3. Policy Making

CHAPTER 3

Policy Making

The allocations among ministries are “complicated” [fuza], and there are “lots of discussions.” Allocations to ministries are based upon two considerations: (1) national policies and state priorities and (2) specific projects. “There are many contradictions,” and the SPC [State Planning Commission] is the one supposed to resolve them. . . . Every ministry and province demands that the SPC give it more investment and resources, and this is a key contradiction, and this is more of a problem than in the 1950s. The national budget revenue is about 100 billion yuan per year. Every province and municipality wants allocations that they consider small, [but] that when added up are a huge sum. The SPC is the one that is to rationalize this and avoid a deficit.

—Conversation with commissioner, State Planning Commission, Beijing, November 10, 1982

China intends to observe international rules [such as those of WTO] and practice for its own interests. Why is it in our interests? (1) Because it will help our own decision processes. Differences between ministries and provinces, [they] have different views; they have to be sorted out; it is imperative to have a set of rules, and this will help Chinese integrate into the world. If one spokesman for one ministry at a meeting [is able to say], “WTO rules require . . . ,” that ministry will prevail in the internal debate. (2) It will help China enforce its laws. Reform has created a certain chaos in internal projects, so just international rules/practice helps enforce laws. Local government “can’t afford to create international difficulties and bear the responsibility.”

—Senior Chinese trade negotiator, remarks in Washington, D.C., June 11, 1997

At each stage of the seemingly endless process of making policy in China, there are struggles—over resources, over power, over ego. The great achievement of the Deng era was that these struggles were waged with far less brutality than in Mao’s time and resulted in far larger gains for the vast majority of Chinese citizens. How Deng and his successors fashioned a more productive policy process is an important, complex story, as is understanding the shortcomings of today’s policy-making process in the PRC.

Effective nation-states possess a coherent and stable identity, accepted and effective institutions, and a balance between what society demands of the system and what its institutions provide; identity, institutions, and participation collectively constitute the body politic. Making policy is a tough, core function of the body politic. It involves defining problems, establishing priorities, specifying options, building coalitions capable of adopting policies, and making sure that the edicts from the top find reasonable reflection at society’s working levels. As Shanghai’s former mayor Wang Daohan put it to Brent Scowcroft in 1997, “When we look at specific problems, [we must distinguish between] the important and not important, the urgent and not urgent, the easy and the hard.”1

The PRC’s policy-making performance since 1977 is difficult to succinctly summarize, but in the second decade of the new millennium it occurs in the context of a system that has become progressively more fragmented, with less dominant leaders and greatly empowered subgroups. On the one hand, post-Mao policy has produced remarkable outcomes: high-speed growth for well over three decades, a massive rural-to-urban transition, and growth of a significant middle class, and the country has moved from the fringe of global interactions to a central place in world affairs. In the late 1970s and 1980s, a combination of creativity and pragmatism born of desperation and risk taking fueled vigorous experimentation and reform. The Communist Party’s own legitimacy crisis in the wake of June 4, 1989, followed by the collapse of the Eastern Bloc and then the implosion of the Soviet Union itself, provided impetus for further reform in the 1990s.

On the other hand, the successes of policies adopted at the dawn of the reform era have had enormous consequences (both negative and positive) that must be addressed in the far different circumstances of present-day China. Some of the largest beneficiaries of initial reform have become resistant to further change that might reduce their gains. Leaders must now define and adopt policies to rekindle reform in circumstances where localities, SOEs, interest groups, and individuals have great incentive and capacity to resist change. As one party boss of a major Chinese university put it in the spring of 2012, “‘The problem with state-owned enterprises [SOEs] is no longer efficiency, it is monopoly,’”2 meaning that at the onset of reform state enterprises were woefully inefficient and that now they are more efficient but are bent on preventing the emergence of new competitors.

At the most profound level, the successes of Deng’s economic growth model and approach to governance are beginning to reach their limits. The high-investment, export-heavy economic model of growth must now give way to a system driven by intensive, value-added innovation, which in turn requires liberating ever higher levels of intellectual creativity. The political apparatus must also give up its considerable control over the financial system. A growth model with no environmental values now must become more sustainable. The China from which not much was expected in foreign affairs leadership on the global stage must now meet the growing demands of an expectant international system. Making these fundamental changes will not be easy. One principal reason has to do with the character of China’s policy-making treadmill.

Policy making is far more complex and arduous than it was during Deng Xiaoping’s time (not to speak of Mao’s) for a number of reasons. First, individual leaders can no longer dominate, with respect to either domestic or foreign policy. Second, government bureaucracies have gained the capacity to articulate their own interests, and their internal organizational structure has become increasingly complex—with bureaus, for instance, sometimes working against their own parent ministries. Third, local governments have been delegated a broader range of authority and have more resources at their command. According to a joint World Bank– Development Research Center study of 2012, “China is among the most decentralized countries in the world when it comes to government expenditures, but government revenues are highly centralized.”³ This gives rise to a huge number of fudging strategies adopted by local leaders—strategies rich in corruption, deception, and off-the books accounting legerdemain. Fourth, many new actors have appeared in the policy process, including the mass media, policy entrepreneurs, businesspersons, social organizations, and even civil and military criminal networks. Fifth, the enduring problem of a vertically segmented (“stove-piped”) governmental system, with inadequate horizontal mechanisms of coordination, remains a grave challenge. Sixth, there are serious problems of transparency and accountability throughout the system, including corporate governance. All of these policy-making challenges occur in the context of myriad complex issues cascading down upon already overloaded leaders.

EVOLVING VIEWS OF THE POLICY PROCESS

In the 1950s and early 1960s, Chairman Mao’s near-totalitarian system and the West’s negligible access to it led Richard L. (“Dixie”) Walker, in his book China under Communism, to provide a memorable organization chart of the PRC system as he and most other Western analysts in the early days of Mao’s regime understood it (figure 3).4

This was a top-down structure with an all-seeing “eyeball” (literally) watching and controlling the actions of all functional systems and geographic levels: the eyeball was the CCP and its various instruments, and arrows indicating lines of authority ran principally in one direction—from the Politburo down. The citizen was linked to the system by party cadres, perpetual mass campaigns, and indoctrination. A year later, Carl J. Friedrich and Zbigniew K. Brzezinski, in their classic Totalitarian Dictatorship and Autocracy, gave the following account of “all autocratic regimes,” writing, “The distinguishing feature is that the ruler is not accountable to anyone else for what he does. He is the autos who himself wields power; that is to say, makes the decisions and reaps the results.”⁵

The essence of the vision of Chinese communism (and other communist systems such as the USSR) that Walker and Friedrich/Brzezinski presented was a structure dominated by one person, with policy being faithfully implemented in a system with a presumably high degree of compliance with directives that was assured by the use of heavy doses of propaganda and coercion. Within the party, ideology was presumed to be widely shared, particularly in the ruling group. This was a low-friction system in which the gears of policy making were well oiled, subordinates did what they were told, and there was a near monopoly of resources (money, coercion, and life opportunity) by the elite, if not the autos himself. Even in the 1950s this view obscured a far more complex reality, but it was a first approximation of how the communist authoritarian system operated.

