: 128th out of 132 countries.15 The Global it attracted US$65.1 billion in investment Burden of Disease Study, ½rst presented in 2012, which represents over one-½fth of in December 2012, estimates that outdoor total global investment in renewables.19 air pollution in China contributed to 1.2 The 12th Five-Year Plan also embraced million premature deaths in 2010. Accord- a number of binding targets on resource ing to the same study, India, with roughly consumption and environmental protec- the same population but with a much tion. According to the 12th Five-Year Plan smaller economy, confronts 620,000 pre- for the coal industry, China plans to re - mature deaths due to air pollution–related strict coal output and demand to approx- diseases.16 imately 3.9 billion metric tons per year by 2015.20 (According to of½cial statistics China’s environmental challenges are from the National Bureau of Statistics, in daunting, and the needs of a rapidly ex- 2011, China produced 3.52 billion metric

143 (2) Spring 2014 187 Environ - tons of coal and consumed 3.48 billion The nature of China’s political institu- mental metric tons.21) Additional measures from tions and processes is just as important as Governance in China the 12th Five-Year Plan include a 16 per- the structure of the economy and energy cent cut in energy intensity, a 17 percent use in understanding Beijing’s inability cut in carbon intensity, an 8 percent re - to address its environmental challenges. duction for sulfur dioxide and chemical One issue is China’s continued reliance on oxygen demand, and a 30 percent cut in large-scale campaigns to meet its envi- water intensity.22 ronmental targets. The leadership uses China’s decentralized authoritarian sys - mass campaigns to tackle macro-level en- tem, however, does not augur well for ac - vironmental threats, including land deg - tual implementation of these environmen- radation, water pollution, and water scar- tal targets. At the beginning of the 11th city. These campaigns, however, suffer Five-Year Plan (2006–2010), Beijing also from several limitations. set a number of ambitious targets for pol- Often there is signi½cant attention up- lution reduction and improvements in the front but little follow-through past the stat- country’s energy practices: reduce emis- ed target of completion. In 1978, for ex- sions of sulfur dioxide by 10 percent, ample, Beijing initiated a series of large- reduce energy intensity by 20 percent, ex - scale tree-planting campaigns with the pand the forest coverage rate from 18.2 per - goal of covering 35.6 million hectares by cent to 20 percent, and many others. But 2050. The fourth phase of the project, the in March 2012, at the joint session of the Green Wall of China, began in 2002 and National People’s Congress and the Chi- included shelterbelt construction in north- nese People’s Political Consultative Con- ern China, conversion of farmland to nat- ference (cppcc), then-Premier Wen Jia- ural forests, and conservation of natural bao, reporting on the results of the 11th forests. Beijing reportedly invested as Five-Year Plan, conceded that Beijing had much as 460 billion yuan in the project, failed to meet a number of the environ- which according to the State Forestry mental targets. Those goals missed includ- Administration has resulted in 61.4 million ed reductions in energy intensity, sulfur trees being planted over the past three de - dioxide, nitrogen oxide (which instead of cades. China’s forest coverage reportedly decreasing by 1.5 percent actually increased grew to 20.36 percent in 2010 from 18.2 by 5.7 percent), and chemical oxygen de - percent in 2005. However, a 2011 survey mand, a measure of water pollution.23 by the Beijing Forestry University revealed Why did the Chinese government not that the afforestation project has an 85 per - meet its targets? As Zhang Ping, head of cent failure rate.25 Local of½cials had lit- the National Development and Reform tle political or economic incentive to en- Commission, noted in March 2012, “There sure proper implementation of the pro- are a lot of complicated reasons for fail- gram. Tree-planting efforts, many of ing to meet the targets [of the 11th Five- which engaged entire communities, pro- Year Plan] . . . the biggest is that we have duced a number of problems: planting not transformed our economic develop- foreign species with water needs beyond ment model. Our means of growth are still native capacity, planting trees too close too coarse and our structural adjustment together, and failing to care for the trees is lagging behind.” Zhang’s remarks re - after they were planted.26 flected the continued imperative of rapid The decentralized nature of China’s po - growth, energy-inef½cient industrial struc- itical system also means that Beijing often ture, and reliance on fossil fuels.24 fails to get policy buy-in from local of½-

