ASIAN AFFAIRS ON CHINA

Dr. Hu Wei - Professor at Jiaotong University - Shanghai

REFORMS AND BUREAUCRACY

Marketization as a great trend and orientation of China’s development in Post-Mao China, is currently both the context of China’s public administration and the basic dynamics of its administrative reforms. In accordance with marketization, a strategy of China’s administrative reform and development is to change from “big government and small society” to “small government and big society”, which has been established gradually as a goal of China’s administrative reform. Accordingly, China’s administrative reform has experienced a decentralization in the government, streamlining of the administrative structure, and transformation of the administrative function. Furthermore, marketization also requires public administration to change from a rule of men to a rule of law. One of the basic goals of China’s current administrative reform, therefore, is to build the government and administration under the rule of law. From a general perspective, however, China’s administrative reform is quite backward compared with the progress of marketization, and there is still a long way to go to establish the “small government and big society” and “rule of law”. Besides, China’s political system reform cannot support the administrative reform because there is only limited progress in democratization despite the substantial progress of marketization. China’s administrative reform has still to face the great pressure and severe challenge of marketization.

Toward “Small Government and Big Society”

Currently marketization constitutes both the context of current China’s public administration and the basic dynamics for administrative reforms, which coincides with the contemporary tendency of public administration all over the world.

China’s administrative system since 1949 was designed for command economy as well as high centralization of the government, and all of its structure, function and mechanism was suitable for a planned economy system. The basic characteristic of such a system is that government power is extended in such a way to every corner of the economy and society that there leaves only very limited or even no room for social and market activities.

In the 1950s and 60s, this administrative system began to show a tendency of getting rigid and over-staffed, and also lacked flexibility and vitality. Therefore, there were continuous attempts to carry out administrative reforms even in Mao’s time. Under the circumstances then, where the underlying command economy still remained unchanged, the major contents of the reform were limited to the readjustment of the power relationship between central and local governments and streamlining of the administrative structures (Pu Xingzu. 1999:150-152).

In post-Mao era, reform and open-to-the-outside-world policy has released the strengths of the market and society, and thus the autonomy of the economy and the society has increased accordingly, but still the powers of the governments outweighed by far that of the market and the society. The reason that the several administrative reforms carried out before 1990s with the focus on the streamlining of the government organizations did not achieve the continuous effect is due to the fact that the socioeconomic basis of the command economy still remained unchanged and therefore China lacked the necessary economic and social basis for the substantial breakthrough of administrative reforms. Nevertheless, compared with Mao’s time, the autonomous sphere of economy and society began to arise from scratch and has developed to some extent since 1978, which has formed the very structure of “big government” co-existing with a “small society”.

With the development of market orientation reforms in the 1990s, China’s whole socioeconomic structure has experienced substantial changes, and thus administrative reform faces new challenges and pressures. The statistics show that in 1998 the number of employees in the non-state-owned sector was near 100 million, outnumbering the employees in state-owned sector for the first time in history. The marketization outside the planned system has also achieved great progress. The products whose prices are determined by the market, account for 92.8% in total turnover of social consuming retail sales, for 85.3% in sales of means of production, and for 83.4% in sales of agricultural and sideline products (Yin Jizuo, 2000:2). Currently, the popularization of the market economy conception, the spreading of market economy practice, the adoption of a market economy system, and the development of societal autonomous sphere, have contributed to constitute the context and basic dynamics of China public administration reform.

China’s market orientation reforms in the last 20 years, as another important event for China in the 20th century after the great social revolution led by Mao, has such a great impact on social structure, social life and thinking pattern that it caught wide attention (Ezra Vogel. 1989; Harry Harding. 1987). In some sense, market economy is serving as the logical ground, driving forces and the goal to achieve for China’s administrative reforms. Market economy has become the basis of choices for China’s public policy making, and it forms the basic relation model between the government and market, between the government and society, and it also further determines the direction for administrative reforms. With the background and orientation of marketization, the basic strategy of China’s administrative reforms is to shift from “big government and small society” to “small government and big society”, which has been established gradually as a goal of China’s administrative reform from the 1980s to the 1990s.