Two developments in the 1960s and the 1970s in China, however, forced a more complex understanding of the system. The first development was the appearance of unmistakable conflict within the Communist Party, not to mention between elements of society and the party. In hindsight, this conflict was evident from the regime’s earliest days, but it became increasingly apparent with Chairman Mao’s forced retreat to the “second line of leadership” in 1959 in the aftermath of the Great Leap Forward. Mao’s involuntary withdrawal was followed by his blatant attempts to claw back power in the 1960s, which burst forth into the Cultural Revolution decade (1966–76), when the Chairman unleashed the Red Guards—the “revolutionary masses,” sometimes little more than street mobs—to attack the party he had built. The Red Guards themselves became conflicting factions (as did groups within the party itself) and fell to turning on one another—from street fighting to employment of heavy weapons pilfered from military arsenals. Then, to deal with the chaos this created, Mao frantically sought to restore order by summoning the PLA, which in turn forced him to exert himself to regain power from elements of the military now reluctant to give up their newfound authority. The Chairman then found himself locked in conflict with part of the military, a battle in which his victory was marked by the death of his chosen successor, Defense Minister Lin Biao, in September 1971 in a mysterious plane crash. Thereafter, from the early 1970s until Mao’s death in September 1976, as the Chairman’s health deteriorated there was a faintly visible, but fierce, battle between the party’s Left and Right over who would steer China in its fast-approaching post-Mao future. Deng Xiaoping’s final return to power in mid-1977 following Mao’s demise marked the definitive abandonment of the Chairman’s self-defined era of “War and Revolution” and the adoption of Deng’s era of “Peace and Development.”

FIGURE 3. Walker’s model of chains of command in communist China. From Richard L. Walker, China Under Communism: The First Five Years (New Haven: Yale University Press, 1955), p. 27. According to Walker, “This graph attempts to convey in rough form how the decisions and control emanating from the communist leaders in Peking make themselves felt by the individual Chinese. The arrows indicate supervision, pressure, and control.”

The Cultural Revolution and its aftermath shattered the facade of domestic unity in the PRC and Western analysts’ image of the simple top-down policy process that had accompanied it. Shattering one vision of a polity and its policy-making process, however, is quite different from developing a shared, empirically grounded alternative understanding. Outside observers could see that, in the words of Michel Oksenberg, China was a “convulsive society,” but what were the specific lines of organizational and social division animating politics? In what arenas were conflicts resolved? How important were networks of individuals (“factions”) compared to institutions, substantive policy rifts, and policy process in generating conflict? How did vertical functional hierarchies and horizontal territorial systems interact? And what would an increasingly marketized and globalized economy as well as population mean for the system’s future operation?

Growing access to China by foreign scholars, businesspeople, students, journalists, diplomats, and others was critical to reconceptualizing Chinese politics and the policy process. Speaking to Chinese citizens and officials became increasingly possible from the mid-1970s, and the number of interviews I was able to conduct doubled every decade from then into the second decade of the new millennium—an unobtrusive indicator of the rate at which China became more open (see Appendix). Further, the restoration of old and development of new statistical systems, think tanks, research organizations, and university-based research centers in the PRC occurred from the late 1970s on and provided a wealth of information and contacts. This knowledge was supplemented by data from increasingly transparent and capable Chinese ministries and multilateral institutions that the PRC was joining and that required detailed statistics from members (e.g., the World Bank) as the price of admission. Further, there was the progressive development of increasingly profit-driven (but still constrained) mass media in China that, over time, found it to be in their economic interest to report on what people were actually interested in. Cumulatively, these developments have provided the means to evolve new understandings of China and its policy process.

In the second half of the 1980s and in the 1990s, one vision of the policy-making system emerged from the torrent of information that was becoming available—a concept that I termed a “bargaining system” in 1987 and that Kenneth Lieberthal, Michel Oksenberg, and I in various cooperative and separate writings thereafter developed as the “fragmented authoritarian” framework.6 In developing this vision we built on the work of many others, including A. Doak Barnett’s The Making of Foreign Policy in China.⁷ This vision of the Chinese policy-making system diverged from the presumption of tight central control born of the 1950s and early 1960s and also diverged from the factional conflict model developed to account for the intense conflict of the Cultural Revolution decade.⁸ The key propositions of the “fragmented authoritarian approach” are as follows:

1. The Chinese system is a complex grid. Running vertically from society’s top to various levels near the bottom are three vertical bureaucratic systems: the party, the state, and the military. These three functional vertical systems (the tiao or “legs”) intersect with the multitude of horizontal territorial administrations (the kuai or “lumps”) of the system—provinces, special districts, municipalities of various ranks, counties, and townships, with hundreds of thousands of villages below. The resulting grid thus has tens of thousands of nodes where the territorial and functional systems intersect. At every intersection are multiple officials who must cooperate if problems are to be averted. These nodes are ground zero for politics in China.

The CCP, one of the three vertical, systemic hierarchies, is the most important because it interpenetrates the other vertical and horizontal systems. The principal instrument of party control is the appointment of officials in the state and military hierarchies and the territorial administrations; the party also appoints principal leaders in state-dominated corporations.

2. Governance, policy-making, and implementation problems stem from so many nodes operating in a diverse, populous, and far-flung country. All officials must continually sort out to whom they will be most responsive—the vertical hierarchy or the territorial system at their level—or themselves. As the Chinese officials put it, “They have too many mothers-in-law” (po po duo).

3. Many officials in the territorial system hold ranks equivalent to those of officials in the vertical systems. These bureaucratic equals need one another’s cooperation but cannot command it. For example, ministers (in the vertical system) and governors (in the territorial system) are of equal rank, so they often find themselves at loggerheads, and ways must be found to reconcile their conflicts. Consequently, there is a rich array of leadership positions, dispute resolution groups, and arenas throughout the governing structure, some ad hoc and others permanent, that are tasked with resolving conflicts among territorial units, between territorial and functional units, and among leaders in the same hierarchy at different levels. I call these individuals and institutions “cross-system integrators.” They include the Politburo Standing Committee, the Politburo, the Premier’s Office, vice-premiers, state councilors, the State Planning Commission in an earlier era and today’s National Development and Reform Commission, leading small groups, ad hoc committees, and special-purpose standing bodies (such as flood control committees who decide in a hydrological crisis which communities will be inundated and which spared), to mention just a few. This repertoire of conflict-resolving mechanisms is duplicated one way or another at all system levels.

4. Most disputes are addressed in an environment in which financial resources are insufficient. Consequently, the budgetary incrementalism that Aaron Wildavsky described in his classic The Politics of the Budgetary Process prevails.9 In the absence of crisis, there is a tendency to change financial allocation shares only gradually and at the margins—the Chinese call this qie kuai, “to cut up the lump” (of money) according to fixed percentages.

