Essay
landgrab

by Peng Chun

Centralisation and decentralisation – not a crossroads for China

Although it is widely known that 2014 is the Year of Horse, it is less known is that it is also a Year of Jiawu – a painful reminder of the 1894 War of Jiawu when China was defeated and humiliated by Japan. Two sexagenary cycles later, in a way symbolized by the Gregorian calendar’s replacing of the traditional lunar calendar, Chinese histography is no longer cyclical but linear and progressive. However, the end of history is hardly around the corner and China is still a country in transition.

A plethora of catchphrases have been used to describe this period full of uncertainties, among which “deep-water zone” was a popular one. This though, is not referring to the increasingly heated border dispute between China and Japan over the East Sea—what happened 120 years ago is anything but imminent. The real challenge for the People’s Republic today is broadly perceived to be from within rather than without. A question frequently asked is should China centralize or decentralize?

Before attempting any answer on our own, let’s look at the official blueprint. In the long-awaited Decision on Major Issues concerning Comprehensively Deepening Reform (hereinafter the Decision) passed at the Third Plenum of the 18th Party Congress last year, central government is mandated to devolve powers to local government on all economic and social matters that are more conveniently and effectively administered at the local level. In particular, local governments will be permitted to raise public debt to fund urban development, which has been hitherto formally prohibited by the Budget Law – even if in reality it happens across the country in various disguised forms.

However, we cannot then conclude that decentralization is the trend because the same document has opted for centralization on other issues. The Decision states in general terms that the administrative responsibilities and spending powers of the centre will be moderately strengthened. More specifically, it promises to explore establishing regional courts with concentrated jurisdiction cutting across administrative localities. It also claims to grant more powers to the superior party disciplinary agencies to lead the subordinate bodies and conduct investigations.

The Party’s plan demonstrates clearly that both decentralizing and centralizing tendencies will be present in China over the next decade. And this is with good reasons. Centralization is to make the centre take on more responsibilities in handling cross-regional affairs that by nature require unified decision-making. It also helps to ensure that the courts and party disciplinary organs are ringfenced from local governments’ interference to perform their duties more independently.

On the contrary, decentralization is the best way to avoid the rigidity and ignorance of orders imposed from above and to enhance grassroots dynamism and innovativeness. Therefore, it is a no-brainer to say that different areas shall be dealt with differently. To reduce a task as complicated as governing China to a one-or-the-other choice between centralization and decentralization is at best absurd and at worst misleading.

But that’s not quite the point. It is basically a straw man, since no-one would sensibly propose a sweeping solution for China to centralize or decentralize across the board. Of course a bit of both is needed and the critical question is how to get the best mixture. But here again there are problems in applying the conceptual framework of centralization and decentralization in the Chinese context, of which the landmark speech of Mao Zedong in 1956 is most symptomatic.

In On the Ten Major Relationships, Mao remarked that the central-local relationship constitutes a contradiction. To resolve it, he urged the enlargement of local power without losing unified central leadership. Despite his ingenious exercise of the dialectical method and sharp awareness of the then emerging evils of central planning, the Chairman fell prey to an entrenched understanding of centralization and decentralization in China.

The former is translated in Chinese as “concentration of power”/ji quan (集权) and the latter as “devolution of power”/fen quan (分权), showing that power is usually, if not always the focus. In this way the other part of the equation has been overlooked, i.e. the accountability of authorities, or ze (责) in Chinese. As is well known, under the strict nomenklatura and performance appraisal system public accountability in China is upward within the hierarchy. Few would be fooled by the written constitutional arrangement that Chinese local governments answer to their corresponding people’s congresses. In fact they are accountable to the governments higher up and eventually to the central authority in Beijing.

Such a centralized accountability mechanism entails two things: one is that the performance targets of local administration are set from above and the other is that lower level authorities and officials are evaluated and held accountable accordingly. This can be coupled with a centralized or decentralized power structure.

When both power and accountability are centralized, the subordinate operate by diligently following orders and meeting targets, which leads to the ossification of governance.

Conversely, when power is devolved but accountability remains centralized, it spawns a series of different, but equally gnawing, problems. For one thing, the centrally-determined agenda is often incapable of reflecting and accommodating local variations. For another, local governments may trick the evaluation game by faking performance results or concealing costs of accomplishing the task.

A third problem arises where the central authority can only shift the blame down to the local level to a certain extent if the local governments persistently fail or fake. A tipping point will come when the system gets questioned as a whole.

A telling example of all this is China’s land administration. For decades local governments have been engaging in massive and oftentimes unlawful land seizures which have given rise to rampant rights abuses and widespread social unrest. Numerous measures had been adopted during the past decade to tackle this problem. Most notably, the 2004 amendment to the Land Administration Law lifted the power of approving expropriation from the sub-provincial level up to the provincial governments and State Council.