188 Dædalus, the Journal ofthe American Academy of Arts & Sciences cials. Local environmental protection bu- environmental degradation and pollution Elizabeth reau of½cials’ primary economic bene½ts to local economies. These costs would then Economy and political obligations derive from local serve as a metric for evaluating the per- governments rather than from the Min- formance of local of½cials, accounting for istry of Environmental Protection. This both economic growth and environmen- creates ample opportunity for political tal stewardship. A few provinces, such as pressure as well as distorted incentives to Shanxi, embraced the process: of½cials prevent local environmental of½cials from there believed that the province’s envi- fully enforcing laws and regulations. Of the ronment and citizens’ health had suffered 1.3 percent of gdp that Beijing currently un duly from serving as the coal capital for spends on environmental protection (note: much of the rest of the country and, there- Chinese experts believe the percentage fore, should be compensated. Many more, should be closer to 2–4 percent of gdp),27 however, balked at the process, fearing that half ½nds its way into other local priori- adopting an evaluation metric of Green ties, such as infrastructure development.28 gdp would undermine the validity of Implementation of central directives also growth statistics. Provinces that were suffers from various elements of weak local reporting growth rates of 9 to 10 percent capacity. Local environmental protection could easily see their rates drop to 5 or 6 bureaus often lack the capacity to enforce per cent once environmental externalities laws and regulations, with too few human were included. The National Bureau of or ½nancial resources to oversee the facto- Statistics (nbs), which was charged with ries in their jurisdiction. Fines for polluting gathering and calculating the data, also re- enterprises are often ignored or negotiated sisted the campaign. It claimed that it did in such a way that continuously paying not have the ability to determine a Green ½nes is cheaper than following regulations. gdp accurately and that it did not believe These challenges are not unique to of½cials should be evaluated on such a China. Other highly decentralized states, basis. The nbs released only a partial re- such as India, face similar issues. A review port in 2006 and refused to release subse- of India’s environmental policy-making quent ½ndings. While the initiative ap - states: “A major shortcoming [in envi- peared to lie dormant for a number of ronmental protection] relates to the gap years, in 2013, following the air pollution between central and state-level authori- crises in Beijing and other Chinese cities, ties preventing consistent implementation China Daily published a piece calling for of federal legislation . . . the spcbs (State re newed efforts toward adopting a Green Pollution Control Boards) are embedded gdp: “It is generally believed that it is not in a dual command structure, as they also technical limits but local governments that receive funding and directives from state- have prevented such data from being re- level governments. . . . Moreover capacity leased. Such data releases might affect the of different spcbs is highly uneven.”29 promotion prospects of local of½cials. It is In China, outright opposition by local clear that if China wants to press on with authorities to central government environ- the uphill task, it must ½rst reshuffle its mental directives is also not uncommon. In per formance assessment methods for gov - 2005, the State Environmental Protection ernment of½cials.”30 The message is un- Administration (renamed the Ministry equivocal: until local cadres are held ac- of Environmental Protection in 2008) countable for the environment by the launched the Green gdp campaign, an ini- central government, the green implemen- tiative designed to calculate the costs of tation gap will remain.