For administrative reform in post-Mao era, the reform was carried out in the whole 1980s with the focus on decentralization in the government, that is, the powers of the central government were transferred to local levels for the purpose of vitalizing the local economy. The emphasis of the reform was to redefine the power relationship between central and local governments, including the power related to finance, subsidies and foreign trade. Especially since 1985, the new budget system has been adopted and each local area has been determined as a separate independent fiscal unit to replace the former system where there had been only one national uniform fiscal unit. As a consequence, the percentage of central government’s expenditure in the total expenditure of the government fell constantly in the whole 1980s, from 54% in 1981, to 45.3% in 1985 and further down to 36.4% in 1989. On the other hand, the percentage of the expenditure for local governments grew by leaps and bounds, from 46% in 1981 up to 63.6% in 1989 (China Statistics Year Book, 1989 and 1992) .

It can be observed that though the reform in the 1980s with the focus on decentralization had certain positive effects, such as incentives to the local actors and vitalization of economy, the reform also resulted in the shortage of resources for the central government and shortage of the macro-control capacity. More importantly, the reform of decentralization was undertaken after the obsolete command economy model. Instead of redefining the relationship between government and market as well as government and society oriented by the market economy, the reform of the 1980s redistributed the powers within the government, only to have local government take the place of central government to dominate the economy and society. As a result, the basic model of “big government and small society” was unchanged and the government remained big in size. The only change was removal of the powers and resources from central government to the local levels and this resulted in the dilemma of “out of control at macro level” and “over-control at micro level” (Hu Wei, 1995).

In consideration of the past experience and with the development of the market economy theory and practice, a new concept of reform began to emerge in the 1990s, which is, rather than the traditional command-economy-based reform with the focus on decentralization, the reform oriented by the market economy to separate the government from the enterprises. Such a reform conception, as a key to China’s administrative reform at the present stage, means the rational division of powers between the government and the society.

China’s administrative system has long suffered from the malpractice of non-separation of function between government and enterprises. On the one hand, this malpractice led to the government having too much burden, too big size and low efficiency. On the other, it led to enterprises without vitality and the economic system without flexibility. It was under the command economy that such a problem had developed and when, under the market economy, the market took the place of the government as the main device to allocate the social resources, the administrative function and structure of China’s government needed to change accordingly.

In essence, the separation of the government from the enterprises means the separation of governmental sphere from the social sphere and the governmental powers shall withdraw from the social and economic areas which it should not have occupied and let the enterprises and non-government organizations (NGOs) perform their functions in order to attain the goal of “small government and big society” for administrative reform.

From an empirical perspective, in recent years various organizations have grown by leaps and bounds in China along with marketization. The statistics show that there are 1,800 formally registered organizations at national level and 200,000 organizations at local levels. In Shanghai there are 3,000 formally registered organizations, 13,000 private enterprises and institutes and 83,000 new economic organizations.

Obviously, a pluralistic society can been seen growing up in China. Some researchers, such as Elizabeth Perry and Ellen Fuller (1991), evaluate the role of social groups in China’s social transition. In academia, moreover, a discussion of civil society in post-Mao China has been unfolding in recent years. According to some scholars, the emergence of a civil society in China is due to the expansion of merchant entrepreneurs and the private sector resulting from market-oriented reform (David Wank, 1991). Although there are quite a lot divergence in opinion on this issue, it is true that rapid socioeconomic development has introduced changes in the relations between the state and society (Thomas B. Gold, 1990; Gorden White, Jude Howell and Shang Xiaoyuan, 1996; Martin King White, 1992). Currently the NGOs and the third sector have not only attracted attention from the Chinese scholars, but also began to catch attention of the Chinese decision makers. Without doubt, the goal of China’s administrative reform has become quite clear to move from “big government and small society” to “small government and big society”.

A new strategy: the streamlining of Government’s Structure by changing its function

In order to reach the goal of “small government and big society” in the context of marketization, the structure and functions of China’s administrative system must be reformed. Structural reform means the streamlining of administrative structure because a colossal government in size is incompatible with the goal of “small government”. China’s government system has long suffered from the weakness of over-sized structure, which also results in overlapping of the organizations, over-staffing and low efficiency, all of which are usual symptoms of “big government”.

Functional reform means the transformation of the governmental function and the government will delegate to the market and the society those functions which are not necessary to put under its control. The autonomy of the market and the society will be fully exercised through making the public governmental organizations, private economic organizations and non-government organizations perform each of their own functions independently, which is a necessary pre-condition to develop a “big society”.