Since the same year, a quota system has prescribed the annual maximum amount of agricultural land expropriated for non-agricultural use in every locality. Moreover, in 2006 a national land supervision regime was put in place with nine cross-jurisdictional land law enforcement bureaus overseeing across the country.

In 2008, a concerted effort was made by several central ministries to discipline individual local officials for violating rules of expropriation. However, these centralizing measures largely failed to stop the abuses of power. According to the only official data published so far on the actual scale of land expropriation in China, between 2004 and 2010, around 5.81m acres of rural land were expropriated,[1] compared with just 3.2m acres from 1961 to 2001, an estimate from a research team led by Chen Xiwen, the renowned scholar-turned-official specializing in China’s rural issues.[2]

Many have identified two reasons for this. First is the enormous top-down pressure on local governments to promote urbanization and industrialization and to boost economic growth in their jurisdictions. Second, since the 1994 tax-sharing reform intended to enhance the national government’s fiscal capacity, local authorities have been revenue-hungry and have used land seizures to fund urban development and public service delivery.

Taking land proves to be the best means available for local governments to realize the above two goals at one stroke: land is acquired relatively inexpensively and transferred at higher prices for commercial and industrial uses. This then frustrates the centralizing measures to better keep them in line. As has been well documented, local governments constantly feel the urge to exceed the allocated land quota, which is seen as too limited to satisfy local demands. And they have been more than creative in bypassing centralized supervision and control either individually[3] or in collusion.

The centre has always taken a strong stance (at least on paper) by frequently issuing sternly-worded warnings against local misconduct, resulting in a now widely-observed phenomenon of “bifurcation of the state” that means that in the eyes of many ordinary Chinese the central state stands for justice whilst the local state is a cipher for injustice.[4] However, it is unlikely is this will last for long as more and more people come to realize that it is not just the local “bad guys” that are to blame. Rather, at root it is a structural problem and the centre too is culpable.

That said, it might be argued that the above is actually an example of unbalanced centralization or decentralization of power, depending on how you look at it. One side of the coin is that with concentrated fiscal powers the centre should have taken on more administrative responsibilities. The other side is that with more administrative responsibilities the local state should have been given more fiscal powers. A readjustment along this line will reduce the local government’s incentive to expropriate land massively and unlawfully, which as noted above is precisely how the Decision frames its solution.

Furthermore, the Decision endorses the strategy that designates different areas in China as function-oriented zones with differentiated development targets, empowering local governments to adapt policies to local particularities. All these reform initiatives confirm once again that China faces not a dichotomous choice of either centralization or decentralization. Yet they can still be explained within the framework of power centralization and decentralization. And it seems that in terms of land administration, all that China needs for future reform is a balanced and coordinated hybrid of both. But is it?

Imagine the following. In an ideal world, Chinese local governments are all sufficiently funded to pursue carefully tailored public policy and provide genuinely desired public services. With its focus on national and cross-provincial matters, the centre merely promulgates broad-brush guidelines to the local and does not impose specific targets or interfere at the micro level. Courts and party disciplinary agencies become truly independent and effective in delivering justice and curbing corruption. Under this circumstance, there will be no more abuses of land takings power.

But a world like that is hardly the end of history. Suppose you are a resident of a Chinese city, the government of which has decided to build a high-speed rail link up to the provincial capital. Unfortunately you live in the vicinity and face impending expropriation. The project is environment-friendly and enormously conducive to local economy. Compensation is also fairly high. You have no reason to object other than being unwilling to leave the land many generations of your family regard as home.

Now, going to court is of limited use because land expropriation is intrinsically a political issue on which the non-elected judiciary usually and justifiably defers to the government. Nor does it help to alert the party disciplinary agencies without any sign of corruption. There is no point either to petition the central government for it now takes a hand-off approach towards local affairs. Anyhow, you do not really have much ground to protest and may well be thought as an annoying “nail household” even by your own neighbors. Yet you still feel being mistreated due to the fact that you have not had a say in the decision-making process and there is no way to make the government accountable for that.

In this sense, centralization and decentralization of government power are never the whole story. People outside government ought to be offered the same privileges enjoyed by superior authorities to set the agenda of local administration and hold the local governments to account accordingly.

True, over the past decade in China, public participation in legislation and administrative rule-making has been on the rise and become more regularized. The media, traditional and new, have played an increasingly active role in exposing failures and scandals of governments and officials. And there are cases where the city mayor publicly apologized to the residents for misadministration. Nonetheless, in the absence of an institutionalized downward accountability mechanism, more often than not it takes “mass incidents” to make people’s concerns heard and attended to by the authorities. Therefore, it is vital to transcend the paradigm of centralization and decentralization, which has been understood in China to focus on government power. Of equal if not more importance is the strengthening of government accountability to the wider public.