143 (2) Spring 2014 189 Environ - At the same time, China’s decentralized eco-park could become models for many mental authoritarianism can bring bene½ts to the other urban development efforts, particu- Governance in China country’s environmental protection ef - larly as hundreds of millions of additional forts through its ability to conduct con- rural Chinese citizens transition into ur - trolled experiments at the local level. ban life over the next decades. China has invested billions of dollars in While China eagerly seeks input on ur- large eco-cities, models of green urban ban design and environmental technolo- design. In this effort, China often looks to gies from advanced industrialized coun- the international community to under- tries, it has been less interested in adopting stand best practices and access advanced certain of the political institutions that technologies. The most substantial of may contribute to more effective environ - these efforts is the Tianjin Eco-City, a joint mental protection. Missing from China’s development project between the Chinese environmental protection efforts, for ex- and Singaporean governments. Located ample, is the robust institutional mecha- just outside Tianjin and less than an hour nism for engaging with civil society, for- from Beijing, the eco-city project sits on mally organized ngos, the business com- 11.6 square miles of nonarable land that munity, and the Chinese public that typi- was previously uninhabited and unusable. cally exists in nonauthoritarian states. A Upon its completion, the city will house as comparative study by Andrew Whitford many as 350,000 residents. Already about and Karen Wong of eighty countries (in - 5,000 apartments have been sold. As much cluding China) indicates that democracy as 20 percent of the city’s energy will come has a statistically signi½cant and positive from renewable sources such as solar and effect on environmental sustainability.34 geothermal power, and 90 percent of In contrast to democratic developing coun- travel within the city will be by foot, bicy- tries, the formal role of private actors in cle, or public transportation. The city will China–whether in the business sector or also feature more green space than almost civil society–is much more circumscribed. any other Chinese city. Early reviews sug- In these other countries, environmental gest that the city planners have made a ngos have played critical roles in educat- substantial commitment to green transpor- ing policy-makers, as well as holding them tation through ample bus and bike lanes, accountable. In the Philippines, for exam- but have failed to develop pedestrian- ple, environmental ngos direct a Green friendly community spaces.31 Electoral Initiative that ranks politicians The city of Qingdao, as well, has part- on their environmental views and prac- nered with Germany to establish an eco- tices and publishes these ½ndings in ad- park that not only will be a center of clean- vance of elections. In Costa Rica, ngos technology investment, but also will itself provide formal environmental-law train- op erate with high environmental stan- ing to judges, police, and elected of½cials.35 dards.32 Shenyang, the largest city in north- In China, however, the two most estab- east China and once an industrial hub, is lished formal mechanisms–public partici- another example. In 2009, the city an - pation in the review of environmental nounced plans to collaborate with ibm and impact assessments (eias) and the citizen Northeastern University to create a “smart complaint system–are only spottily im - eco-city” to improve energy ef½ciency, plemented. With regard to public partici- water supply and use, and traf½c flow.33 pation in eias, as Chinese scholars have If such partnerships are successful, these noted, there are a number of limitations: eco-cities and the Sino-German Qingdao only a small percentage of projects are

190 Dædalus, the Journal ofthe American Academy of Arts & Sciences subjected to compulsory public partici- class intellectuals, professors, and sym- Elizabeth pation; the timing and duration of engag- pathetic newspaper reporters supported Economy ing the public is short; the method of se- the protests and called upon the govern- lecting those who can participate is often ment to rethink its distribution of resources biased; and the amount of information in favor of a stronger environmental pro- disclosed is often quite limited in an ef- tection effort. According to Lee and So, fort to prevent social unrest.36 these protests contributed signi½cantly Chinese citizens also have the right to to the evolution of a far more participatory engage the system through a formal com- political culture in Taiwan.40 plaint system: writing letters to local en - Engaging China’s educated middle class vironmental protection bureaus com- in environmental protest is reasonably re- plaining of air, water, and waste pollution. cent, dating back only to the 2007 protest According to the 2010 Environmental Statisti- in Xiamen, where university students and cal Yearbook, there were more than 700,000 professors organized a widespread protest such complaints in 2010.37 During the 11th against the planned siting of a PX (para- Five-Year Plan, the Ministry of Environ- xylene) factory near the city center. Since mental Protection itself received 300,000 that time, however, dozens of urban- petitions on environmental matters. But based, middle-class environmental pro- resolution of these issues remains dif - tests have occurred throughout the coun- ½cult. All told, there were only 980 ad - try. In July 2012, for example, protests ministrative court cases