Saturday, July 29, 2017
Corporate Social Entities [社会复合主体]: New Wine in Old Bottles
or Old Wine in New Bottles? (draft)
by
Jørgen Elklit, Jinshan Li & Tuo Ye
Co-operation between social, political, economical, and politico-administrative entities take many
forms and there is no lack of attempts to theorize about this phenomenon. Recent decades have
thus witnessed the launch of concepts as, i.a., iron-triangles, neo-corporativism, policy
communities, and issue networks as instruments to understand and empirically gauge different
patterns of purposive interaction between such actors.
There is no need – not even by way of introduction – to open this paper by repeating the insights
established elsewhere. One reason for this choice of ours is that we prefer to spend the space
available on presentation and proper identification of the Hangzhou corporate social entities [杭
州社会复合主体] as they might represent a new and interesting form of social organization in
present-day China. This is in any case the question we aim to focus on. We are, of course, well
aware that the formation of such entities does not only happen in Hangzhou, far from it! But we
have for a number of reasons decided to use Hangzhou as our case, and we therefore concentrate
of the corporate social entities, which have come into existence there.
What we find particularly interesting is that the formation of these entities can be seen as a way to
establish fora, where the interplay between public (governmental) and private actors in Chinese
municipalities (and maybe other politico-administrative levels) can take place. If this
understanding has the validity we expect it to have, it also becomes interesting to study how
corporate social entities are established, how they function, and what future role they have in
China, where the development of a strong and viable public-private partnership is considered by
many to be a key to understanding at least part of the future development.
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The corporate social entities in Hangzhou come in somewhat different forms, so it makes sense to
present some of them in order to give the discussion a firm and identifiable basis. A first
introduction was given in a paper by Cao Zengjie (2009), and other literatures in Chinese which
were very helpful in forming our initial understanding of the topic.
For reasons to be discussed later, the number of corporate social entities in Hangzhou cannot be
stated firmly, as an official registration of such entities has only recently been introduced. Of the
current more than ten examples of corporate social entities, we will present four, namely those
related to the silk industry, to the tea industry, to the Hangzhou part of the Beijing-Hangzhou
canal, and to the Hangzhou Life Style Network. We focus on these four corporate social entities,
because they share features, we see as important for the understanding of corporate social
entities, at least in Hangzhou. It is also important to note that the initiative in all four cases was
taken by the Hangzhou Municipal government.
The Committee for the Promotion of Strategic Cooperation in Silk (杭州丝绸战略合作促进委员
会）
Silk is the specialty industry of Hangzhou, and it also represents the cultural characteristics of the
city. In order to further promote the development of Hangzhou’s silk, women apparels, culture
and tourism, and also to better integrate political, industrial, intellectual and business resources,
Hangzhou Municipal Government, represented by Mr Shen Jian（沈坚）, Vice Mayor of
Hangzhou, i.a. in charge of industry, technology, transportation, established the Committee for
the Promotion of Strategic Cooperation in Silk aimed at “transforming Hangzhou into the home of
silk and the center of women apparels” and established three project working groups in silk
industry, silk culture, and silk tourism. The Committee brought together well-known businesses in
the silk women’s ware circle and research institutions—about ten agencies—including China Silk
Association, China Academy of Fine Arts, Zhejiang Polytechnic University, National Silk Information
Center, SILK magazine, Hangzhou Silk Association, Hangzhou Fashion Designer Association, and so
on, forming a strategic alliance. On the one hand, through the three project working groups, silk
products upgrading, know-how and technology sharing, integration of silk products and culture
are quite obvious. On the other hand, by organizing events such as China Silk Day, Hangzhou Silk
Women Apparels Journey, Hangzhou Women Apparels Brand Evaluation, Best Designer Contest,
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and the Best Designer Project, the integration of the silk culture and commercial activities for
women apparels and silk was promoted through the forms of culture activities, performances, and
exhibitions, aiding the marketing and promotion efforts for silk apparels and women apparels.
The Strategic Alliance of the Tea Industry（茶行业战略联盟）
Like silk, tea is a specialty product and culture of Hangzhou, especially the West Lake Dragon Well
tea, which has been crowned “Queen of All Teas”. It is one of the best brands of tea and has often
been used as tributes to the palace and state presents to other countries. The West Lake Dragon
Well tea is of considerable fame in the Chinese tea market, and many state-approved tea
institutes are based in Hangzhou. In order to well exploit the function of state-approved tea
institutes in developing the tea industry and tea culture, advocating tea preservation and tea
tourism, a long-term strategic cooperative relationship was established among the tea-related
agencies with a pushing from the municipal government, such as the China International Tea
Culture Research Committee, China Tea Institution, Tea Research Center of the China Academy of
Agriculture, Hangzhou Tea Research Institute of the China National Supply and Demand
Cooperative Association, National Tea Quality Control and Supervision Center, Tea Quality
Supervision and Testing Center of the Administration of Agriculture, China Tea Museum, and the
Department of Tea Studies of Zhejiang University. The strategic cooperation members signed the
Strategic Cooperation Framework Protocol, and agreed to establish an international tea culture
exhibition center, an international training center for tea techniques and culture, national tea
quality control training service center, national tea information center and national tea trading
center. Due to the formation and operation of the strategic alliance of the tea industry, Hangzhou
in 2005 was awarded the title “Chinese Tea City” by the China Tea Association, China International
Tea Culture Association, National Tea Quality Inspection Center, and seven other agencies.