5. Politicians and bureaucrats in China have just three means by which to make decisions and coordinate behavior. (1) They can build a command, hierarchical system in which the lines of authority are clear and effective. (2) They can develop markets or bargain with one another so that decisions are diffused throughout the system and are based on mutual accommodation. (3) They can create preference counting (voting) systems.10

While China has plenty of hierarchical systems, there are so many levels and structures within the system that lines of authority are easily blurred. Turning to the preference counting option, because of the noncompetitive ethos of the Communist Party, voting systems in China, while used at low levels and for polling purposes, have been avoided, though I expect they will gain currency as time passes.¹¹ Thus, if hierarchy isn’t working well and voting is unacceptable, in a setting in which law, independent judicial institutions, and sound administrative regulation are weak, the system falls back on bargaining and markets. So in China the name of the game is “Let’s make a deal!” This enables the system to make decisions but also fosters corruption, inconsistency, and very often gridlock.

6. When neither bargaining nor command is sufficient to produce an agreement at lower levels, disputes are kicked up the hierarchy to cross-system integrators. Given the tens of thousands of nodes in the system, superiors are usually overwhelmed with the sheer number of conflicts they are called upon to resolve.

In the more than twenty years since the fragmented authoritarian framework came into focus it has become evident to me that this approach helps illuminate not only the more open areas of the Chinese polity (economic and technical issues) but also the more closed and coercive recesses of the Chinese system—(such as the PLA, as we see in chapter 6). This analytic approach reveals a China that can now accurately be described as pluralistic, even though individuals and groups operate without the protection of clear constitutional and legal rights. In what he calls “fragmented authoritarianism 2.0,” Andrew Mertha describes new players in this increasingly plural policy process—the mass media, policy entrepreneurs, businesses, and social groups,¹² all empowered by increasingly diffuse financial and human resources, the Internet, and other tools of instantaneous communication. This ever more complex and fragmented system must now provide answers to the huge policy problems that have arisen as a consequence of the economic and social successes and the tremendous negative externalities of the preceding three-plus decades of reform.

CASE STUDIES

Rather than discuss these changes and their consequences in the abstract, I provide three case studies below to make them tangible. The first case study (on atomic energy legislation) highlights the gridlocked character of the policy process in which bureaucratic interests constantly are at loggerheads, while the second case (on economic policy making) focuses on what the rise of a private sector, powerful corporations, and global economic actors means for policy making. The third case (concerning the Hangzhou Maglev train) underscores the rising importance of popular sentiment in policy making and the growing role of a middle class.

Case 1: China’s Atomic Energy Law

China has endeavored to pass an atomic energy law (AEL) since the mid-1980s and, as of early 2013, still had not done so.13 An AEL would be important because the number of nuclear-radiological facilities has expanded, the value of nuclear and radiological products manufactured for both domestic and foreign markets is growing, and the civilian uses of these materials have multiplied. Since the new millennium, Beijing repeatedly has upped the number of civil nuclear power plants planned and under construction to provide electrical power, jobs, and income to struggling local governments and corporations and to meet carbon intensity reduction targets. This development of the civil nuclear power plant sector raises numerous issues: standards, construction oversight, regulation, disposal of waste, training, site security, emergency response, and adjudication and compensation when mishaps occur. Though the United States has had its problems in these domains, its Nuclear Regulatory Commission (NRC) and the laws in which it is embedded have been the reference norm for the PRC.

In the civilian economy, the medical and agricultural (irradiation) uses of radiological materials have been expanding, and university and corporate research laboratories are utilizing increasing volumes of radiological materials in ever more dispersed locations. One informant told my colleague Bo Kong and me that “‘there was [in the reform period] a lot of loss of radiological materials.’”¹⁴ And then there are all the issues that pertain to the nuclear and radiological materials and facilities in the military sector.

In terms of administrative, regulatory, and legal development, an AEL is important if the regulatory bodies and their respective domains are to be clearly defined. Stakeholders include the Ministry of Environmental Protection/National Nuclear Safety Administration, the Ministry of Information Technology/State Administration of Science, Technology and Industry for National Defense, the Ministry of Public Health, the Ministry of Education, and even the Ministry of Public Security,15 not to mention Chinese citizens. What are the processes by which conflicts among government agencies, localities, enterprises, and citizens are to be reconciled and policy implementation ensured?¹⁶

To make a long and fascinating story short, in China there has yet to be an AEL passed, despite almost three decades of trying. And it could be a long time until such a law is passed, although this means that the health, safety, national security, and economic costs of problems will grow—perhaps dramatically. What accounts for this political constipation, with five successive draft laws going nowhere from the 1980s well into the second decade of this millennium?

The simple answers are conflicting bureaucratic and economic interests and the complexity of the process by which Chinese policy and law are made. In terms of bureaucratic complexity (as of the end of 2012), safety issues are the principal responsibility of the National Nuclear Safety Administration (NNSA), which is subordinate to a weak Ministry of Environmental Protection (MEP). Among many problems is that a weak MEP does not want to be overshadowed by a potentially powerful subordinate NNSA, so it resists attempts to strengthen it, though in the wake of Japan’s 2011 Fukushima plant meltdowns the number of NNSA personnel was boosted. Moreover, the authority for developing and approving the civil energy plan rests with the powerful National Development and Reform Commission (NDRC), and its subordinate National Energy Agency (NEA)—these agencies are prodevelopment, often allying with progrowth power corporations and local officials hungry for revenue and jobs. As one informant put it, “‘The local governments support these [nuclear power] plants, but 100 percent of the people oppose them.’”¹⁷ This political landscape pits weak environmental interests against strong development forces. Further, China’s state-owned nuclear power companies, often allied with local officials who see nuclear power plants as cash cows and job generators, create a dynamic in which actual construction and preliminary planning often exceed even the ambitious plans of the NDRC.

Beyond this bureaucratic fragmentation and “turf” defending is the complex process by which something becomes law, an often overlooked consideration because of assumptions about the executive-led character of authoritarianism. A prospective law must be placed on the agenda of the State Council’s Legislative Affairs Office, which is difficult because of competing legislative priorities. To resolve interagency divisions, the State Council (the cabinet, which in 2012 had twenty-seven ministries and commissions, one special organization directly subordinate, and sixteen regular organizations) must be called in. Then, as is often the case, the State Council in turn tasks interagency leading small groups, a vice-premier, a state councilor, the premier, or sometimes the Politburo Standing Committee to address difficult-to-reconcile issues.18 Other setbacks can result from periodic administrative reorganizations (there have been seven State Council reorganizations since the 1980s: most recently, at the Twelfth National People’s Congress in 2013, the number of ministries and commissions was reduced to twenty-five and other bureaucratic changes were made). These reorganizations change key players through abolition, merger, or divorce, further scrambling the bureaucratic eggs.