about eias and broke out in the southwestern province only 30 criminal cases from 2006 to 2010. of Sichuan, where residents of the small It is estimated that not even 1 percent of city of Shifang were upset by a planned environmental disputes are resolved in molybdenum copper plant. The facility court.38 would have been a US$1.64 billion project This lack of an effective institutional funded by the Sichuan Hongda Compa- mechanism for the Chinese people to par- ny,41 but residents of Shifang, led by stu- ticipate in the environmental policy- dents and joined by others from nearby making process or to get redress through towns and cities, feared that the plant the legal system has translated into a would have a negative impact on the envi- vibrant environmental protest movement ronment and public health.42 The state- in China. When citizens’ concerns are not supported Global Times estimated that sev- ad dressed satisfactorily, they turn to pro - eral thousand people took part in the pro- test to make their voices heard, either via tests,43 which turned violent, forcing the the Internet or on the street. The environ- police to use tear gas and stun grenades to ment has now surpassed illegal land ex - disperse the crowds.44 Thirteen protestors propriation as the leading source of social were injured45 and another twenty-seven unrest in China.39 were detained, six of whom were formally Taiwan experienced a similar phenom- charged.46 On the third day of demon- enon in the early 1980s through the lifting strations, local of½cials announced that of martial law in 1987. In a study of the the project would be halted.47 evolution of Taiwan’s environmental Later that month, inspired by Internet movement, Yok-Shiu Lee and Alvin So de- reports of the Shifang protest, thousands tail how local communities in many areas of protesters took to the streets of Qidong, of the island began to protest against the a coastal city in Jiangsu province, to chal- polluted water and air they felt was harm- lenge a pipeline that would discharge waste ing their health and livelihood. Middle- into the sea and potentially pollute a near-

143 (2) Spring 2014 191 Environ - by ½shery, as well as contaminate drinking effect. The question remains whether the mental water.48 Worried that wastewater origi- incentives, as well as implementation and Governance in China nating from Japan’s Oji Paper Company in enforcement mechanisms, will be put in the city of Nantong would not be cleaned place to ensure that this time the effort properly, a thousand or more protestors succeeds. (Reuters reported that there were about In each instance of environmental dem- one thousand,49 while the Asahi Shimbum onstration, local governments respond estimated ten thousand50) damaged gov- by acceding to the demands of the protes- ernment buildings, cars, and property on tors. According to Ma Jun, director of the July 27.51 Some demonstrators clashed Institute of Public Environment in Beijing: with police, and at least one police car was “The next leadership of China is going to overturned; hundreds of police arrived face a challenge on these environmental later in the day to protect government of - issues, which the previous leadership had ½ces.52 Fourteen people pleaded guilty to not seen so strongly for 30 years. For the encouraging the riot in which dozens of ½rst time, some local of½cials have begun police were injured, the local Communist to call us to learn more about how these party chief was stripped half-naked, and situations are handled in other countries protestors caused more than US$20,000 –they really worry about becoming the in damage. next protest targets.”56 In contrast to the Even Beijing has been confronted with often raucous engagement of the Chinese substantial citizen discontent as a result citizenry in environmental issues in the of its skyrocketing levels of air pollution. country, environmental ngos in China In January 2013, Premier Li Keqiang ½rst have adopted a far more measured ap- attempted to downplay the ability of the proach, relying on environmental laws Chinese government to address the prob- and regulations to advance their cause. De- lem: “The current situation wasn’t created spite numerous political and economic in one or two days, it accumulated over a obstacles, they have been at the forefront long time. Solving this problem will also of strengthening civil society in China, be a long-term process.”53 Yet just two advancing transparency, rule of law, and months later, facing mounting calls on the of½cial accountability. They also exist as Internet for more aggressive action, Li part of a much wider community of envi- stated that he would use an “iron ½st, ½rm ronmental activism, including the Chinese resolution and tough measures” to tackle media and international ngos. Over time, the pollution problem.54 By June, Beijing Chinese ngos have become far more had issued ten measures to reduce air pol- adventurous in the types of issues they lution, and by September, it announced the address, moving from environmental edu - “Action Plan for Air Pollution Prevention cation and biodiversity protection in the and Control.” The action plan was largely mid-1990s to advocating greater trans- a top-down initiative, including targets to parency and launching anti-dam initiatives reduce coal consumption, to limit concen- by the mid-2000s. Often they derive both trations of the harmful pollutant PM2.5, technical and economic support by part- and to eliminate high-polluting vehicles.55 nering with their international counter- Subsidies for electric cars and plans to parts. Since 2009, for example, Ma Jun has close down outdated factories were also worked with a U.S. ngo, the Natural Re- included as part of the leadership’s effort. sources Defense Council, to conduct an an- Many of these policies, however, have been nual transparency index, which “ranks the tried before or are already in place to little performance of 113 major Chinese cities