Comprehensive Protection Committee for the Hangzhou Stretch of the Beijing-Hangzhou Grand
Canal（杭州市京杭运河（杭州段）综合保护委员会）
Hangzhou is the starting point of the 1,794 kilometer long Grand Canal which ends in Beijing. In
order to protect this longest and oldest canal in the world, and bring a renewed life to the ancient
canal, Hangzhou initiated a very comprehensive renovation and preservation project for the
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Hangzhou stretch of the Beijing-Hangzhou Grand Canal. This project integrates different factors
including research, planning, construction, management, operation and protection, and is also
related to all the cities along the way, therefore is a project of the ultimate importance to the
long-term development of Hangzhou’s ecology, cultural heritage, citizens and competitiveness.
Around this huge social project, a corporate social entity called the Comprehensive Protection
Committee for the Hangzhou stretch of the Beijing-Hangzhou Grand Canal is set up, along with the
Hangzhou Canal Group, is responsible for acting on behalf of the government in protection,
planning, and coordinating different actors’ actions. As a Wholly State-owned Enterprise, the
Hangzhou Canal Group is responsible for funding and constructing key infrastructures. But in the
execution of the comprehensive protection project for the canal, the corporate social entity
showed big openness by establishing a platform for expert participation. The project have been
injected with expert knowledge and wisdom in all its phases, from the forum in Hangzhou on the
protection of the Beijing-Hangzhou Grand Canal and application for world-heritage held by the
CPPCC, to individual project blueprints such as the Tangxi（塘溪） tourism project, to the French
lighting designer Roger Narboni who led the tourism illumination plans, to the National Master of
Arts and Crafts Zhu Bingren（朱炳仁） who led the proposal for applying to the UN for World
Heritage recognition.
The Hangzhou Lifestyle Network （杭州生活品质网）
Hangzhou lifestyle network is a corporate social entity that engages in the research, evaluation,
communication, exhibition, dissertation, and promotion of living standards. Members of the
network come from different fields, bud majorly from four: academic, media, government, and
business. The network serves as a platform for research, communication, publicity, and dedicated
discussions on lifestyle, and helps promoting the Hangzhou’s brand as a “lifestyle city”. Promotion
of the development of relevant industries was also part of the agenda. Institutions that participate
in the network all have full-time employees such as Hangzhou Lifestyle Research and Evaluation
Center, Hangzhou City Brand Promotion Committee, Hangzhou Development Research Institution,
and Hangzhou Entrepreneurship Research and Exchange center, while experts from Zhejiang
University, Zhejiang Industrial University, Qianjiang Evening News（钱江晚报）, and planning
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enterprises take on various positions in the various institutions such as secretary general, vice
secretary general, and vice director. In addition, some personnel in these institutions take on more
than one position. This kind of interwoven personnel structure is beneficial for the network as a
corporate social entity to integrate resources and operate efficiently in conducting research,
implementing projects and holding activities.