Logically, streamlining of the governmental structures is closely linked with the transformation of governmental functions. On the one hand, streamlining of the governmental structure shall be oriented by changing government functions. Under the model of totalitarian government, streamlining of the governmental structure can hardly achieve the long-lasting effect as the big-sized organization and staff are necessary for the government’s responsibilities to intervene into the economy and the society in every detailed respect. The reason why the attempts in Mao’s time to reform the administrative structure did not succeed was just due to the severe limitations imposed by the command economy system and thus naturally refusal and evasion to change the government functions. On the other hand, the transformation of the governmental functions shall rely on a streamlined administrative structure. Without the decrease and readjustment of the administrative organizations, the huge team of officials would inevitably try to find room to exercise their powers, which would lead to serious bureaucratism, hence the functional change will lack the support from structural change in the government (Hu Wei and Wang Shixiong, 1999).

A notable example can be found in China’s State Council, which once had some dozens to one hundred of governmental departments under it. As the consequence of the command economy, the division of work was extremely meticulous and over-detailed. There were a great number of departments in charge of economic activities and those departments were usually colossal in size. Only by reducing, merging and streamlining of those departments and reset the governmental organizations rationally, can the governmental functional transformation be effected. Empirically, the reform of government establishment in post-Mao era has experienced a process from simple streamlining of structure to the dual efforts put to streamline the structure and change the functions at the same time, and the reform has achieved some progress in both theory and practice.

In 1982, according to the new Constitution and Organization Act, the administrative structures were streamlined from the top to the grassroots all over China, and the total number of the organizations inside the State Council was reduced by around 40. However, as the full scale economic reform was not yet started at that time and there was no driving force to facilitate the functional transformation of the government, the goal of this administrative reform was still only to “streamline the structure and reduce the staff”, so this reform ended in failure once more with the administrative structure over-growing again soon afterwards. By the end of 1987, the number of governmental departments had grown by 11 and up to 72 in total.

Learning from the lessons of the past failures of administrative reforms which are caught in the circle of “streamline — overgrowing — restreamline — reovergrowing”, the theory that the government reform must focus on the transformation of the function was put forward in the 13th national Congress of the CPC. In the light of this theory, the organization of the State Council was streamlined in 1988 and further reform experiments were undertaken in some local governments. But at the time when the command economy has not been changed substantially, dramatic transformation of the governmental function was surely impossible. Meanwhile the central government delegated too much power to the local governments which caused serious decentralism, which also frustrated the government reform. In 1992, Deng Xiaoping made his famous speech during his inspection of southern China, and the 14th national Congress of the CPC clearly established the goal of building “socialist market economy system”. The market economy system as the background of the administrative reforms inherently required to change the functions of the government, which paved the way for deepening the reform of administrative system. In 1993, the State Council put forward a new plan to reform the administrative structure, the purpose of which was to make the government suitable for market economy development, and therefore the focus of the reform was to transform the governmental function through separating the government from the enterprises and returning to the enterprises the powers which should have been exercised by them. The major government’s functions were supposed to be overall planning, policy making, information directing, service providing, coordinating, inspecting and supervising. Through this reform, the number of administrative organizations in the State Council was reduced from 86 to 59, among which were 40 ministries and commissions. Based on this reform, the State Council undertook another more radical administrative reform in 1998 with the focus on separating the government from the enterprises and changing the government functions, in which the number of ministries and commissions was further reduced from 40 to 29. Thereafter, a big scale reform of the administrative structures at all levels of the governments has ensued successively.

Even if there were frustration in such reforms, the basic trend cannot be altered and the achievements of the reforms would be consolidate eventually. As John P. Burns (1999) put it, if China’s attempts to streamline central and local government since 1952 have largely failed, the more important policy of changing the functions of the state to suit a market economy has met with some success. Indeed, by 1999 the functions of the government had witnessed significant change. For example, the state has taken on market regulatory functions that are entirely new, in organizations such as the China Securities Regulatory Commission, set up to regulate the country’s stock and futures markets. Major reforms of the banking system, and insurance and social security system are also under way.

