The Journal
of
Contemporary
China Studies
Vol. 4 / No. 1 2015
SPECIAL ISSUE: Understanding Politics and Society in Modern China
CONTENTS
The Paradox of Class Labeling in the Mao Era: Bio-Power, Racism,
and the Question of Violence
Seio NAKAJIMA 3
The Construction of the Double Burden: Gendered Childcare System
in Post-Mao China
Fumie OHASHI
21
The Politics of Drug Price Control Policy in China: Regulation,
Deregulation and Re-regulation
Sabrina LUK
41
The "Institutional Space" of Civil Society in Contemporary China:
The Legal Framework of Civil Society Organizations
Mei HUANG
55
China and its Neighbors: Trade Leverage, Interdependence and
Conflict
Nabeel A MANCHERI
75
The Paradox of Class Labeling
in the Mao Era: Bio-Power, Racism,
and the Question of Violence
Seio NAKAJIMA
Abstract
How can we understand the paradox that the apparently “convivial” (Ivan Illich)
ideal of Maoism and the Chinese Revolution resulted in the extreme violence
and turmoil of the Cultural Revolution? In this article, I tackle this question by
discussing the practice and system of class labeling during the Mao Era (19491976), in particular, during the Cultural Revolution. I begin by examining the
theory and concepts presented by Michel Foucault and propose my understanding
of such key notions as “bio-power,” “population,” and “racism.” Then, by closely
examining the discourses of “class labeling” in “big character posters” (dazibao)
and other official and non-official publications during the period, I contend that
the violence was not a temporary surge of political and social madness, nor was it
a disruption in the normal progression of the history of modern Chinese society,
but a historically and institutionally specific case of the workings of the rationality
and power of modernity.
Keywords
bio-power, class labeling, racism, The Great Proletarian Cultural Revolution,
violence
With the possible exception of China under Mao, no present government
could restructure society along convivial lines.
—Ivan Illich, Tools for Conviviality, 19731
1
Ivan Illich, Tools for Conviviality (Berkeley: Heyday Books, 1973), 16.
The Journal of Contemporary China Studies, Vol. 4, No. 1
4
Villagers tied him on a telegraph pole and smacked and kicked him. Then
they lynched him like crazy by poking his face and back with a red-hot
burning iron. Older party members, older cadres, and older poor peasants
proposed to kill him. There were people who suggested to cut open his
stomach and scrape off his heart. Deng lost his consciousness, so the people
carried him to a riverbank. Five to six people held tight his hands and feet
with branches of a pine tree. Then, with a knife, Yi Wansheng cut open Deng
Jifang’s chest.
—A recollection of a peasant Yi Wansheng, who claims to have
committed cannibalism during the Cultural Revolution in 19682
Introduction
How can we understand the paradox that the apparently “convivial” 3 ideal of
Maoism and the Chinese Revolution resulted in the extreme violence and turmoil
of the Cultural Revolution? In this article, I tackle this question by discussing
the practice and system of class labeling during the Mao Era (1949-1976), in
particular, during the Cultural Revolution.4 I begin by examining the theory and
Zheng, Shokujin Enseki: Massatsu Sareta Chūgoku Gendaishi [Cannibal Banquet:
The Forgotten History of Contemporary China], (Tokyo: Kobunsha, 1993), 47-48.