Once there is an agreed-upon draft law, it must get on the agenda of the NPC, which meets for about two weeks per annum and has many competing items to consider. Moreover, random events can derail everything. The Fukushima nuclear power plant disaster(s) in Japan in March 2011, for instance, shook up the entire PRC political, technical, and bureaucratic landscape pertaining to civil nuclear energy, further stalling consideration of an AEL.

Consequently, because of the bureaucratic divisions, the complexity of the lawmaking process, and the injection of external events at random intervals, the personal attention of top leaders is often required to break logjams even on relatively minor matters. For example, in the case of deciding whether or not to buy Westinghouse-Toshiba or French (Areva) civil nuclear power plants, the decision was ultimately made by the Standing Committee of the Politburo, which had to rely on expert committee advice. A senior leader of the State Nuclear Power Technology Corporation described the process: “Zhang [Guobao, vice-minister of the NEA of the NDRC] asked for oral and written opinions [from experts], then Zhang sent the report to Wen [Jiabao, the premier], then this went to the Standing Committee of the Politburo, and they endorsed the findings of the expert process—this was their decision.”¹⁹

Case 2: Economic Policy Making

With respect to economic pluralization, outsiders often conceive of Chinese SOEs as responsive to central state interests as if those interests were clear and uniform. The truth is quite to the contrary—as an economic actor, the Chinese state is often an abstraction. Beijing usually exerts little control over (and often has even less information about) the activities and operations of “its” state enterprises overseas. One MOFTEC (Ministry of Foreign Trade and Economic Cooperation, later MOFCOM, or the Ministry of Commerce) official told me in 2002 that for “some Chinese companies, when operating abroad, [investment] flows from one country to another. When a Chinese company is outside of China, its capital flows are beyond our control. They don’t report.”20 In a conversation ten years later, the capacity of economic enterprises to resist foreign policy control was spelled out by a knowledgeable official. “You have to be careful in using the word China. China is lots of actors.” He went on to say: “‘In the past, in the Cultural Revolution,’ when you used [the word] China it was one voice. Now you have different interests. They pursue their interests. Our ambassadors try to coordinate investments [by Chinese entities abroad] but none [no ambassador] is successful. For example, a Sinopec guy told me that the Chinese ambassador told him to do gas exploration in Afghanistan, but he refused to sign the contract.”²¹

Corporate power finds its expression domestically as well as abroad vis-à-vis local officials who increasingly depend on foreign, private and/or substantially autonomous “state” enterprises for revenue and employment. As Nicholas Lardy put it: “If profits in tradable goods industries decline, these private firms will invest less; if profits decline further, they will shrink their businesses or even exit from export- and import-competing industries. Local first party secretaries, governors, and mayors may wring their hands over the loss of employment, tax revenues, and other benefits . . . , but by and large they will be powerless to offset the actions of these profit-oriented, private firms.”²²

To keep industries in their localities, local officials and banks (over which they still have considerable sway) cut a variety of deals (involving land, subsidies, and utilities, much like those in investment-hungry American localities) and will throw up internal trade barriers to protect “their” firms from competitors—foreign or domestic. As one Shanxi provincial official succinctly put it to me, “‘You have an interest in those who give you revenue.’”²³

A final layer of complexity comes from the growing private sector. In trying to explain why China’s central bureaucracy is unable to ensure faithful implementation of its own export control regulations, a former arms control expert in Beijing explained: “The policy of the government has become clearer and clearer—no proliferation, it hurts China’s image. China’s instructions to companies are that they should not sacrifice China’s interests for their profits. So there are export control regulations; the Ministry of Commerce [MOFCOM] sent people to educate companies, or you will be punished. But China is now not old China, can’t control, some small or private enterprises, they don’t know or they do things.”24

There are sharp lines of economic cleavage among bureaucracies, firms, local governments, and citizens, as well as between the public and private sectors. A good example of how these forces collide is exchange rate policy. In the late 1990s and throughout the first decade-plus of the new millennium, China’s exchange rate has been a persistent source of friction within China’s political system and with major foreign trade partners, especially the United States. In the late 1990s during the Asian financial crisis, the debate in the PRC was over whether to devalue its currency, the RMB, with exporters and export-dependent localities and industries (such as shipbuilding) urging devaluation. By way of contrast, in the post–World Trade Organization entry period, the issue has been whether to revalue the currency, one of many issues kicked up to the Leading Small Group on Finance and Economics and the Politburo Standing Committee.²⁵

China’s consumers, importers, and the central bank (the People’s Bank of China, or PBOC) have an interest in an appreciated RMB, while many business associations (notably in the textile industry), chambers of commerce, exporters (including foreign-invested, export-oriented enterprises in China), textile and cotton-dependent provinces (e.g., Jiangsu, Zhejiang, Guangdong, Hebei, Shandong, Fujian, and others), MOFCOM, firms in the electronics and machinery industries, and others have been committed to minimizing China’s currency appreciation.²⁶ This political gridlock partially accounts for Chinese leaders’ inability to move more rapidly to accommodate the appreciation demands of key trade partners.²⁷ External pressure by the U.S. Congress, the European Union, or even the International Monetary Fund has proven inadequate to overcome this domestic resistance alone. What is needed is a convergence between internal political alignment among key interests and external demands. Only as a result of rising inflation and the need to develop new vehicles of growth in China (given the temporarily sputtering export engine in the post-2008 global financial crisis period) did the PRC again move in the direction of outside pressure.

Case 3: The Shanghai-Hangzhou High-Speed Rail Line and Citizen Action

China’s economic, educational, and technological advancement has also fueled societal pluralism. Social groups, property owners who now have assets to protect, and a more informed citizenry aware of the health and environmental consequences of unrestrained growth are increasingly taking action.28

One example of this type of social action is the saga of a proposed Shanghai-Hangzhou magnetic levitation (Maglev) train, which was initially approved for construction by Beijing in February 2006. A Maglev is a very high-speed train that uses powerful magnets to lift, guide, and propel a train, thereby greatly reducing friction and raising the potential velocity. Its downsides are enormous electricity consumption and the high per-mile construction costs. Several years earlier, China’s first Maglev line had opened, running from Pudong International Airport to Longyang Station in central Shanghai on the east bank of the Huangpu River. The construction of this first line had been extremely expensive, its fare was high, and it blew by houses at 430 kilometers per hour, creating noise and concussions affecting nearby residents. Questions began to arise among residents near the planned Hangzhou line about the effects of long-term exposure to electromagnetic radiation. On January 8, 2008, a public hearing was held on the project. “The noise, vibration and radiation had become major concerns among local residents. They asked the experts to show the environmental assessment and security testing results.”²⁹ This hearing was held two days after a demonstration (benignly called a “collective talking walk”) had occurred involving thousands, leading to the closure of part of Shanghai’s busy Nanjing Road. Subsequently, after the level of public concern was clear, work on the newly approved line was “suspended.”³⁰

In March 2010, however, the Ministry of Railroads announced that the second Maglev train line was again, in the words of ShanghaiDaily .com, “back on track.”³¹ Prior complaints and worries produced some modifications in the initial plan: fifteen miles were added to the line (presumably to skirt sensitive areas), and the speed of the train was to be slowed near densely populated areas. These revisions would make the planned trip longer and the project still more expensive. Then, in October 2010, the slightly slower Shanghai-Hangzhou High-Speed Railroad commenced service, and the rationale for the Maglev project was diminished further—the project was again “suspended.”³² This case reveals how technology that allows people to organize (cell phones, Internet, text message devices, etc.), procedural rules requiring public hearings and the release of information, and a middle class determined to protect its newly acquired property and emerging environmental values can converge to create an empowered social force.