Under market economy, in sum, the functions of the government need to be redefined which mainly include the following: First, the government shall provide effective public policy to support the steady and sustainable development of the society and its economy; second, the government shall regulate the market through macro-economic measures, such as financial, banking and monetary methods, to facilitate the further socioeconomic development; third, the government shall regulate the conduct of the actors in the market through legal measures, such as economic legislation and enforcement, to maintain the market order; fourth, the government shall improve its social redistribution and service function to provide the necessary social welfare and public good and to maintain social justice;fifth, the government shall better its own management style in order to administrate under a rule of law and with great effectiveness and efficiency. The government shall gradually change from direct management to indirect management, from directing the micro-economic activities to macro-control, and from regulating by administrative command to relying mainly on economic and legal measures, and furthermore, government should leave sufficient room for social medium organizations. The government will gradually withdraw from micro-control over society and economy and let various economic organizations and non-government organizations perform their own functions, which will help properly redefine the power relationship between the government and society.

Rule of Law: A Great Trend for China’s Administrative Reform

Marketization not only requires the government to reform its establishment according to the model of “small government and big society”, but also requires the public administration to change from “rule of man” to “rule of law”, which is both the internal requirement and prerequisite for transformation of the government’s function. Hence, the rule of law has become a basic goal for China’s current administrative reform.

During Mao’s time, China was regarded as a country without law or a country of “law without lawyers” (Victor Li, 1978). This is no longer the case. Since the reform in 1978, China’s legal system gained a developmental momentum. As John P. Burns (1999) said, China’s political system is still based on personal rule rather than on the rule of law. However, since 1979, legal reform has continued. From 1979 to 1997, China enacted 311 laws, and issued 700 sets of regulations and 4,000 sets of administrative rules covering a wide range of political, economic and social activities. Other statistics suggested that, from 1949 to 1978, 514 laws and regulations were made, but the number increased to 16,493 from 1979 to 1997 (The Center of Legal Information at Beijing University and Beijing Zhongtian Software Company, 1997); National People’s Congress adopted 129 laws from 1966 to 1978, but 251 laws from 1979 to 1998 (The Legal Bureau of the State Council of the People’s Republic of China, 1992; The Year Book of China’s Law, 1995).

What is more, the 15th Congress of the CPC in 1997 proposed for the first time since the reform that China would give its highest priority to the rule of law, and accordingly, the Chinese government also declares that a basic goal of current China’s administrative reform is to build the government and public administration under the rule of law (Zhu Rongji, 1999a). Since Deng Xiaoping came to power, China has striven to set up an effective system for public administration, and the “rule by law” has been repeatedly emphasized by Chinese leaders. However, the “rule of law” is barely mentioned.

Without doubt, it is difficult to say that the Chinese government has not realized the differences between the “rule of law” and the “rule by law” (Zheng Yongnian, 1998). Both western and Chinese scholars have distinguished the “rule of law” from the “rule by law”. According to Baum, the concept of the rule of law belongs to the West and connotes a pluralistic law reflecting a delicate balance of social forces, acting as a shield to protect various socioeconomic classes and strata against the arbitrary tutelage of government. On the other hand, the concept of the rule by law in China means “statist instrumentalism and invokes both the doctrines of traditional Chinese legalism” and the “bureaucratic ethos of Soviet socialist legality” which was transferred to China in the 1950’s (Richard Baum, 1986). Put it more simply, “rule by law” is only used to rule the ruled, but the “rule of law” is also used to check the ruler, which should be built on the basis of democracy (Hu Wei, 1994)

To Chinese government, the rule of law has been the ultimate goal of the country’s political and legal development, and the administrative reform as well (Jiang Zemin, 1997). The rule of law became imperative because of economic necessity. As the planned system faded, laws came to regulate China’s economic activities. Even though privatization did not occur generally, the impact of the economic reform on public management could not be underestimated.

A shrinking state sector means that the government can no longer use the same way as in a planned system to manage an economy with growing privatization. Laws have gradually replaced plans to manage economic relations among different actors and begun to adjust people’s economic behavior (James V. Feinerman, 1994; Pitman B. Potter, 1995). Economic cases that the China’s courts received grew from 226,600 in 1985 to 1,053,701 in 1994, increased by nearly 3.7 times. It is understandable that most of the laws made since 1978 are those on economic and commercial activities, and foreign investment. Among these laws, rules on the regulation of securities and futures markets, consumer protection, intellectual property, banking and insurance are almost entirely new. Institutions to enforce the regulations have also been established. Although the number of lawyers practising in China has increased substantially (there were 8,265 law firms and 100,200 practising lawyers in 1997), they still fall short of the 150,000 the state estimates are required.