3 Ivan Illich, op. cit.
2 Yi
4
The Great Proletarian Cultural Revolution (1966-1976, hereafter, the Cultural Revolution)
has been one of the central topics of discussion in contemporary China studies. Hence comprehensive review of the literature is beyond the scope of this article. Brief introduction,
however, is in order. Following a trajectory similar to broader studies of social movements
(cf., Doug McAdam, John D. McCarthy, and Mayer N. Zald, Comparative Perspectives on
Social Movements: Political Opportunities, Mobilizing Structures, and Cultural Framing
[Cambridge University Press, 1996]), the earliest studies (e.g., Robert Lifton, Revolutionary
Immorality: Mao Tse-tung and the Chinese Cultural Revolution [New York: W. W. Norton,
1968]) focused on social-psychological aspects of the irrationality of participants. Later studies
focused on rational, interest-based explanations—participants from privileged “revolutionary”
background supported the status quo, whereas those from “bad” class background attacked
it (e.g., Anita Chan, Stanley Rosen, and Jonathan Unger, “Students and Class Warfare: The
Roots of the Red Guard Conflict in Guangzhou,” China Quarterly, 3: 397-446; Hong Yung
Lee, The Politics of the Chinese Cultural Revolution: A Case Study [Berkeley: University of
California Press, 1978]; Shaoguang Wang, Failure of Charisma: The Cultural Revolution in
Wuhan [Oxford University Press, 1995]). The most recent studies, utilizing the increasing
availability of data on detailed local conditions and local histories of the Cultural Revolution,
have elucidated more context-dependent political complications, criticizing the overly-rational,
interest-based approach (e.g., Andrew G. Walder, Fractured Rebellion: The Beijing Red Guard
Movement [Cambridge: Harvard University Press, 2012]). Some recent important studies in
Chinese include, e.g., Yongyi Song, Wenhua Dageming: Lishi Zhenxiang he Jiti Jiyi [The
Cultural Revolution: The Truth of History and Collective Memory] (Hong Kong: Tianyuan
Shuwu, 2007), Weihua Bu,“ Zalan Jiushijie”: Wenhua Dageming Fadong yu Haojie, 19661968 [“Destroying the Old World”: The Beginning of the Cultural Revolution and the Turmoil,
1966-1968] (Hong Kong: The Chinese University Press, 2008), and Yun Shi and Danhui Li,
The Paradox of Class Labeling in the Mao Era
5
concepts presented by Michel Foucault and propose my understanding of such key
concepts as “bio-power,” “population,” and “racism.”
Then, by closely examining the discourses of “class labeling” in “big character
posters” (dazibao) and other official and non-official publications during the
period, I contend that the violence was not a temporary surge of political and
social madness, nor was it a disruption in the normal progression of the history of
modern Chinese society, but a “unique encounter between the old tensions which
modernity ignored, slighted or failed to resolve—and the powerful instruments of
rational and effective action that modern development itself brought into being.”5
I argue that the violence resulted from class labeling is a case of modern power,
or what Foucault calls “bio-power.”6 Close examination of primary materials
reveals that it was also a form of “state racism” discussed by Foucault in order to
account for the case of Nazism.7 The purpose of this article is not simply to see
whether Foucauldian concepts “apply,” but how they “travel”8 to help understand
the unique and rare combination of various factors in the Chinese case, which
were, in turn, ubiquitous and normal in the rationality of the modern state.
1. Class Labeling in China9
The term “class distinction” (jieji qufen; jieji chengfen) is a generic notion that
Nanyi Jixu de Jixu Geming: Cong Pilin dao Pi Deng, 1972-1976 [The Continuous Revolution
that is Difficult to Continue: From Criticizing Lin Biao to Criticizing Deng Xiaoping] (Hong
Kong: The Chinese University Press, 2008). Some recent important studies in Japanese include, e.g., Mitsuyuki Kagami, Rekishi no naka no Chūgoku Bunka Daikakumei [The Chinese
Cultural Revolution in History] (Tokyo: Iwanami Shoten, 2001), Shin’ichi Tanigawa, Chūgoku
Bunka Daikakumei no Dynamics [The Dynamics of the Chinese Cultural Revolution] (Tokyo:
Ochanomizu Shobō, 2011), and Kaiei Yo, Genocide to Bunka Daikakumei: Uchi Mongol
no Minzoku Mondai [Genocide and the Cultural Revolution: The Ethnic Problem in Inner
Mongolia] (Bensei Shuppan, 2014). While fully acknowledging the contributions of these
recent studies that are based on increasingly detailed data and sophisticated theoretical approach, I turn to a different problem in this article by tackling the question of the nature of political rationality common to different local conditions and historical variations of the Cultural
Revolution.