However, a possible counterargument is that this too is a form of decentralization, namely transferring the power of superior state authorities to non-state actors. In fact, the reform era has witnessed decentralization of this kind one round after another from the introduction of the market mechanism to the development of a voluntary sector. Many of what used to be government functions are now performed by private companies and NGOs.

Nevertheless, significant and positive as these changes may be, to a large extent they are of a pragmatic and utilitarian nature. Markets and social organizations have been accepted and fostered by the state first and foremost because they are far more efficient than government in organizing the economy and carrying out certain activities. The same efficiency-based rationale has also been the ethos of the power centralization and decentralization envisioned in the Decision, which stresses on “streamlining” structure and “optimizing” functional division within the government. This may be called the managerial mode of governance, which in a deeper sense manifests the domination of instrumental rationality in modern societies.

As China endeavours to modernize its “governance system” and “governance capability”, chances are that it falls into what Max Weber famously dubbed the “iron cage” of modernity: while being highly technically rational and efficient to achieve a given set of objectives, it loses sight of the profound truth that governance is more than managerial calculation and fine-tuning. Essentially it is political in the sense that the very objectives should be deliberated and debated by citizens and that the government serves as a platform for them do so as masters instead of subjects.

Therefore, if “decentralizing” the power of accountability to the public is for the purpose of reducing resistance to policy implementation or complementing the central control over local states, there remains a fundamental injustice that people are treated not as ends but means. In light of this, whatever label we attach to the strengthened downward accountability in China, be it participatory democracy or communicative rationality, we’d better not cast it in the language of decentralization for the strong instrumental connotation thereof.

To be clear, in no way is the above analysis suggesting that we should abandon the centralization/decentralization paradigm, which as illustrated – not least by the Decision – continues to be a valid framework for describing and assessing reforms in China. What it does show, though, is that as analytical categories, centralization and decentralization constitute a false dilemma for China in two senses. On the one hand, what China needs is not simply either one of them but a balanced mixture of both. On the other hand, and more importantly, if China is to navigate safely through the “deep-water zone” and to prevent the “century of humiliation” from repeating itself, the exclusive emphasis on power and the managerial logic ingrained in the Chinese conceptualization of centralization and decentralization must be overcome. It is for these reasons that we should not consider China at a crossroad between centralization and decentralization.

Chen X, Zhao Y and Luo D, Review and Outlook of 30-Year Reform in Rural China (zhongguo nongcun gaige sanshi nian huigu yu zhanwang) (People’s Press 2008)

Lin GCS, Developming China: Land, Politics and Social Conditions (Routledge 2009)

China Ministry of Land Resources (ed) China Land Yearbook 2011 (Dizhi Press 2011)

Cai M, ‘”Flying Land”: Intergovernmental Cooperation in Local Economic Development in China’ 2010 <http://extranet.isnie.org/uploads/isnie2011/cai.pdf>

Guo X, ‘Land Expropriation and Rural Conflicts in China’ (2001) 166 China Quarterly 422

Chen X, Zhao Y and Luo D, Review and Outlook of 30-Year Reform in Rural China (zhongguo nongcun gaige sanshi nian huigu yu zhanwang) (People’s Press 2008)

Lin GCS, Developming China: Land, Politics and Social Conditions (Routledge 2009)

China Ministry of Land Resources (ed) China Land Yearbook 2011 (Dizhi Press 2011)

Cai M, ‘”Flying Land”: Intergovernmental Cooperation in Local Economic Development in China’ 2010 <http://extranet.isnie.org/uploads/isnie2011/cai.pdf>

Horsley JP, ‘Public Participation in the People’s Republic: Developing a More Participatory Governance Model in China’ 2009 <http://www.law.yale.edu/documents/pdf/Intellectual_Life/CL-PP-PP_in_the__PRC_FINAL_91609.pdf>

Guo X, ‘Land Expropriation and Rural Conflicts in China’ (2001) 166 China Quarterly 422

References

[1] China Ministry of Land Resources (ed) China Land Yearbook 2011 (Dizhi Press 2011), p.89.

[2] Xiwen Chen, Yang Zhao and Dan Luo, Review and Outlook of 30-Year Reform in Rural China (zhongguo nongcun gaige sanshi nian huigu yu zhanwang) (People’s Press 2008), p. 192.

[3] George C.S. Lin, Developming China: Land, Politics and Social Conditions (Routledge 2009), p. 85. One strategy is to mis-classify the more stringently protected agricultural land as non-agricultural land.

[4] Xiaolin Guo, ‘Land Expropriation and Rural Conflicts in China’ (2001) 166 China Quarterly 422, pp. 435-37.

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