In order to allow a direct comparison of the various corporate social entities, we have organized
the various elements of information in the table below:
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Name
Structure of
corporate social
entity
Formal
start
Initiator
Previous activities
(i.e., before
formal start)
Participants
Cultural
branding
Business
development
Main areas of
concern
Committee
for the
Promotion
of Strategic
Cooperation
in Silk
Very complex
2009
Hangzhou
Municipal
Government
Yes
Government
Yes
Yes
Industrial
studies and
research (by
academics)
China Silk Association,
China Academy of Fine Arts,
Marketing
Zhejiang Polytechnic University, National
Silk Information Center, SILK magazine,
Hangzhou Silk Association, Hangzhou
Apparels Association, Hangzhou Women
Apparels Society of Commerce,
Hangzhou Fashion Designer Association,
Hangzhou Research Center of Silk
Culture and Silk Brand, Hangzhou Silk
Exhibition Center, Hangzhou Center for
the Promotion of Silk Production
Training of
designers,
technicians and
others
Dissimination/p
ropaganda on
culture of silk
Silk Business
Experts
Open for participation, but not all in the
industry of silk participates (but most
do)
The
Strategic
Alliance of
the Tea
Industry
Complex
2004
Hangzhou
Municipal
Government
Yes
Government
Experts
China International Tea Culture
Research Committee,
China Tea Institution,
Tea Research Center of the China
Academy of Agriculture, Hangzhou Tea
Yes
Yes
Industrial
studies and
research (by
academics)
dissertation on
culture of Tea
tea industry
development
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Research Institute of the China National
Supply and Demand Cooperative
Association, National Tea Quality
Control and Supervision Center,
Tea Quality Supervision and Testing
Center of the Administration of
Agriculture, China Tea Museum,
Department of Tea Studies of Zhejiang
University
Tea houses
Tea-relevant business
Open for participation
Comprehen
sive
Protection
Committee
for the
Hangzhou
Stretch of
the BeijingHangzhou
Grand
Canal
Normal
Hangzhou
Lifestyle
Network
Very complex
2006
Hangzhou
Municipal
Government
No
Government
Yes
Yes
Business
protection of
the heritage,
Experts
2008
Hangzhou
Municipal
Government
beautify
environment
No
(Not be specified)
endow the
Grand Canal a
new life
Not open for participation
dissertation for
culture of Canal
Government
Business
Experts
media
Open for participation
Yes
Yes
Dissertation and
promotion for
Hangzhou
lifestyle,
Policy
discussions and
proposals
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What is a CSE? A policy community (or network) – or something different?
Compared to the fast and impressive economic development over the last 30 years, the social
development in China is lagging behind. With no political competition and with no checks and
balances outside the system, issues related to managing increasing social demands are a major
challenge for Chinese government. This means that the transformation of government functions
and the development of social organizations become increasingly important. The need to develop
structures which can share some of government’s functions and also shoulder some of the
responsibilities has become an inevitable challenge. As Yu Keping has expressed it: “Relying on
social corporate entities to realize public governance is the direction and tendency of governance
in China” (Yu, 2008).
Hangzhou obviously tries to establish a constructive relationship between government and citizens
and the corporate social entities are one of the means used. In encouraging a wide participation of
the CSEs, the municipal government apparently expects to be able to handle at least two serious
challenges: (1) How does one handle the dilemma connected with simultaneous economic
development and environment protection, and (2) How does one handle the dilemma, which
floats from having one party government and at the same time having increasing demands for at
least some sort of democratic development.
The formation of corporate social entities is primarily seen in the larger municipal cities, i.e. not
only in Hangzhou. The question then becomes – as mentioned earlier – how we are to understand
this particular form of public-private partnership. We must also ask if the way CSEs have
developed in Hangzhou reflects the way they have developed elsewhere in China.
Since the 1978 market reform, political scientists have taken note of the changing of policy-making
process. Different from a pure organized Leninist state, China has been defined as a system of
‘fragmented authoritarianism’ (Lieberthal and Oksenberg, 1992), where government
departments fight turf battles and sub-central government compete with one another for
achievement, especially economic advantage. Therefore the central government loses the direct
tight control over society, over the economy, and over local government. As a price for some
autonomy, local government faces the performance evaluation which central government initiates.
In fact, the relationship between central government and local government just is similar to the
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relationship of the principal and the agent, but more complexly, which usually termed as‘market
conforming federalism’(Montinola, Yingyi and Weingast, 1996). In the frame, we can find the
incentive driving local government to develop the private economy, but we really do not know
how local government is actually cooperating with the private sector in order to be economically
advantageous. Obviously, the CSEs can show us a picture of at least one kind of partnership
between local government and the private sector.
The main research on Chinese government behavior cannot explain the CSE phenomenon, nor
does the existing forms of public-private partnership, such as corporatism. Although the CSE is the
result of government intervention in the market, the CSE do not show important characteristics of
corporatism. Firstly, to the market and society, they are based on functional distinction and roles
among society and economy, but the groups are not well-organized and lack bargaining power. In
other words, independence of internal decision-making of the key actors does not exist, and the
powerful local government always dominates the CSE.
Secondly, CSE means a consensus shared by government and other legal or individual members,
but it is also just a temporary agreement. There are many reasons for the sudden dismantling or
replacement of the CSE, such as changing of government leader, alteration of the government
agenda, and failure at achieving its goals Etc, though all these CSE have registered as legal persons.
Thirdly, unlike actors interacting for policy-formation in corporatism, the cooperation between
government and private occurs after the policy relevant decision-making. Normally, Hangzhou
Municipal Government takes the initiative to build a partnership in order to implement a policy. In
order to have access to considerable resources coming from government, the private sector
always intend to participate in the CSE. So the CSE is not a kind of systematic management of
economy, but a way or a means by which local governments implement a policy when they need
help from the private sector.