5 Zigmunt Bauman, Modernity and the Holocaust (Ithaca: Cornell University Press, 2000).
6 Michel Foucault, The History of Sexuality Volume I: An Introduction (New York: Vintage
Books, 1978 [French original 1976]), 140-141, 143-144.
7 Ibid., 149-150.
8 Edward Said. The World, the Text, and the Critic (Cambridge, MA: Harvard University
Press, 1983). See also, Mieke Bal, Travelling Concepts in the Humanities: A Rough Guide
(University of Toronto Press, 2002).
9 In summarizing the basic workings of the system of class labeling, I rely on Mitsuyuki
Kagami, ed. and trans., Shiryō Chūgoku Bunkadaikakumei: Shusshin Kettō Shugi wo Meguru
Ronsō [Materials, The Chinese Cultural Revolution: The Debate on the Hereditary Designation
of Class Labels] (Tokyo: Rikuetsu, 1980), 12-29, who rightly points to the importance of “the
principle of the hereditary designation of class labels” (Xuetonglun).
6
The Journal of Contemporary China Studies, Vol. 4, No. 1
signifies a class label of a person. In addition, there’s the notion of “class of
origin” (chushen jieji), which signifies the class distinction of parents. So, in
theory, the class of origin and the class distinction (of the very person concerned,
that is, the class label of a child of parents) are two separate categories determined
distinctively by different standards. For example, it is well-known that Zhou
Enlai, one of the main figures of the history of the Chinese Revolution, had a
class distinction of “revolutionary cadre,” while the class of origin of his was
“bourgeois official.”10 As will be shown in this article, however, in practice,
the two categories were intricately interrelated. Here, the so-called Xuetonglun
(or weichengfenlun), which can be translated as “the principle (or logic) of the
hereditary designation of class labels,” emerges as another important notion, when
the correlation between the class of origin and the class distinction of the person
concerned is understood as something absolutely positive. For instance, on August
12, 1966, two students from the Beijing Gongye Daxue (Beijing Institute of
Technology)—Tan Lifu and Liu Jing—posted a dazibao (“big character poster”)
entitled “Duilian [a kind of short Chinese traditional verse] as a Starting Point of
Discussion.” The duilian went, “If the parents are [revolutionary] heroes/heroines,
the children of those parents have good characters. If the parents are reactionary,
the children of those parents are great fools. That’s the basics.” 11 The principle
of the hereditary designation of class labels, which can clearly be detected in the
above duilian consisted one major discourse determining the situation of class
labeling during the Cultural Revolution.
This “extremist view” of the hereditary designation, however, was by no means
officially endorsed by the Communist Party. For instance, at the 9th Plenum of the
Central Committee of the Communist Youth League, which was held in July 1966,
Ibid., 17-18.
Beijing Jiating Chushen Wenti Yanjiu Xiaozu [Beijing Research Small Group on the
Problem of Family Class Background], “Chushenlun” [On Family Class Background],
Zhongxue Wengebao [Junior High School Cultural Revolution News], January 18,
1967, Vol. 1: 1-3. See also, Beijing Gongye Daxue Dongfanghong Gongshe, Mao
Zedong Zhuyi Hongweibing [Beijing Institute of Technology, Dongfanghong Group,
Maoism Red Guards], eds., “Tan Lifu Jianghua Zhushi” [Exegesis of the Speech by
Tan Lifu], Reprinted by Qinghua Daxue Dongfanghong Group, Mao Zedong Thought
Red Guards, October 18, 1966. Unless otherwise noted, the primary materials quoted
in this article are taken from Red Guard Publications (Hongweibing Ziliao), an archival
collection of documents in Chinese, which was compiled by the Center for Chinese
Materials, Association of Research Libraries, Washington, D.C., and published in
1975-1979. In selecting and narrowing down the primary materials I cite and discuss
in this article from the vast collection of materials available in Red Guard Publications,
Kagami’s (op. cit.) selection of materials related to Xuetonglun was of great help. In
translating the original Chinese into English, I referred to Red Guard Publications (20
volumes) available in the C. V. Starr East Asian Library of the University of California,
Berkeley.