As far as we can see, most laws made in post-Mao China are about economic activities. In other words, laws have been used by the government to promote economic development. This implies that the executive organ has to play a more important role in lawmaking than any other state organs. For example, the State Council made 1,678 laws from 1979 to 1994 while only 251 were made by the National People’s Congress during the same period. This has laid a foundation of administrating under the rule of law.

Embedded in the government’s efforts to promote legal development is the idea that laws must be used to improve the government’s capacity of public management along with growing complexity of modernization. In other words, a new governance needs to be based on the rule of law. How the Chinese government controlled the country’s economic activities through a planned system is already well known. Less known is the fact that the planned economy of the old days was also a system of public administration and social control. Under the planned system, a work place was regarded as a “unit” (danwei). The government exercised a tight control over its citizens through the “unit” system. The household registration system (hukou zhidu) further reinforced the state’s control. With the introduction of a market system, the planned system became ineffective, while laws became important in governing people’s social activities (Zheng Yongnian, 1998).

Furthermore, a rule of law is indispensable to keeping public officials within bounds, which is of great importance for China’s administrative reform in post-Mao era because corruption and bureaucratism have been getting more and more popular in the government in the last two decades. An anti-corruption campaign would be hardly effective and it would be very difficult to reduce official arbitrariness without a sound legal system and rule of law in today’s China. During Mao’s time, the government initiated waves of popular movements against officials’ arbitrariness and corruption. But this strategy was no longer workable because popular mobilization would often be out of control, and stability was the highest priority for the new leadership. Consequently, laws came to regulate officials’ behavior. In 1989, China unprecedentedly passed the Administrative Litigation Law, which provided the people with an institutional means to sue officials’ arbitrariness and bureaucratism. Since then, administrative cases increased dramatically, from 9,939 in 1989 to 35,083 in 1994. And other new laws concerning public administration, such as the State Compensation Law enacted in 1995, also gave citizens the right to sue the government, and these are being used with increasing regularity. Even though such laws are far from perfect, they are institutional channels to reduce people’s complaints and thus increase the government’s legitimacy.

Scholars have disagreed with each other over whether China will become a country with the rule of law, and whether the government can administrate under the rule of law. Pessimistic scholars have contended that it is not possible for China to develop a system of the rule of law because of the irreconcilable clash between China’s political system and the rule of law (Franz Michael, 1998). For those who advocate a fundamental change of China’s legal system, the constitutionalist era will not fully arrive until the system of one-party dictatorship ends (R. Randle Edwards et al., 1995).

On the other hand, optimists believe that China is developing towards a country with the rule of law even though there are still enormous difficulties for China to overcome (Ronald C. Keith, 1994; Henry S. Rowen, 1996). It is no wonder that controversies arose because of different analytical concepts used to interpret China’s legal development. Since the late 1970s, Chinese scholars began to use western legal concepts in their debates on what kind of legal system China should develop and how it could be developed. Similarly, Western scholars also use their own concepts to interpret China’s legal development occurring in the context of China’s transitional socioeconomic and political order. To a great degree, however, western legal concepts cannot be the starting points to understanding the legal development in post-Mao China. The rule of law as a goal of China’s administrative and political reform is not based on Chinese leaders and scholars’ ideals or perceptions, but because of the necessity of socioeconomic development.

Without doubt, compared to Mao’s time, China is increasingly becoming a country to be ruled by law, and it has a prospect of administrating under a rule of law. The government requires such legal and administrative development because, firstly, laws can promote economic development by providing a new institutional framework; secondly, laws can be used to manage social problems resulting from rapid economic growth and govern citizens behavior, and third, laws can help reduce officials’ arbitrariness and thus strengthen the government’s legitimacy. To be sure, as Edward Epstein argued, law in China was “conceived and operates as an instrument with which to uphold the Socialist political order and perpetuate party domination”, and “used to carry out and consolidate institutional, primarily economic, changes according to predetermined policy” (Edward J. Epstein, 1994). On the other hand, however, law is a two-edged sword. It can be used by the government to rule the people, but it can also be used by the people to restrain the government. One example is the Administrative Litigation Law, which aims to reduce officials’ arbitrariness and thus to increase or consolidate the government’s legitimacy, but it also helps ordinary citizens to defend themselves from the intrusion of public officials. Besides, the government in running campaigns to popularize laws in order to educate people to behave according to law, also raised people’s rights-consciousness. Once more people know what their natural rights are, they will be able to challenge the government power.