The model below depicts our understanding of CSEs and how they work:
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Superior government
（fragmented）
Enterprises
CSE
Performance evaluation
（fragmented）
Hangzhou Municipal
government
Making policy
Policy
Packaging
Participant
for resources
NGOs
Project
Others
Implementing policy（with
resources）
For the purpose of getting a good performance evaluation, Hangzhou Municipal Government
should formulate a policy package to meet the needs of superior government, including central
and province government. While economical growth is always a very important objective for local
government, Hangzhou Municipal Party Committee Secretary（杭州市委书记）Guoping Wang
(王国平）in 2007 also proposed to establish "City of High Quality Life" in the four cases, three of
which focus on economical issue, while the fourth is related to "City of High Quality Life"（生活品
质）.
As a result of market-oriented reforms, public-private partnership has been becoming increasingly
important for implementing policy. As the normal form of implementing policy, a project initiated
by a rich local government will be with lots of resources. For example, very huge sums were
invested in the Protection of the Hangzhou Stretch of the Beijing-Hangzhou Grand Canal. The
enterprises, NGOs, and others intended to participate in the project also for various other
purposes, such as obtaining support in the official media, sharing industrial information,
participation – no matter how incompletely – in decision-making, or maintaining a friendly relation
with government etc. Nonetheless some enterprises or NGO may reject the invitation from
government or may react negatively, if the benefit is not attractive.
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It is most important for the local government to ensure that the project attracts the attention of
superior government. Packaging（包装）plays a key role in this process, which means that the
local government actively shows the specific advantages of the project. In Hangzhou, the
government claims that it has created a new form of public-private partnership, which was termed
CSE by Zhengyu Hu（胡征宇）, Deputy Secretary-General for Hangzhou Municipal Party
Committee. The Research Centre for Hangzhou Development（杭州市发展研究中心）is on
behalf of Zhengyu Hu（胡征宇）in charge of packaging.
Although the government absolutely makes and controls the CSEs, the CSE concept objectively
offers a space where the government and the private can understand each other and solve some
problems together. Moreover, government cooperates with the private sector instead of directly
intervening or controlling the private, while the private sector participates in the CSEs in order to
have access to resources, not because they are forced by government.
Concluding remarks: Prospects for Future Development of Coporate Social Entities
The CSEs are not hierarchical as traditional organizations, but much flatter and freer. They network
in their consultation, in their production, and in policy implementation (as described above). A
good example is the Hangzhou Lifestyle Network, which gets together bureaucrats, businessmen,
academics, and media, with free participation，but no remuneration for producing advices and
suggestions to local government. The Committee in Silk and the Alliance of Tea industry are
examples from the productive sector, which breached the limitation of the production chain and
got more shareholders in the committee and alliance, respectively, so we suggest that this kind of
CSE is rather a new politico-administrative organizational form than a production chain.
The development of CSEs overturns the traditional bureaucratic system and corporation hierarchy
and social organizations become much flatter and freer, leading to a quick organizational
cooperation, such as union, multiple cooperation, corporate social entities, and so on. Also,
technical creativity and exchange becomes more open, which means that the brightness of the
collective can play a more direct and important role for the social and economic development.
The establishment of CSEs in Hangzhou is certainly not by accident, and as it picks up the tendency
of new form of organization, we may expect more CSEs (maybe under other names) to appear to
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breach the limitations of the current hierarchical society in China. In the future, the CSEs need to
strengthen these characteristics:
1) equality: participants are mostly amateurs, but not only elites. Each provides its
own resources and also benefits others;
2) sociality: knowledge is produced in the network, based on voluntary participation,
as a socialized production;
3) grassroot: the network organizes people with common interests and from all
corners into a community.
References:
Cao, Zengjie (2009). Better Regulation for corporate Social Agents: New Corporate Social Entities in
Hangzhou, paper prepared for 1st Liangzhu Forum: Governance & Corporate Social
Responsibility, Zhejiang University and American Society for Public Administration,
November 2008
Gabriela Montinola, Qian Yingyi and Barry Weingast (1996).“Federalism, Chinese Style: The
Political Basis for Economic Success in China”. World Politics, 48(1): 50-81.
Lieberthal, K. and Michel Oksenberg (1992). “The Fragmented Authoritarianism Model and its
Limitations,” pp. 1-30 in K. Lieberthal and David M. Lampton (eds.), Bureaucracy
Politics and Decisionmaking in Post-Mao China, Berkeley: University of California
Press.
Schoder, D. & K. Fischbach, K. (2003). Peer-to-peer prospects. Communications of the ACM,
2003, pp. 27–29. http://portal.acm.org/ft_gateway.cfm?id=606294&type=pdf
Wang Guoping (2009). Hangzhou Shehui Fuhe Zhuti, Hangzhou Press, 2009.
Yu Keping (2008). “Important Innovation and Tendency of Governance in China”, presentation in
the National Forum on Life Quality, 13th December 2008
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