10
11
The Paradox of Class Labeling in the Mao Era
7
the Central Party Secretary Li Xuefeng presented the following line of statement
regarding the class labeling.
First, we have the theory of class distinction. Secondly, however, we
shouldn’t exclusively focus on class distinction [weichengfenlun]. Thirdly,
we take political expression [zhengzhi biaoxian] seriously.12
In the above quote, the exclusive focus on class distinction signifies the view
of the hereditary designation of class labels. Thus, one important point to be
highlighted is that at least one of many “official” positions on the issue of class
labeling was not purely the principle of the hereditary designation, but the mixture
of both class labeling according to the class of origin and the expression of the
very person concerned.13
However, as is clearly indicated by the article below, which was written by a
person whose name was Yu Luoke, this official position was always on a slippery
slope.
Let’s concede and suppose that we should look at the expression as well as
the origin. Then I want to ask: If one’s origin is bad, but his/her expression
is good, can we erase altogether his/her past records? Can we ignore one’s
defects if his/her origin is good? Is it necessary to add further punishment
if both one’s origin and expression are bad? Is it necessary to intentionally
emphasize one’s merits if both one’s origin and expression are good? Is it
really “according to reason” to do it this way? “Looking at the expression
as well as origin,” in reality, necessarily leads to a slippery slope and to a
morass of “only looking at the origin, and not looking at the expression.”
It’s extremely easy to look at the origin. Everything will be known by just
flipping a page of dang’an [personal dossier].14
Yu rightly points out that the combination of origin and expression was based
on a logic that was very difficult to sustain. However, the actual situation, I argue,
was even more complex. As is clear from the above quote, if it had not been for
the category of expression, the practice and system of class labeling would have
been at least logically more stable. Because, in that case, one’s class distinction
or class label would have been determined solely by one’s class of origin, and the
class label could not have been changed under any circumstances. Of course, what
12
Boda Chen, “Jianchi Maozhuxi Tichu de Jieji Luxian, Tuanjie Daduoshu” [Hold Up
the Class Line Put Forward by Chairman Mao and Unite the Majority of the People],
Cuihui Zifanxian [Destroy the Capitalist and Reactionary Lines], February 1968: 4.
13 Expression (biaoxian) means attitudes and behavior manifested by individuals in relation to the correct political ideology. It can mean, e.g., work attitude, efforts in studying Mao’s works, or even hairstyles or clothes people wear.
14 Beijing Jiating Chushen Wenti Yanjiu Xiaozu, op. cit.
8
The Journal of Contemporary China Studies, Vol. 4, No. 1
Yu was criticizing was this tendency of the system of class labeling becoming
virtually a system of Xuetonglun, or the hereditary designation of class labels.
But the situation was more dynamic in the sense that one’s class distinction was
influenced by one’s current expression. Moreover, the relation or correlation
between one’s class of origin and one’s class distinction was influenced by the
workings of expression, as in the case of Zhou Enlai above. In sum, my contention
here is that the combination of the class labeling and the notion of expression
added a “contradictory” force to the overall system of class labeling. However,
as will be discussed in the following, this apparent “contradiction” was a driving
force of the practice and system of class labeling, especially its culmination during
the period of the Cultural Revolution.
2. Class Labeling and Bio-Power
In the volume I of The History of Sexuality, Foucault describes the “two poles”
that constitute the “power over life,” or bio-power. As the concept of “bio-power”
is crucial in this article, let me quote his explication at length.
