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Foreign Economic Policy Formulation and Implementation in China: China-Asean Free Trade Agreement

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Foreign Economic Policy Formulation and Implementation in China: China-Asean Free Trade Agreement View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by ScholarBank@NUS FOREIGN ECONOMIC POLICY FORMULATION AND IMPLEMENTATION IN CHINA: CHINA-ASEAN FREE TRADE AGREEMENT DU DING DING (Master of Law, Beijing Normal University, China) ATHESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY EAST ASIAN INSTITUTE FACULTY OF ARTS AND SOCIAL SCIENCE NATIONAL UNIVERISTY OF SINGAPORE 2007 ACKNOWLEDGEMENTS I am first of all indebted to my dissertation committee members: Prof. Zheng Yongnian, Prof. Lee Lai To and Dr. Lam Peng Er. They have provided me with inspiration and enthusiasm as well as invaluable suggestions. As my main supervisor, Prof. Zheng has spared much time and effort in discussing the structure and theoretical framework of my dissertation. He was always ready to help whenever I ran into any difficulty. My great appreciation also goes to Prof. Wang Gungwu. During the three years of my stay in Singapore, he was always kind to me and helpful in both my study of English and my research. His unequaled assistance to me began as early as 2003 when I was a visiting scholar at the East Asian Institute (EAI). I would also like to thank him for writing the recommendation letter for me when I applied for a PhD scholarship. During my period of study, he generously shared with me many precious ideas and suggestions. Special thanks also go to Prof. John Wong. He provided ideas to improve the structure of my dissertation. I would also like to express my sincere gratitude to Prof. Zou Keyuan, Dr. Bo Zhiyue, and Dr. Lai Hongyi. All of them shared with me their views on the topic in the initial stage of my preparation for the dissertation. I would also like to thank Miss Alicia Ng, Mr. Teng Siow Song, and Mr. Lye Liang Fook, who edited and polished the chapters for me. I am greatly indebted to all of their help. My sincere thanks also go to the large number of interviewees during my four months of fieldwork in Beijing, Yunnan Province, Guangxi Zhuang i Autonomous Region as well as in Singapore. Both government officials and academic scholars generously shared with me their opinions and information. Without their help, I would not have had such a deep understanding of the policy formulation and implementation processes of the Chinese government. My appreciation also goes to my former colleagues in the International Department, Communist Party of China Central Committee. Besides supporting my long-term study leave, they also assisted me in my fieldwork and shared with me their experiences as government officials. I would like to thank EAI for giving me the financial support, as well as fieldwork sponsorship during my period in Singapore. The help of Ms. Lian Wee Li and Mr. Tan Swee Thiam (James) are also greatly appreciated. I also appreciate the assistance of the EAI Librarians and those from the Central Library, in particular Ms. Ng Hui Hoon and Angela. They were always ready to lend a hand no matter how frequently I approached them. Last but not least, my greatest gratitude goes to my beloved husband, who patiently stood by my side and helped me through those tough years. Without his full support and love, this project could not have been completed so timely. Words cannot express my sincere thanks to him, as well as my kind and selfless parents. My appreciation also goes to my younger brother and sister-in-law, who spent time with my husband during my long time away in Singapore. I will always remember their strong support and understanding. ii TABLE OF CONTENTS Acknowledgments………………………………………………………………… i Summary ……………………………………………………………………… ..vii List of Tables ………………………………………………………… ..… … ...… ix List of Figures …………………………………… ..……………………… .…….x List of Abbreviations …………………………………………………………… xi Chapter One: Introduction: Integrating Policy Formulation and Policy Implementation………………………………………… ...… … … … .… … ...… … 1 I. A Framework of China’s Foreign Economic Policy Making: Two-Front Games Versus Two-Level Games ....................… ..… ..… … ....1 II. Explaining China’sForeign Economic Policy Formulation and Implementation.............................................................................................7 Review of Approaches on Policy Formulation .........................................… 7 Review of Approaches on Policy Implementation......................................20 Integrating Policy Formulation and Implementation: The Perspective of Dynamic Authoritarianism..........................................................................24 III. Research Design: Research Questions and Methodologies .....................................................................................................