192 Dædalus, the Journal ofthe American Academy of Arts & Sciences in complying with environmental disclo- contrast, there is no such de½ning legal Elizabeth sure requirements.”57 While many cities precedent for citizen engagement. While Economy refuse to release the data, even though it a limited number of environmental ngos is required by law, some Chinese of½cials have had the right to bring environmental have become fans of greater transparency lawsuits through the court system, individ- as a result of work by ngos. One of½cial ual citizens have not. Moreover, a 2013 draft from Hunan Province People’s Congress of China’s Amendment of Environmental uses his Weibo account (a microblogging Law proposes that only one body, the gov - site similar to Twitter) to “name and ernment-organized ngo All-China Envi- shame” polluters, leading one named com- ronment Federation, will be allowed to ½le pany to put in place new environmental public-interest environmental lawsuits, cleanup technology.58 there by sharply limiting the number of Chinese ngos have also become active law suits that will be able to be launched. in the legal arena, which remains a weak The draft, unsurprisingly, has caused a ½re- link in the country’s environmental pro- storm of controversy among environmen- tection efforts. As is the case with other tal activists in China.62 socialist and formerly socialist countries Despite growing prominence, Chinese with strong command-and-control lega- environmental ngos also remain ham- cies, Chinese environmental laws are often pered by government regulations that not well- or fully-articulated and are ill- make it dif½cult for them to ½nd funding, suited to the demands of an emerging mar- expand their activities, and operate freely. ket-based economy. In a review of its own The government remains concerned that environmental protection process, the environmental activism could lead to a Vietnamese government cites legal norms broader push for political reform. Thus, that are “contradictory, overlapping, irra- environmental ngos lack both the inde- tional and unfeasible.”59 India as well faces pendence of action and legal protection a situation in which its laws and regula- that they enjoy in other developing coun- tions are ill-equipped to use market-based tries. In contrast to ngos in Indonesia and instruments to help protect the environ- India, for example, environmental ngos ment; its ½scal tools are also directed to in China are required to be registered “promote compliance with environmental with government bodies, which are then standards” rather than to “support incen - technically responsible for the actions of tives to invest in pollution control.”60 the ngos: the government body must ap- Yet India’s legal system is far more ac - prove an ngo’s membership and activi- cessible to the Indian citizenry, affording ties. In some cases, environmental ngos much greater opportunity for private cit- have been threatened with closure when izens to play a watchdog role, working political dissidents have tried to join. Chi- through the judiciary to “force state ac - nese environmental ngos are also not per- tion.” A 1985 Indian Supreme Court case, in mitted to establish branches in multiple which local environmental groups in the provinces; Beijing has long been con- state of Uttar Pradesh pursued a lawsuit cerned that such branches could provide an against local limestone quarries, provided informal mechanism to develop a broad- a legal precedent that established public- based political challenge to the Commu- interest litigation as a “central pillar of nist Party. Indian environmental governance” and pro vided the judiciary with a “key role in In most countries, effective environmen- driving policy changes.”61 In China, by tal protection depends on a partnership

143 (2) Spring 2014 193 Environ - –sometimes cooperative, sometimes con- urban middle class, along with wide- mental tentious–among local environmental spread adoption of the Internet, however, Governance in China protection of½cials, ngos, the media, the is changing the relative power dynamic public, and the central government. China be tween the state and society. As China’s has all the actors in place, but its system environmental challenges continue to of decentralized authoritarianism does not mount, this tension between largely inef- provide adequate incentives or institu- fectual formal government institutions tional mechanisms to help ensure effec- and processes, on the one hand, and grow- tive environmental protection; the judi- ing pressure from civil society, on the cial system, for example, lacks the capacity other, may ½nd resolution in a more flex- and independence to serve as an effective ible and open system with new channels check on corporate and of½cial malfea- of engagement between government and sance. In addition, Beijing’s lack of trust the people. In the meantime, though, it is in nongovernmental actors further means an uneasy, politically fraught situation de - that the country is unable to take full ad - ½ned by of½cial adherence to traditional, vantage of the expertise, innovation, and often ineffectual modes of government watchdog capacity that such groups bring policy-making at the national level and cri- to many other countries. The rise of the sis management at the local level.