One of these poles—the first to be formed, it seems—centered on the
body as a machine: its disciplining, the optimization of its capabilities, the
extortion of its forces, the parallel increase of its usefulness and its docility,
its integration into systems of efficient and economic controls, all this was
ensured by the procedures of power that characterized the discipline: an
anatomo-politics of the human body. The second, formed somewhat later,
focused on the species body, the body imbued with the mechanics of life and
serving as the basis of biological processes: propagation, births and mortality,
the level of health, life expectancy and longevity, with all the conditions
that can cause these to vary. Their supervision was effected through an
entire series of interventions and regulatory controls: a bio-politics of the
population. The disciplines of the body and the regulations of the population
constituted the two poles around which the organization of power over
life was deployed. The setting up, in the course of the classical age, of this
great bipolar technology—anatomic and biological, individualizing and
specifying, directed toward the performances of the body, with attention to
the processes of life—characterized a power whose highest function was
perhaps no longer to kill, but invest life through and through.15
As I have already pointed out, the overall practice and system of class labeling
15
Michel Foucault, The History of Sexuality Volume I, 139.
The Paradox of Class Labeling in the Mao Era
9
in China consisted of two components, that is, the hereditary designation of
class labels and the expression. I contend that in the practice and system of the
class labeling in China, the hereditary designation works as what Foucault calls
the “regulatory controls of the population,” “bio-politics of the population,” or
the process of “totalization,” while the expression works as the “disciplines,”
“anatomo-politics of the body,” or the process of “individualizaiton.” Let me
elaborate on the two components in the following.
First, let me begin with the bio-politics of the population. As is clearly spelled
out by Foucault, the bio-politics takes care of the welfare and well-being of the
population. It is regulatory controls in the sense that it deals with population as
a whole or something “total.” Consequently, birth rates and death rates, public
health, life expectancy and longevity, and so forth, become important issues for
the rationality of bio-politics. In other words, the bio-politics works as a process
of totalization. I argue that this one type of power, in the case of the Chinese class
labeling, appeared in the form of the principle of the hereditary designation of
class labels.
Starting point for the system and practice of class labeling was the Chinese
Communist Party’s eagerness and commitment to distribute equally the lands
monopolized by landlords. Its rationality was to bring welfare and well-being to
the entire Chinese population (the term “people” [renmin] [as in The People’s
Republic of China] was often used in this context) by giving them lands to
cultivate. Thus, each and every member of Chinese population was given a
class label according to the pre-Land Reform level of socio-economic status and
political standing. Here, it is important to recall that the bio-politics engages
with “species,” and hence it is not surprising to find out that the class labels
were “inherited” (often through the patri-line) according to the principle of the
hereditary designation of class labels. From the above instances, it is clear that
the hereditary designation of class labels was a form of the bio-politics of the
population, which Foucault considered as one indispensable component of biopower.
Secondly, let me move on to the other component of bio-power, that is, the
“disciplines: an anatomo-politics of the body.” This component was precisely
the main theme in Foucault’s Discipline and Punish.16 As the well-known term
“docile bodies”17 clearly elucidates, the disciplines, or the disciplinary power,
account for the body, particularly the body of the individuals. It is anatomic and
individualizing in the sense that it sees the targets of the disciplines as having
Michel Foucault, Discipline and Punish: The Birth of the Prison (New York: Vintage
Books 1977 [French original 1975).
17 Ibid., 135-169.
16
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10
individual characters. “Panopticism”18 was one way to accomplish this task of
the disciplinary power. In the Chinese case of the class labeling, the anatomopolitics of the body appears in the form of expression. Even with the given
class labels, people had to continuously show and express that they were of
revolutionary characters. In this sphere of bio-power, people existed not as
species but as individuals, thus having to show individually that they are of good
revolutionary characters. In this sense, I contend that it was also the case that the
other component of the practice and system of class labeling, that is, expression,
worked as the anatomo-politics of the body, which Foucault argued was another
indispensable component of bio-power.