The above cases of the AEL, broad economic policy making, and the Maglev train are all manifestations of the changing character of the Chinese policy-making process and the shifting balance among leaders, society, and interest groups. We now turn to critical and dynamic contexts in which policy making occurs: the information environment and the proliferation of ever-more capable actors.

THE INFORMATION ENVIRONMENT

Making sensible policy requires relevant and accurate information. The policy system to which Deng Xiaoping returned in mid-1977 was an environment almost devoid of reliable and systematic information. Deng and his protégés such as Zhao Ziyang immediately began to rebuild and construct new statistical systems. Subsequently, during Jiang Zemin’s era China’s leadership increasingly realized the domestic and international implications of the media and information revolutions. In meetings with President Jiang it was not unusual for him to refer to how the information revolution was shaping the conduct of mass politics, policy making, and international relations. In speaking to Henry Kissinger in March 2001, Jiang said: “The world is very different from the one you knew thirty years ago. The information age. [It] would have been very difficult for you [Kissinger] to have come here secretly [nowadays, as you did in 1971].”33

Mass Media, Communication, and the Globalization of Information

This realm involves the transmission of powerful visual images, empowering information, and tools that make coordinated action among dispersed citizens possible. In 1978, there were approximately one million television sets in all of China, with very limited programming, in black and white; by 2011, televisions were in 350 million households. The Internet first hit China in the 1990s, and with great force in the new millennium, quickly becoming a new, almost infinite, universe of programming and information to hundreds of millions of mostly urban users. By 2012, China had 513.1 million Internet users,34 and people could access online and by other electronic means video revealing officials having sex with underage children and adolescents and engaging in all sorts of licentious and corrupt behavior, often at public expense.

This new availability of information has had direct and dramatic effects on politics and policy making. When, for example, U.S.-NATO forces bombed the Chinese embassy in Belgrade in May 1999, killing three Chinese and wounding twenty, President Jiang Zemin was put in a position where he had to credibly react to the visual images of a destroyed embassy and the repatriation of corpses in flag-draped caskets transmitted on the Internet and on cable and satellite television. The deluge of visual images and verbiage pouring in on China’s leaders and citizens compressed the time in which Beijing had to make decisions, with the powerful images serving to intensify the response the population was urging its leaders to make—leaders had less time in which to make more highly charged decisions.

With greater access to powerful media and visual images comes the possibility that the propaganda apparatus can strike out on its own (strategically or in error) by disseminating images or information early on in a crisis and thereby shaping the options available to leaders. As one senior PLA officer put it to me in discussing the aftermath of the inadvertent U.S.-NATO bombing of the Chinese embassy in Belgrade in May 1999, “‘The propaganda apparatus [in China] went off the tracks, when in doubt go left, so they did not represent the top leadership.’ The media could not get responsible people to talk, so only ignorant hacks talked. . . . ‘Ding Guangen [the Politburo member in charge of the Propaganda Department] is not a policy maker, but he sat in on policy making meetings after the bombing and saw leaders upset and thought this was their guidance.’”³⁵

Today we take a media-saturated environment for granted, but not long ago policy in China was made in a far different setting. A year before Deng’s 1977 final return and shortly before Mao Zedong’s death, northern China endured one of the worst natural disasters in history—the Tangshan earthquake of July 28, 1976. The epicenter was 150 miles from Beijing, in neighboring Hebei Province. No one knows how many perished, but accepted figures are in the range of 250,000 persons, while initial estimates ran to around 600,000.

In this setting of catastrophe, a group of visiting American congressional staff had the opportunity to witness firsthand just how poor communication within China was and how little even central leaders knew of what had just occurred in their own backyard. If these leaders knew so little concerning what was close by, how much less did they know about the distant reaches of the vast country they nominally ruled? This was a far different reality than that implied by Richard Walker’s all-seeing party “eyeball.” The American visitors met later the day of the earthquake with Mao Zedong’s (leftist) grandniece, Vice-Foreign Minister Wang Hairong.36 One would have thought that if anyone would be informed it would have been Wang. Yet she was seemingly unaware of the magnitude of what had happened. Beyond a few perfunctory words on the quake at the outset and at the conclusion of the meeting, the conversation went in different directions. Her seeming indifference, I believe, represented her ignorance of the scale of what had happened in a country in which not all counties were yet in reliable, much less instantaneous, communication with the center.

Thirty-two years after the Tangshan earthquake, media and communications development had transformed the situation, not only in terms of what was expected from leaders, but also in terms of empowering social mobilization. In May 2008, a massive earthquake with its epicenter in Wenchuan, Sichuan, struck, killing about seventy thousand persons. Within minutes, broadcast media, Internet communications of all sorts, and cell phones were sending images of the devastation worldwide. This motivated Premier Wen Jiabao to immediately (within ninety minutes of receiving word) fly to the area to bring comfort to quake victims, and provided the PLA an opportunity to be seen as a nurturing and compassionate force rescuing people from the rubble.³⁷ The heart-wrenching images also inspired volunteers from all over China to descend on the area to help and motivated an unprecedented outpouring of humanitarian support for the stricken area from citizens nationwide. The difference between 1976 and 2008 in both the governmental and the popular response could not have been greater, and much of the contrast is attributable to the information revolution. Information, particularly visual images, makes government indifference much less tolerable to the public and energizes citizens to participate.

Organizational Impediments to the Flow of Information

Thirty-five years ago, China’s policy process had an information problem that was apparent in the absence of basic regulatory information that Westerners would consider essential. There were almost no regulatory standards, nor were there any effective national data and sentinel systems that would have supported them. For instance, I went to China with a group of steroid chemists in October 1976, a month after Mao’s death, determined to understand how China performed the basic responsibility of regulating the quality and safety of pharmaceuticals; I was particularly interested in this because I had been told by interviewees in Hong Kong in 1972–73 that people in the PRC would pay doctors under the table for Western-manufactured medicines to avoid side effects (“tremors”) that often accompanied the use of indigenous pharmaceuticals. It is worth noting in passing that more than three decades later, problems were still rife in the food and drug administration system—the director of China’s Food and Drug Administration was executed in July 2007 for taking bribes to approve drugs, most of which were fake, and for which false test data had been submitted, presumably with his complicity.38

In my 1976 interviews in China, while I found that every province had its own pharmaceutical standards, there was no uniformity across provinces, and in each province there appeared to be few or no mechanisms to systematically gather data to ensure compliance with whatever local standards existed. According to my notes of that trip presented at a meeting,