endnotes 1 Yale University, 2012 Environmental Performance Index, http://epi.yale.edu/previous-work. 2 Jianyu Jin, “Stricter Central Air Standards Hard for Cities to Introduce,” Global Times, March 2, 2012, http://www.globaltimes.cn/NEWS/tabid/99/ID/698367/Stricter-central-air-standards -hard-for-cities-to-introduce.aspx. 3 Qingfeng Zhang and Robert Crooks, “Toward an Environmentally Sustainable Future: Country Environmental Analysis of the People’s Republic of China,” Asian Development Bank (August 2012), http://www.adb.org/sites/default/½les/pub/2012/toward-environmentally-sustainable -future-prc.pdf. 4 U.S. Energy Information Administration, “China Analysis Brief,” rev. April 22, 2013, http:// www.eia.gov/countries/cab.cfm?½ps=CH. 5 Lin Boqiang, “Powering Future Development,” China Daily, January 20, 2012, http://www .chinadaily.com/cn/cndy/2012-01/20/content_14479504.htm. 6 Manipadma Jena, “China Battles Deserti½cation,” Inter Press Service, July 5, 2012, http:// www.ipsnews.net/2012/07/china-battles-deserti½cation. 7 Krista Mahr, “Heavy Metal: 12 Million Tons of Chinese Rice Contaminated,” Time, February 23, 2011, http://science.time.com/2011/02/23/heavy-metal-millions-of-tons-of-chinese-rice -contaminated/. 8 Mandy Zuo, “Pollution from Heavy Metals Devastates Farmland,” South China Morning Post, February 16, 2013, http://www.scmp.com/news/china/article/1151311/pollution-heavy -metals-devastates-farmland. 9 “China’s Water Crisis a Growing Threat,” March 26, 2012, http://www.ecns.cn/2012/03-26/ 11135.shtml. 10 Cecilia Tortajada and Asit K. Biswas, “The Problem of Water Management,” China Daily, March 5, 2013, http://europe.chinadaily.com.cn/opinion/2013-03/05/content_16276794.htm.

194 Dædalus, the Journal ofthe American Academy of Arts & Sciences 11 Andrew Jacobs, “China Issues Warning on Climate and Growth,” The New York Times, February Elizabeth 28, 2011, http://www.nytimes.com/2011/03/01/world/asia/01beijing.html?_r=0. Economy 12 Edward Wong, “Cost of Environmental Damage in China Growing Rapidly Amid Industri- alization,” The New York Times, March 29, 2013, http://www.nytimes.com/2013/03/30/ world/asia/cost-of-environmental-degradation-in-china-is-growing.html. 13 Lee Liu, “Made in China: Cancer Villages,” Environment (March/April 2010), http://www .environmentmagazine.org/Archives/Back%20Issues/March-April%202010/made-in-china -full.html. 14 Shi Jiangtao, “Millions of Hectares of Farmland and 12m Tonnes of Grain Contaminated,” South China Morning Post, July 19, 2012, http://www.scmp.com/article/738908/millions -hectares-farmland-and-12m-tonnes-grain-contaminated. 15 Yale University, 2012 Environmental Performance Index. 16 “The Global Burden of Disease Study 2010,” (2012), http://www.thelancet.com/themed/ global-burden-of-disease. 17 Yu Runze, “Vice Premier Li Keqiang Vows to Combat Air Pollution,” Sina English, January 15, 2013, http://english.sina.com/china/2013/0114/548935.html. 18 Victoria Ruan, “China Seeks $536 Billion of Investments to Protect Environment,” Bloomberg News, December 21, 2011, http://www.bloomberg.com/news/print/2011-12-21/china-seeks -536-billion-of-investments-to-protect-environment.html. 19 The Pew Charitable Trusts, “Who’s Winning the Clean Energy Race?: 2012 Edition,” April 17, 2013, http://www.pewenvironment.org/uploadedFiles/PEG/Publications/Report/ -clenG20-Report-2012-Digital.pdf. 20Bloomberg News, “China to Restrict Coal Demand, Output to 3.9 Billion Tons,” March 22, 2012, http://www.businessweek.com/news/2012-03-22/china-to-restrict-coal-demand-out put-to-3-dot-9-billion-tons. 21 Jim Bai, “China 2011 Raw Coal Output Up 8.7 pct y/y–Report,” Reuters, February 28, 2012, http://www.reuters.com/article/2012/02/28/china-coal-output-idUSL4E8DS4AO20120228. 