As is discussed in the above, I argue that the practice and system of class
labeling can be better understood if we examine it through the Foucauldian lens
using his concept of bio-power. In the following section, as a next step, I elaborate
on how the two components of the bio-power in the Chinese case of the class
labeling related to each other. By showing the unique combination of the two
components in the case of recent Chinese history of class labeling, I attempt to
show how Foucauldian concepts “travel”19 and let us elucidate the phenomenon
that cannot be seen without the help of his concepts.
3. The“ Failure” of the Class Labeling System
I have argued that the class labeling during the Mao era can be understood as a
historically specific case of bio-power, which consists of two components, that
is, the hereditary designation of class labels and expression. In this section, I
attempt to show that the co-existence of these two aspects of bio-power, in the
Chinese case of the class labeling, led to extreme tensions that culminated in the
omnipresent violence in the period of the Cultural Revolution. Why? Because
in the Chinese case of bio-power, the two components, namely, the hereditary
designation and the expression existed as something logically “contradictory.”
Whereas the former states that the class label is determined by birth, the latter
provides opportunities to change that very fate. I found abundant cases of this
“contradictory logic” in the archive, as I have already quoted a few materials in
the above. Let me quote just one more.
On October 16, 1966, Chen Boda criticized the over-emphasis of class labels:
Not taking seriously the class distinction [jieji chengfen] and the class of
origin [jieji chushen] is a very big mistake. The exclusive focus on the class
18
Ibid., 195-228.
Said, op. cit. See also, Mieke Bal, op. cit.
19 Edward
The Paradox of Class Labeling in the Mao Era
11
distinction [weichengfenlun], and not taking political expression [zhengzhi
biaoxian] seriously are also very big faults. These kinds of incorrect
viewpoints have to be criticized.20
We could regard this apparent “contradiction” as something “negative,”
offsetting the forces of the each of the two components of bio-power. Seen
through Foucauldian lens, however, this “contradictory logic,” in fact works as
something that is extremely positive and effective, and in Foucault’s own words,
“have directly productive role.”21 Let me explain what I mean by this. In Part Four
of the Discipline and Punish entitled “Prison,” Foucault elaborates on the history
of a century and a half of the “failure” of the prison.22
“The self-evidence of the prison,” to use Foucault’s phrase, is based on the
“deprivation of liberty,” which “has . . . the same value for all.”23 Also, it is selfevident because “it makes it possible to quantify the penalty exactly according
to the variable of time.”24 Secondly, the self-evidence comes from the fact that
the prison is “an apparatus of transforming individuals.”25 In other words, “by
locking up, retraining and rendering docile, it merely reproduces, with a little
more emphasis, all the mechanisms that are to be found in the social body.”26 “The
prison is like a rather disciplined barracks, a strict school, a dark workshop, but
not qualitatively different.”27
The prison makes prisoners accede to the discipline that works to let the
prisoners reflect on their crimes themselves and reform their individual characters
and personalities. It is a space in which to educate, reform, and transform them
into human beings who have the personal characters “safe” enough to be returned
to the society outside.
Foucault contends that the prison represents the “failure” of the carceral system
for a century and a half. The prison system has continuously been criticized, and
experienced numerous proposals for reforms. However, it continues to exist until
today. Foucault argues:
[The system of prison creates] the de facto reintroduction, if not actual
increase, of a criminality that the prison ought to destroy—the element of
inverted efficiency; . . . The carceral system combines in a single figure
discourses and architectures, coercive regulations and scientific propositions,
Boda Chen, op. cit., 4.
Michel Foucault, The History of Sexuality Volume I, 94.
Michel Foucault, Discipline and Punish, 229-308.
Ibid., 232.
Ibid., 232.
Ibid., 233.