The Problems and the Challenges

China’s administrative reform has already achieved substantial progress in the last two decades, but in general, it is lagging behind the marketization process and there is still a long way to realize the “small government and big society” and “rule of law”. With the further development of market economy and modernization, there will arise more and more difficulties and problems facing China’s public management and administrative reform. If these difficulties and problems were not to be overcome and resolved, China’s public administration would get into trouble. Therefore, the administrative reform has still to face the great pressure and severe challenge of marketization.

Currently there exist in China’s administrative process the following major problems, which are interacted with each other and pose the serious challenges for the present and future administrative development.

First, although in recent years a firm determination has been made by Chinese Government to reform the administrative structure and some strong measures have also been taken, the function of the government still remains considerably unchanged, and the lack of separating the government from the enterprises has still been a serious problem.

As China moves towards a market economy, its civil service must assume the position of a neutral regulator. This is a new role for the government officials, entirely unheard of since 1949. Reformers have taken steps to implement civil service neutrality by forbidding them to engage in business (although their relatives are not so controlled) and, more recently, by requiring civil servants at and above deputy county (section) level to declare their assets and business dealings. Authorities have also sought to boost neutrality by rotating leading civil servants once every five years (John P. Burns, 1999). But these measures have not thoroughly solved the problems. There are still a large number of administrative organs and local governments exercising improper interference in enterprises management, and the conduct of public officials and the government are still the basic variables which determine the rise and fall of the enterprises.

China as the world’s largest potential market has been frustrated by non-tariff barriers, local protectionism, a web of patronage between government and local industry, and the arbitrary dictates of uncooperative officials. On the other hand, however, government has not played its proper role in the areas such as social welfare, basic education and environment protection in which it should have performed better functions. As Milton Friedman once said, China had “both too much government and too little”—too much in production and investment control and too little in the rule of law, macro-economic management, and provision of public goods and services (The World Bank, 1997:102).

Second, as a result of lack of separation between government and the enterprises, local protectionism by the local governments and officials has run rampant and the policies and laws of the central government can hardly be observed. Undoubtedly, China’s vast size has long made it difficult to handle central-local relationship.

The general tendency for administrative reform since 1978 has been the gradual transfer of powers from central government to local levels in order to change from the traditional centralized model to the one of reasonable division of powers between central and local governments. Due to the lack of institutional guarantees for such a division of powers, however, the decentralization only resulted in enlargement of powers at local levels, but the corresponding duties which the central government require the local officials to shoulder was not applied. Furthermore, the powers transferred from the government to the enterprises were also taken by the local authorities to a large extent, thus further strengthening the powers of the local governments. With the local interests looming large, the geographically divided economy became so apparent as an economic pattern that the so-called “feudal separatist economy” or “honey-comb like structure” was formed, which produces serious local protectionism.

The local governments have become semi-closed and exclusive economic entities. In many parts of the country, road blocks are erected by authorities to prevent the sale of products that are not manufactured locally. Although the split-tax system between the central and local governments has been adopted since 1994 as a way to ensure the financial income of the central government and therefore strengthen its macro-control ability, and also to regulate the conduct of the local governments, such a taxation system only partly solves the problem by defining the fiscal proportion of the central and local governments but leaves the problem unsolved as to the distribution of powers for public affairs, and no wonder the problem of local government’s semi-closeness has remained unsettled. The critical point of this problem lies in the relationship between government and the enterprises.

The reason why the relations between central and local governments long remained unsolved is that there exists a profound interest link between the local governments and local economy. Without dismantling the interest link between the local government and the economy, it will be difficult to stop the local government’s involvement in the local interests. Therefore, the friction between the central and local governments is, in essence, the friction for interests, rather than a simple problem of division of powers. So it can be concluded that the lack of separation between the government and enterprises exacerbates the difficulty of the problem to define the relations between the central and local governments.