Quality assurance was “assured” by the factory and the local drug control bureau—this means there was no evident nonlocal authority checking things on a random, surprise basis. We got no clear sense of what standards were enforced when inspections occurred. I found out that in terms of food and drug inspections, no products had EVER been removed from the shelves, to my informants’ knowledge. Other observations included: scientific research was very stove-piped, with one institute (even in the same city, much less a different locality) having very little idea what the other was doing. There was very little horizontal professional communication, much less collaboration.³⁹

Information flow, therefore, is not just about whether the hardware for communication is in place, it also is about whether standards for collecting and interpreting data even exist, whether the pathways exist to convey that information to higher levels in an accurate, useful, and timely form, and whether similar and functionally interdependent units communicate and coordinate with each other. One category of problem is bureaucratic stove-piping, where one organization that possesses information needed by another bureaucracy or level in the system does not provide it. Upper-level leaders remain ignorant, resources are used inefficiently, and the lessons learned by one unit have no benefits for anyone else—everyone is condemned to repeat idiocies. This was China in 1976.

The system has improved greatly over the intervening decades, though the ever greater complexity of the system still confounds attempts to reduce information problems in the policy process. One of the first things Zhao Ziyang did when he became premier in 1980 was to encourage the building of improved statistical and reporting systems (with the help of the World Bank and others) and encourage the establishment of think tanks that could analyze data and make policy-relevant proposals. China’s decision making gradually changed from an ideologically driven to a much more data-dependent process. The contrast between the ideological dogma one heard in 1976 and the fact-strewn argumentation of China’s leaders today is striking. Both Premier Zhu Rongji and Premier Wen Jiabao (and for that matter Li Peng too) would respond to the assertions of subordinates or foreigners with a barrage of facts.40

Nonetheless, there remain systematic biases in the information that subordinates provide superiors throughout the hierarchy. Subordinates often simply lie to superiors and to reporting systems. Moreover, with the development of the market economy and a private sector, the number of units needing to report and to be regulated has multiplied at the same time that these entrepreneurs have many reasons to seek to avoid reporting and regulation altogether—one of the origins of the many tainted-product scandals rocking China itself and the global supply chain since 2000. As one senior Chinese economist put it to a group of visiting U.S. congressmen in 2005: “How fast are we really growing? Statistical reporting is a problem. Local governments, political interference, so some things are overstated. Don’t believe that! However, not everyone wants to overreport. Some people want to underreport—the dynamic sectors. Local governments want to underreport in fast periods [of growth] to keep revenues. The private sector and even poor areas underreport to get subsidies.”⁴¹

The Contemporary Information Environment

Into the 1990s, the Chinese people had relatively little information concerning what was going on elsewhere in their own country, elsewhere in the world, and particularly inside Zhongnanhai—the central leadership compound in Beijing. This information-scarce environment had consequences: the capacity of Chinese people to organize to achieve goals was minimal, and the latitude of the elite to make decisions without considering popular reaction was comparatively great.

By the second decade of the new millennium, however, this latitude had decreased considerably; this fact became obvious in the spring of 2012 with the eruption of an elite struggle in connection with how the Eighteenth Party Congress in the fall of 2012 would compose its new Politburo Standing Committee. How this central leadership problem became known to the public and how it was handled demonstrate how different the “information problem” of 2013 is from that of 1976.

The incident involved the first party secretary of Chongqing Municipality, Bo Xilai. The son of a revolutionary elder, Bo had previously been mayor of Dalian (where by most accounts and my observation he did a spectacular job), moving through provincial-level leadership in Liaoning Province to become the minister of commerce and then being posted to the provincial-level city of Chongqing. In Chongqing, Bo was sufficiently removed from the central action that he was motivated to build a local base of political support that he hoped could catapult him to Beijing and the ruling Politburo Standing Committee. Since being posted to Chongqing as first party secretary in 2007, Bo had tried to mobilize popular support by conducting an anticorruption campaign (da hei, or “strike black”), building large quantities of public housing, advocating a larger role for state enterprises and clamping down on successful (allegedly corrupt) private entrepreneurs, and promoting a somewhat off-key effort to mobilize nostalgia for the Cultural Revolution’s more egalitarian values (chang hong, or “sing red”). A more commercialized mass media and instantaneous communications infrastructure had spread news of Bo’s efforts nationwide, thereby enlarging his mass support base—he was going populist. By 2011 he was not only a local but a national political force to be reckoned with by a central elite that largely was unwilling to embrace him. Then the complications of a dysfunctional family entered the picture.

Illicit business-related activities, resulting cover-ups, and other involvements led to the murder of a British businessman who had been involved with Bo Xilai, his wife (Gu Kailai), and their son (Bo Guagua)—alleged improper fund transfers abroad apparently were involved. This all unfolded publicly in a media fishbowl and a hothouse of Chinese blog activity. Subsequently, Bo’s wife was convicted of murder, with a logical inference being that Bo must have been involved in either the crime or the subsequent cover-up, not to mention other nefarious activities. Bo, as it worked out, had handed his opponents in Beijing the instrument of his own political destruction, resulting in his removal from the Politburo in April 2012 and conviction for corruption and abuse of power in 2013.

In one sense, Bo’s opponents in Beijing welcomed this scandal because his political ambitions could be completely discredited by his brutality, corruption, and hypocrisy, as well as the self-evident implication that if he couldn’t maintain family propriety, he couldn’t very well help rule China. On the other hand, the scandal revealed a network of shocking misdeeds that were systemic in nature, not simply personal foibles; worse yet, all the dirty laundry was getting aired in public view (both domestically and internationally). These kinds of abuses, though the daily lot of many Chinese, had heretofore rarely been on such graphic public display, and the revelations eroded party legitimacy further. Most worrisome to the elite was that for a considerable period during this scandal the regime lost control of the information reaching its citizens.

In the less information-saturated environment of even just a decade earlier, the regime would have used Bo’s misdeeds to ease him out behind the scenes (if they did not ignore them altogether), without running the risk of exposing such malfeasance publicly. However, this strategy was not possible, given a commercially oriented media smelling blood, and social media like Weibo (China’s “Twitter”), all of which hemorrhaged information probably before the central authorities even knew what was happening. The result was that the regime had to make policy as every lurid detail was emerging publicly, including the unsuccessful effort of Bo’s former police chief (Wang Lijun) to seek protection from his then estranged boss, Bo Xilai, at the American consulate in Chengdu—where he ran to spill information, another element of humiliation for Beijing and grist for tabloids the world over. The next day Wang had “safe passage” from the U.S. consulate (thereby presumably avoiding Bo’s thugs) into the arms of Beijing’s authorities, who soon thereafter charged him with treason, a charge later said to be mitigated by his subsequent cooperation with party authorities.