26 Ibid., 232.
27 Ibid., 233.
20
21
22
23
24
25
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12
real social effects and invincible utopias, programmes for correcting
delinquents and mechanism that reinforce delinquency.28
Thus, Foucault argues that the very essence of what has been called the
“failure” of the prison constitutes a crucial function of the survival of the prison
system itself. “Is not the supposed failure part of the functioning of the prison?”29
According to Foucault, the prison in reality functions not as a system to eliminate
legal violations or illegalities, but to create a new category called delinquent,
which is distinct from the juridical category of offenders. Thus, the prison system
works as a system to carve out a space and rationality for the continuous existence
of delinquency. Consequently, the delinquency is reproduced in the very system in
which it was supposed to eliminate illegalities. In his own words:
For the observation that prison fails to eliminate crime, one should perhaps
substitute the hypothesis that prison has succeeded extremely well in
producing delinquency, a specific type, politically or economically less
dangerous—and, on occasion, usable—form of illegality.30
Foucault sees the above discussion as a relation between discourse, e.g.,
juridical discourse such as pronouncements of judgment, and non-discursive
domains, e.g., social institutions and organizations such as prison system. The
prison presupposed the existence of juridical discourse, because the prison
receives the prisoners who are sent in by the judiciary and its juridical discourse.
In the prison, however, the criminals who violated the law, and who are the objects
of the juridical discourse, exist in a different modality, in which they are subjected
to the carceral techniques of “discipline.” A criminal in the eyes of the judiciary is
a legal offender who committed specific infraction, while a criminal in prison is
a delinquent who possess its own holistic and individualistic personal characters.
Whereas juridical discourse deals with the specific infraction in relation to the
specificity of the crimes he/she committed against the law, the non-discursive
system of the carceral treats prisoners in relation to the characters of him/her as
an individualistic whole. Whereas in the former, what is at issue is no more nor
less than the specific violation of law, in the latter what is at issue is the dangerous
criminality, or the delinquent character of the individual subjects. To put it another
way, it is not that the delinquents exist first and the carceral system corrects them,
but rather, the prison itself (re)produces the category of “dangerous delinquents”
through the techniques of the carceral, because without such category, the prison
system lacks subjects to be normalized. In other words, the prison has a kind of
Ibid., 271.
Ibid., 271.
30 Ibid., 277.
28
29
The Paradox of Class Labeling in the Mao Era
13
self-referential structure that reproduces the basis of legitimation of the existence
of the prison itself. This once again, results from the gap between the juridical
discourse and the non-discursive realm of the carceral system.
Let me go back to the case of Chinese class labeling. I would argue that in the
place of the non-discursive realm of the carcral system in the Foucault’s case of
the prison, the system of dang’an, or personal dossier, exists in the case of the
Chinese class labeling. As is well known, personal dossier is an official document
produced and supervised by the party organization at relevant levels of work
unit, or danwei. It contains information on, for example, class of origin, present
class distinction, and political attitudes and behavior, or expression, toward
political campaigns. By nature of the personal dossier—documenting the class of
origin, class distinction, and expression—, it plays a central role in the practice
and system of class labeling. This system of personal dossier, like the system
of prison, was continuously criticized as a “failure.” For instance, on October
5, 1966, the Political Bureau of the Central Military Commission promulgated
“The Urgent Order Regarding the Proletarian Cultural Revolution in the Military
Attached Schools.”
With regard to all of our comrades who have been “framed up” as “counterrevolutionaries,” “counter-party elements,” “right elements,” “fake leftist,
actual rightist,” etc., these stigmas have to be declared invalid, and also we
have to correct wrongs and reinstate their honor in front of the people. The
individual materials of self-criticisms which these people were forced to write
have to be returned to them and have to be discarded. The materials which the
party committees, the work groups, and others have created in order to rectify
these comrades may be burned in front of the people after consulting with the
people about ways of dealing with them, and also after the consensus of the
31
people and the comrades who were rectified, has been archived.
In addition to these relatively moderate criticisms of the system of dang’an,
there abound numerous cases of violent attacks on the physical spaces where the
dossiers were kept. For instance, on February 17, 1967, the Central Party and
the State Council published “A Few Regulations on Ensuring the Security of
Classified Documents and Dossier Materials.”