22 Olivia Boyd and Tan Copsey, “The Plan: What’s in the Five-Year Plan?” in ChinaDialogue, China’s Green Revolution: Energy, Environment and the 12th Five-Year Plan, April 14, 2011, https:// s3.amazonaws.com/cd.live/uploads/content/½le_ch/4255/china_s_green_revolution_ebook_ 2001en.pdf. 23 Lucy Hornby, “China’s Missed Pollution Goals Show Failure to Change-ndrc,” Reuters, March 5, 2012, http://www.reuters.com/article/2012/03/05/china-emissions-idUSL4E8E54 ZT20120305. 24 Ibid. 25 Jon Luoma, “China’s Reforestation Programs: Big Success or Just an Illusion?” Yale Environment 360, January 17, 2012, http://e360.yale.edu/feature/chinas_reforestation_programs_big_ success_or_just_an_illusion/2484/. 26 Elizabeth Economy, “The Environment,” in Handbook of China’s Governance and Domestic Poli- tics, ed. Chris Ogden (New York: Routledge, 2012), 199–209. 27 Minxin Pei, “China’s Environment: An Economic Death Sentence,” cnnmoney, January 28, 2013, http://management.fortune.cnn.com/2013/01/28/china-environment-economic-fallout/. 28 Stephen Chen, “Money for Fighting Pollution ‘Wasted,’” South China Morning Post, April 1, 2012, http://www.scmp.com/article/698060/money-½ghting-pollution-wasted. 29 Rainer Quitzow, Holger Bar, and Klaus Jacob, “Environmental Governance in India, China, Vietnam and Indonesia: A Tale of Two Paces,” Environmental Policy Research Centre ffu- Report 01-2013, 5.

143 (2) Spring 2014 195 Environ - 30 “Green gdp Needed,” China Daily, February 27, 2013, http://www.chinadaily.com.cn/cndy/ mental 2013-02/27/content_16258973.htm. Governance in China 31 Sue-Lin Wong and Clare Pennington, “Steep Challenges for a Chinese Eco-City,” The New York Times Green Blog, February 13, 2013, http://green.blogs.nytimes.com/2013/02/13/steep -challenges-for-a-chinese-eco-city/. 32 Jing Lin and Chuanjiao Xie, “German Know-How on Tap in Qingdao,” China Daily, June 22, 2012, http://europe.chinadaily.com.cn/epaper/2012-06/22/content_15518612.htm. 33 Jiawei Zhang, “ibm, Shenyang and Northeastern University Unveil Eco-City Collaborator,” China Daily (online), September 18, 2009, http://www.chinadaily.com.cn/bizchina/2009 -09/18/content_8710197.htm. 34 Andrew B. Whitford and Karen Wong, “Political and Social Foundations for Environmental Sustainability,” Political Research Quarterly 62 (1) (March 2009): 196–197. 35 Paul F. Steinberg, “Welcome to the Jungle: Policy Theory and Political Instability,” in Paul F. Steinberg and Stacy D. VanDeveer, Comparative Environmental Politics (Cambridge, Mass.: mit Press, 2012), 272. 36 Yuhuan Zhang, Xiaowen Liu, Yunjun Yu, Guojian Bian, Yu Li, and Yingxian Long, “Challenge of Public Participation in China’s eia Practice,” paper presented at the 32nd annual meeting of the International Association for Impact Assessment, Porto, Portugal, May 27–June 1, 2012. 37 Ministry of Environmental Protection, “2010 Environmental Statistical Yearbook” [“2010 Nian Huanjing Tongji Nianbao”], http://wenku.baidu.com/view/b0111e88a0116c175f0e48d5.html. 38 John Kennedy, “Environmental Protests in China on Dramatic Rise, Expert Says,” South China Morning Post, October 29, 2012, http://www.scmp.com/news/china/article/1072407/ environmental-protests-china-rise-expert-says. 39 Bloomberg News, “Chinese Anger Over Pollution Becomes Main Cause of Social Unrest,” March 6, 2013, http://www.bloomberg.com/news/2013-03-06/pollution-passes-land -grievances-as-main-spark-of-china-protests.html. 40 Yok-Shiu F. Lee and Alvin Y. So, eds., Asia’s Environmental Movements (Armonk, N.Y.: M.E. Sharpe, 1999), 34–42. 