… … .… ....31 IV. The Structure of the Study… … … ...… … … … … … … … .… … .....39 Chapter Two: Structure and Organs of China’sForeign Economic Policy Formulation and Implementation: Three Layers………………… .………… 42 I. The First Layer: The Top Leadership Nuclear Circle… … … … .… ...42 The Paramount Leaders…………………………..……………….…….43 The Political Bureau… … … … … … … … … … … … … … … .… … … .… … 43 The Leading Small Group………………………………….............… 45 II. The Second Layer: Central and Local Bureaucracies……… 48 Bureaucracies at the Central Level…………..……………..………… 49 Bureaucracies at the Local Level…………………………...……..….52 III. The Third Layer: Think Tanks … … … … … … … … … .… ...… … ..… 56 iii Institutes Affiliated with Government Bureaucracies………… .............… 59 Research Institutes and Departments in Universities……… ...… ..… … … 67 IV. Conclusion… … … … … … … ..… … … … … … … ...… … … … … … … … 69 Chapter Three: Policy Formulation, Justification and Implementation: From Idea to Policy, and Further to Practice …… .……………………… ...… ......71 I. New Changes in China’sForeign Economic Making Process…… .....71 New Qualitative Changes……………………………… ..… … … .… … … ..72 New Quantitative Changes………………………………… ...… … ....… … 74 II. China’s Foreign Economic Policy Formulation Process: Three Procedures…………………………………...…………………………..80 Policy Initiation..........................................................................……… ......83 Policy Justification .................................................................................….84 Policy Coordination .....................................................................................86 III. China’sForeign Economic Policy Implementation Process: Formal and Informal Avenues …………………………………… ...…………… 88 The Increasing Bargaining Power of Local Governments ........................90 The Motivations of Bargaining ...................................................................99 The Avenues of Bargaining..............................................................…….104 Factors That Affect Policy Implementation .............................................111 IV. Conclusion………………………………………… ..… … ....… … … .114 Chapter Four: China’sASEAN Policy: From Bilateralism to Pro-Active Multilateralism…………………………………………………… 1 1 5 I. The First Period: Bilateralism: From the Early 1980s to the Late 1980s… ……………………………………… ..… ……………………….116 II. The Second Period: From Bilateral to Reactive Multilateralism: From the Early 1990s to the Late 1990s .................................................122 III.The Third Period: From Reactive Multilateralism to Pro-Active Multilateralism: From the End of the 1990s Until the Present ............126 IV. Conclusion… … … … … … … … … … … … … … ..… … … … … .……… 135 iv Chapter Five: Policy Formulation and Justification: The CAFTA Case……………………………………………………… ...… ……………… ...136 I. The Signing of the CAFTA: Policy Formulation Process of the CAFTA… … .........................................................................................… ..136 II. Policy Initiation by Former Premier Zhu Rongji and the Policy Considerations of the Chinese Government on the CAFTA ................150 Former Chinese Premier: Zhu Rongji..................................................… 151 Mutual-Economic Gains as the Policy Basis in the CAFTA Initiative by the Chinese Government ....................................................................… ...154 Strategic Considerations as the Ultimate Goal in the CAFTA Initiative by the Chinese Government ...........................................................................167 Influence of International Trend and Environment in the CAFTA Initiative by the Chinese Government.......................................................173 III. Policy Coordination and the Supportive Role of the Central and Local Bureaucracies…………………………………………………….176 Main Functions of the Central Bureaucracies in the CAFTA................177 Main Functions of the Local Bureaucracies in the CAFTA ...................184 IV. Policy Justification by Think Tanks and Other Academic Scholars………………………………………………………………… 185 V. Conclusion………………………………………………......…...… ..195 Chapter Six: Policy Implementation: The CAFTA Case… … … … … … … 198 I. The Sources of The Bargaining Power...........................................….201 II. The Motivations of Bargaining and Incentives for Policy Implementation.........................................................................................209 Bargaining Because of Economic Interests .............................................209 Bargaining Because of the Difficulties and Challenges Posed ...............218 Bargaining for More Financial Support and Preferable Policies...........223 III. The Avenues of Bargaining...............................................................238 Formal Avenues of Bargaining: Reports
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