Third, an important aspect of local protectionism is judicial protectionism which constitutes a great impediment against administration under rule of law (Hu Wei, 1998:366-268). The essential part of rule of law and legal development is not only to make a complete set of laws, which is a relatively less difficult job, but establish supremacy of the “rule of law”, which is exactly what China lacks in its administration process. In China’s case, experience and discernible economic pressures suggest that the equal application of transparent laws enforced by an impartial legal and administrative system may remain a mere concept for many years to come.

As Chinese Premier Zhu Rongji (1999b) remarked: “Since reform and open to the outside world policy was implemented, Chinese Government has achieved substantial progress in legal building as well as administrating under rule of law, but there still exist many problems. The law making does not keep pace with the situation’s change; there are still the cases where the law is not adhered to, the cases where the law is not strictly enforced, and the cases where illegal conducts are not held accountable for; there are also some government officials who abuse their powers, or violate the laws in law’s application, or bend the law for their private interests, which have seriously injured the authority of law and spoilt the image of the Party and Government.” Comparatively speaking, the law-making speed has been fast in recent years, but the problem is the lack of a good and sound law enforcement system. The enforcement of law does not keep pace with law making and there even arose the paradox of “the better the law making, the worse the enforcement” (2)

In terms of the rule of law, therefore, China encounters enormous difficulties. The difficulties are not only from the fact that law is used by the Party-state as an instrument. They are also cultural, organizational and structural. Enormous obstacles, such as local protectionism, the state dominance over society, and economic priority, discourage the rule of law. For this reason, whether administrating under the rule of law will be realized depends not only on improvement of the legal and administrative system per se, but more importantly on further changes in China’s socioeconomic structure.

Fourth, as consequences of the above problems, there is wide-spread corruption in the administration process. The experiences of the world demonstrate that corruption has been the most common phenomenon in modernization and it might bring out serious damages. According to Samuel Huntington (1968:59-69), rapid social and economic change “calls into question existing values and behavior patterns”. It breeds corruption, which in turn breeds violence. Modernization creates new wealth and power whose relations to politics are undefined. Corruption frequently occurs in the process of using political power to procure wealth. Various studies show that in China there are links between economic reforms and an increasing rate of crime by officials, especially in the economic field (Alan Liu, 1983; James Myers, 1989; Hu Wei, 1996). Official corruption dramatically reduced the state’s capacity to maintain public order and effective governance.

In China, corruption started in economic areas, then penetrated into political and administrative areas, and it even goes from bribery and rent-seeking to the selling of official posts. While authorities have attempted to reform the appointment system, perennial abuses continue to emerge. For example, from 1996 to 1998 the press published numerous cases of officials selling government jobs. Corruption at unprecedented levels in the history of the People’s Republic has further undermined the legitimacy of the regime. Although thus far only one political member (Chen Xitong) has been convicted of corruption, corruption allegations have reached to the vice-minister or vice-governor level. Tens of thousands of cases of corruption are reported and investigated each year and the numbers are growing. Corruption especially at local level remains a serious problem that has undoubtedly undermined attempts to rejuvenate the bureaucracy (John P. Burns, 1999).

The reason why these problems have emerged in public administration in an endless stream is that China’s political development is lagging behind the economic development and the political system reform has not achieved breakthrough progress. China has already achieved substantial progress in marketization development, but there is still a long way to go in democratization. The solution of the problems, such as the corruption of the civil servants, administration against the rule of law, lack of separation of government from the enterprises and local protectionism, are not only the subjects of administrative reform but rely more on the support from the context of political system reform, political development and democratization.

To this point, the relations among economic reform, political reform and administration reform need to be better understood. In China, economic reform and marketization are the catalyst for administrative reform, and it is generally acknowledged in the scholarship that the reason why China’s economic reform proceeds with great difficulty is, to a great degree, that the political reform has not kept pace. At present, the vagueness of China’s market economy model, the transitional character of the economic development and the sluggishness of political reform all contribute to restrict the development of administrative reform. The deepening of administrative reform in the future will depend on the further maturation of the market economy, the increasing tension between the state and society, and the substantial development of democratization and rule of law, all of which do require political system reform.

Autumn 2000

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