Professor Zhan Jiang at Beijing Foreign Studies University had no trouble telling the world through the Financial Times what he thought this situation meant for China’s political system and policy making: “Especially since Wang Lijun [Bo’s estranged police chief] fled to the US consulate, there has been a proliferation of political information and opinion spread through Weibo and this is unprecedented in China’s history. . . . Weibo represents a political information revolution . . . a huge shift in the relationship between Chinese politics and the media, particularly the Internet.”42

This inability of leaders to keep their personal and policy behavior behind “the curtain” is quickly changing policy making and mass politics. When Chinese politicians increasingly refer to “public opinion,” they are not just figuratively pulling the wool over domestic and foreign eyes. In January of 2010, a Xiamen business leader explained why and how the local populace in his city had just stopped the planned construction of a chemical plant: “Yes, the Xiamen Chemical Plant protests; most people were against the plant plan, and the facility went to Changzhou, next town from here. [The Xiamen protests were] organized by professors and used the Internet. First thing of this sort in China.”43

The Market Value of Information

One other aspect of the information and policy-making nexus is that information and cultural products (such as movies) have acquired market value that they did not possess before the reform period. An important new area of bureaucratic politics opened up when information and culture products acquired economic value: bureaucracies began to fight among one another and with foreign content providers (such as Bloomberg, Dow Jones, movie producers, and others) for control of the massive revenue streams.

As early as November 1982, for example, it was clear that the then Ministry of Radio and Television was fighting with the Ministry of Culture (not to mention foreign and domestic content providers) over the money to be made. About four years into the reform era, Minister of Radio and Television Wu Lengxi was very clear in explaining the emerging conflicts and the struggles among companies (foreign and domestic) and among domestic ministry-level organizations. The core of the conflict in 1982 was between the Ministry of Radio and Television led by Wu and the Ministry of Culture. One line of division concerned the desire of the television bureaucracy and its viewers to air (often foreign) films on television promptly after release and the desire of the Ministry of Culture (which ran movie theaters) to maximize its box office by not having popular programs or movies shown on television until the theater attendance potential had been exhausted.⁴⁴ Similar conflicts between foreigners and Chinese entities, and among Chinese business organizations themselves, over who controls the dissemination of global business news in a market economy are high-stakes games. The propaganda apparatus may be the nominal guardian of values, but film companies and foreign and domestic content providers, as well as state entities, want to make money by producing what people want to watch and read. The values of control and capitalism are often in conflict.

THE CONTEXT OF MORE NUMEROUS AND CAPABLE POLITICAL PLAYERS

When Deng Xiaoping adopted the “open and reform policy,” he rapidly committed China to enter the post–World War II Bretton Woods system and the wider global trade regime—as a member of the World Bank and International Monetary Fund (IMF) in 1980, an observer of the General Agreement on Tariffs and Trade (GATT) in 1982, and finally a member of the World Trade Organization (WTO) in December 2001. Chinese leaders had to construct new domestic agencies and create new bureaucratic capacities in order to first negotiate entry into these international agencies and regimes and then manage China’s relationship with them. This process instantly embedded new perspectives and interests within a heretofore parochial domestic policy-making system. A similar process occurred when the Ministry of Foreign Affairs created a bureau to deal with arms control issues, which Beijing was being pushed to address by the outside world, especially Washington. This process of building capacity to plug into the global system has had consequences. The number of actors has grown, the complexity of the process has increased, and the balance of interests within the policy process has shifted.

Deng’s move toward a market economy at home was also full of meaning for more narrowly defined domestic politics. In a market economy, money becomes a central inducement and no longer a government monopoly. A market economy has hierarchies with status and security that lie beyond officialdom. In newly marketized China, this new reality meant that government had to compete with a burgeoning number of quasi- and nonstate actors for, among other things, talented people and money. As one senior official put it to me, “‘The private sector hires good people away from the government. This is a problem in every ministry.’”45 This gradually alters the state-society balance. This competition for talent is particularly evident in high-tech areas, as one senior official in the government’s nuclear regulatory apparatus explained.

It should be that people who work in XXX [government agency] are highly trained, they should be of high quality, they should be of a high level. But now, work in the government and work in industry, the salaries are quite different. “A serious problem.” So before in Beijing we had special policies on housing, education, so there were more advantages [to working in the government], “but now all gone because of reform. Housing, there is a new policy—no subsidies. So people stop working in XXX [government agency] and work in industry. Those in industry don’t move to the government.” That is why XXX is in a very difficult position to get qualified people.46

Turning to the challenge of bureaucratic coordination directly, there are at least two ways to think about the problem: (1) coordination among agencies in the party-state (the challenge of stove-piping and the uncomfortable interface between functional vertical bureaucracies and horizontal territorial administrations), and (2) the challenge of coordinating government with new sectors of the economy (e.g., a private sector) that have increasing initiative and autonomy.

The first problem—the proliferation of government agencies and the need to reconcile domestic interagency, intersectoral, and interregional disputes—was clear in the protracted (1986–2001) negotiations over China’s entry into what was first called the GATT and eventually became the WTO. Every section of an overall agreement that China’s trade negotiators reached with the global trading regime required at least grudging acceptance and implementation by a large number of domestic players, all with their particular interests that could have delayed or foiled effective implementation if they so desired.

The first line of combat in the process of reconciling these interests was what now is called the Ministry of Commerce (MOFCOM), a bureaucracy that had a number of organizational antecedents. Even though MOFCOM and its predecessors were not the weakest players in Beijing’s bureaucratic firmament, almost every important feature of China’s WTO accession package had to be resolved in higher-level interagency meetings presided over, through much of this time, by State Councilor Mme. Wu Yi (later vice-premier and from 1998 in the Leading Party Group of the State Council). When her clout was insufficient, disputes would go to higher arenas, including the premier, the State Council, and sometimes the Politburo Standing Committee. One senior official in the then Ministry of Foreign Trade and Economic Cooperation [MOFTEC] explained how the process worked and what lines of economic, geographic, and bureaucratic division were salient. The internal negotiations involved winning agreement from a variety of alarmed economic sectors: agricultural interests saw threats from commodity producers in the United States, Canada, and Australia; domestic financial services firms feared global multinational financial Goliaths; and automakers feared Western and Japanese imports. To further complicate things, key leaders like Jiang Zemin and Li Lanqing had started their careers in the auto industry. “MOFTEC played a coordinating role among agencies, and if we could not reach agreement, we reported to the Leading Group headed by Wu Yi, and leading ministers. So if we got consensus we [MOFTEC] can negotiate; if not, the Leading Group decides. For example, in 1997, before Jiang Zemin’s visit to the United States, WTO had an ITA agreement and China asked to join. Seven ministries were involved. Through the Leading Group we decided to join it.”47

Turning to the second key problem of coordinating governmental and quasi-governmental entity behavior, and governmental and private sector behavior, Americans tend to think that there is a fairly bright line between private sector and government agency activity. Since 1977 in China, however, there has been a steady expansion in the number of organizations that fall into a gray area in which the control of government hierarchy cannot be taken for granted, and instruments used in the West to regulate private sector behavior—a legal structure, effective regulatory apparatus, or meaningful corporate governance—cannot be counted upon. This means that government officials are often uncertain about what many organizations are actually doing and are therefore unable to bring the activities of wayward entities under control in a timely fashion—even if they want to and corruption hasn’t entered the equation. The leaders of these gray-area and private sector entities often exploit the ambiguity of their position to gain personal or organizational benefits.