41 Brian Spegele, “Planned China Metals Plant Scrapped,” The Wall Street Journal, July 3, 2012, http://online.wsj.com/article/SB10001424052702304211804577504101311079594.html. 42 bbc, “China Factory Construction Halted amid Violent Protests,” July 3, 2012, http://www .bbc.co.uk/news/world-asia-china-18684895. 43 Ibid. 44 Spegele, “Planned China Metals Plant Scrapped.” 45 bbc, “China Factory Construction Halted amid Violent Protests.” 46“Timeline of Shifang Protests,” Caixin online, July 5, 2012, http://english.caixin.com/2012-07 -05/100407585.html. 47 Ibid. 48 Jane Perlez, “Waste Project is Abandoned Following Protests in China,” The New York Times, July 28, 2012, http://www.nytimes.com/2012/07/29/world/asia/after-protests-in-qidong -china-plans-for-water-discharge-plant-are-abandoned.html?_r=0. 49 John Ruwitch, “China Cancels Waste Project after Protests Turn Violent,” Reuters, July 28, 2012, http://www.reuters.com/article/2012/07/28/us-china-environment-protest-idUSBRE86 R02Y20120728. 50 Bloomberg News, “Chinese City Halts Waste Project after Thousands Protest,” July 29, 2012, http://www.bloomberg.com/news/2012-07-29/chinese-city-halts-plant-s-waste-project-after -thousands-protest.html.

196 Dædalus, the Journal ofthe American Academy of Arts & Sciences 51 Ibid. Elizabeth Economy 52 Ibid. 53 “Li Keqiang Calls for Patience on China Efforts to Curb Smog,” Bloomberg News, January 15, 2013, http://www.bloomberg.com/news/2013-01-14/china-shuts-factories-in-latest-bid-to -ease-hazardous-pollution.html. 54 “Premier Li vows to tackle environment, food problems ‘with iron ½st,’” Xinhua, March 17, 2013, http://news.xinhuanet.com/english/china/2013-03/17/c_132240293.htm. 55 “China’s New Measures to Combat Air Pollution Toughest to Date,” China Brie½ng, October 10, 2013, http://www.china-brie½ng.com/news/2013/10/10/china-new-measures-to-combat-air -pollution-toughest-to-date.html. 56 Christina Larson, “Protests in China Get a Boost from Social Media,” Bloomberg BusinessWeek, October 29, 2012, http://www.businessweek.com/articles/2012-10-29/protests-in-china-get-a -boost-from-social-media. 57 Barabara Finamore, Wang Yan, Wu Qi, and Christine Xu, “A Step Forward for Environ- mental Transparency in China,” National Resources Defense Council Staff Switchboard Blog, March 29, 2013, http://www.switchboard.nrdc.org/blogs/b½namore/a_step_forward_for_ environment.html. 58 Ibid. 59 The Socialist Republic of Viet Nam, “National Strategy for Environmental Protection Until 2020 and Vision Toward 2030,” Ha Noi, 2012. 60Quitzow, Bar, and Jacob, “Environmental Governance in India, China, Vietnam and Indo - nesia,” 4. 61 Ibid., 6. 62 Jiabao Du, “Experts, Activists Call Proposed Amendment to China’s Environment Law ‘Monopolization’ of Litigation,” Tea Leaf Nation, July 15, 2013, http://www.tealeafnation.com/ 2013/07/amending-the-environmental-law-will-environmental-public-interest-litigation-be -monopolized/.

143 (2) Spring 2014 197 Board of Directors Don M. Randel, Chair of the Board Diane P. Wood, Chair of the Council; Vice Chair of the Board Alan M. Dachs, Chair of the Trust; Vice Chair of the Board Jerrold Meinwald, Secretary Carl H. Pforzheimer III, Treasurer Nancy C. Andrews David B. Frohnmayer Helene L. Kaplan Nannerl O. Keohane Roger B. Myerson Venkatesh Narayanamurti Samuel O. Thier Pauline Yu Louis W. Cabot, Chair Emeritus

Inside back cover: A woman walks her pet dog through a residential and commercial complex in a wealthy district in Beijing, China. © REUTERS/Kim Kyung-Hoon. Cover_Spring 2014 3/7/2014 9:55 AM Page 2