Two incidents in 2007 and 2011 involving the Ministry of Foreign Affairs and revelations of Chinese military capabilities clearly illustrate this problem of coordination and gray areas. In both cases the Foreign Affairs Ministry was caught unawares by the military’s sudden unveiling of new capabilities that concerned the outside world, not least Washington. The explanation I was given by Chinese government analysts was significant in its focus upon the relationship between changes in the economy (corporatization) and government oversight in the national security domain. Some notes of the meeting follow:

I asked why events like the satellite shoot-down of 2007 and the 2011 unveiling of the J-20 [stealth aircraft] during Secretary of Defense Gates’s visit occurred, and this led to a lot of discussion about what I termed “a lack of coordination” (xietiao bugou) and what they said was “absolutely no coordination” (wanquan meiyou xietiao). They said the 2007 satellite shoot-down was an interesting example of the move from industrial ministries, to corporations, to industries. Each step along this evolutionary chain removed the arms and sensitive technology makers further from the mandatory (xietiao) coordination mechanism. Ministries were locked into the mechanism to coordinate actions, corporations were less so, and industries were still less so. XXX went on to say that by the time you were an industry, “it depends how you frame the issues.” If the involved industry defines what it is doing as a security or foreign policy issue, it is then obligated to coordinate with that realm of the government; on the other hand, if it is just an industrial product being developed, requirements for coordination are fewer. The point is, as you have gone from a centralized ministry structure to a more corporate, economic framework, government capacity to coordinate in part depends on the self-reporting of industries under loose control.48

To put it starkly, industry has an interest in keeping its activities outside the realm of government coordination.

IMPLEMENTATION IS KEY TO THE POLICY PROCESS

Even if the party-state at whatever level formulates a policy and is committed to it, this is just the start of the process of effectively realizing it on the ground—whether across agencies at any given level, down the functional and territorial hierarchies, or among the PRC’s increasing number of global entities. Policy formulation is important, but policy implementation is also crucial and usually even more challenging.

Many considerations affect implementation in China, as elsewhere. The following are some central considerations:⁴⁹

The context. How many and what kinds of actors, with what resources, are entitled to have a voice in implementation, and how large were the initial disagreements over the policy? The more diverse and empowered the stakeholders and the deeper the initial divisions, the bigger the implementation problem.
The content of policy. Some policies are almost self-implementing, since they align with popular predisposition, while regulatory policies that try to change behavior are inherently more challenging.
The unanticipated consequences of the policy or unanticipated events in the broader environment.
The time frame over which policy must be implemented. Policies requiring substantial change that must continually be implemented (such as the one-child policy or anticorruption efforts) are more difficult to successfully implement than policies that are effectively one-time changes (such as changing a tariff level).

The number and complexity of linkages with other important policy domains, both at home and abroad. The more implementation of one policy affects, or is affected by, other important policies, the harder it will be to successfully implement a given initiative. For example, the abolition of communes in the early 1980s made it more challenging to implement the one-child policy in rural areas because there was no longer a rural organizational structure to oversee implementation at the grassroots level.

Corruption, both seen and unseen, throughout the system, starting at the foundational level with the quality of materials put into public works projects. With respect to revenues, one senior economist explained, “Tax evasion is a problem in all sectors.”50

Moving from the theoretical to the concrete, the three case studies provided earlier in this chapter (the AEL, broad economic and exchange rate policy, and the Shanghai-Hangzhou Maglev train issue) illustrate some of the policy formulation and implementation challenges faced by ever more constrained leaders in China’s increasingly complex, globalized, and pluralized system.

The AEL example involves many powerful, yet divergent, stakeholders: the National Development and Reform Commission (NDRC), electric power interests, construction interests, the vast number of civilian and military users of radiological materials, and local governments. It is very difficult to effectively implement already existing atomic energy regulations, let alone adopt a comprehensive AEL. The prodevelopment interests want as little formal constraint as possible, while the regulatory interests (the NNSA and the MEP) are already relatively weak bureaucratic players, further weakened by internal divisions. Also in the mix are Chinese citizens who are anxious about having nuclear power plants in their backyard but who are weaker political actors (unless they take to the streets), though they are increasingly empowered by social networking and communications technologies.

The case of the exchange rate appreciation policy that was adopted in 2005, then suspended (in effect) in 2008, and then restarted in 2011 demonstrates the difficulty of sustaining policy when there are a multitude of interests and when the policy is vulnerable to uncontrollable external and internal events—such as the global financial crisis and, subsequently, spiking domestic inflationary pressures. Only when the world economy seemed to be recovering and China was worried about inflation (2011) was RMB appreciation resumed.

Finally, the Shanghai-Hangzhou Maglev train case demonstrates that even after a policy is adopted (approval to build the transportation line was given in February 2006), local citizens trying to protect their property and quality of life can now organize to delay or stop approved projects. More often these days, local authorities must convene public hearings that make data available to citizens, and members of the public employ networking, mass media, and communication technologies to raise the specter of disorder if their interests are ignored. It is important, of course, to determine the conditions under which popular discontent is effective and the circumstances under which it is not. But if a policy is to be effectively implemented, citizens’ opinions must be taken into account.

In the past thirty-five years, China’s policy-making system has become increasingly complex and fragmented—dare one say “normal”? This normalcy can be seen along many dimensions. With the rotation of national leaders on a ten-year cycle, for example, leaders tend to be weaker at the beginning and toward the end of their terms, with the greatest capacity to act being in the middle of their tenures. In China, as elsewhere, important problems take a back seat to the urgent ones, and a genuine crisis is what can focus a policy maker’s attention. Finally, in China, if policies are going to be adopted and then effectively implemented, they require sustained attention from top leaders and a bureaucratic “champion.”

During the Mao era the principal explanation for policy outcomes had to do with the Chairman, his peculiarities and political strategies, and the tangle of factions in which politics played out—the public was acted upon rather than an active participant. Beginning with Deng Xiaoping’s ascension to power and becoming progressively more pronounced thereafter, the explanations for policy outcomes have to do with public opinion, bureaucratic structure, financial limitations, objective conditions, interest groups, and the constraints imposed by global integration. While the basic components are universal, just exactly how these building blocks fit together and interconnect reflects the peculiarities of the PRC. At the same time that we respect Chinese differences, the similarities are becoming more important. That China is becoming a more normal polity, however, does not mean that it will successfully address the enormous domestic and foreign policy challenges confronting it, nor does the country’s internal trajectory ensure that the external environment will remain hospitable. Above all, the considerations producing Chinese policies may be understandable, but that is not to say the outside world will always find them congenial.