In the course of the Cultural Revolution, people from some work units
attacked and occupied the rooms in which confidential documents were kept,
and fought against each other to obtain personal dossier materials as well as
31 Zhongyang Junwei Zongzheng [Central Military Commission], “Guanyu Jundui
Yuanxiao Wuchanjieji Wenhua Dageming de Jinji Zhishi [Urgent Order Regarding the
Proletariat Cultural Revolution in Military-Attached Schools],” October 5, 1966.
14
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other confidential documents. These incidents are leading to serious leakage
of confidential information. In order to prevent similar incidents in the
future, and also to prevent “bad elements” engaging in destructive activities
taking advantage of the situation, and moreover to ensure the security of
confidential documents and personal dossier materials, we will enforce the
following restrictions.32
However, despite the harsh criticisms and even physical attacks on the system
of personal dossier, as reported in the above pronouncement, it continued to exist
throughout the period of the Mao Era, and even to the present, though of course
the importance of personal dossier has significantly decreased in the Reform Era
since 1978.
This process in China, I would argue, parallels the “failure” of the carceral
system as described by Foucault, with some significant differences. First of
all, the system of personal dossier was supposed to provide an inventory with
which the practice of class labeling could be smoothly carried out. In that sense,
however, the system was a “failure.” As already demonstrated in the above, the
system became a site for continuous struggle and fluctuation of the very system
of class labeling. However, if the practice of class labeling had been so rigid and
predetermined as to make the personal dossier unnecessary, the system of personal
dossier would have disappeared long before the whole system of class labeling
collapsed after the conclusion of the Cultural Revolution. In reality, to parallel
Foucault’s argument, the system itself reproduced the “unstable” and flexible
system of class labeling which, in turn, legitimated the existence of the very
system of personal dossier. This process of self-reproduction is quite similar to the
history of the carceral.
However, there exists an important difference. That is, whereas in the case of
prison, it was the gap between juridical discourse and non-discursive realm of
prison that created the self-reproducing structure, in the case of the class labeling,
it was the gap between the discourse and practice of the hereditary designation on
one hand, and the discourse and practice of expression on the other, that created
the self-reproducing structure of the personal dossier system. In sum, the system
of personal dossier existed hand in hand with the continuing reactivation of the
contradictory system and practice of class labeling, which contributed to the
heightening of the class labeling activity in the Mao Era.
32 Zhonggong Zhongyang , Guowuyuan, “Guanyu Quebao Jiyao Wenjian he Dang’an
Cailiao Anquan de Jixiang Guiding [A Few Regulations on Ensuring the Security of
Classified Documents and Dossier Materials],” February 17, 1967.
The Paradox of Class Labeling in the Mao Era
15
4. Maoism, Bio-Power, and Racism
As the epigraphs at the very beginning of this article express, the fundamental
question that prompted me to write this article was the paradox that the apparently
“convivial” ideal of Maoism and the Chinese Revolution resulted in the turmoil
and violence of the Cultural Revolution. Rational choice oriented explanation
might argue that the “free-rider problem” was the starting point of the collapse of
the “utopia”; increasingly more and more people took advantage of the situation
and tried to extract as much resources as possible from the egalitarian distribution
of wealth promulgated by Maoism, without contributing to the collective wellbeing or even when personal gains meant attacking other people’s welfare. Some
others might argue that under the then emergent situation of chaos, people took
to personal revenges of the past incidents that were unrelated to the revolutionary
ideal. These arguments are valid in their own right. I would argue, however, that
one crucial rationality behind Maoism, here specifically that of class labeling,
will be missed if we only follow these lines of arguments. I contend that the
same rationality that supported the “utopian” or “convivial” side of Maoism,
thus central rationale of Maoism, was what led to the omnipresent violence in
the practice and system of class labeling, particularly its culmination during the
Cultural Revolution. Here, Foucault’s notions of bio-power and racism are needed
as essential lens to see through the mechanism of this paradox.
Foucault argues that modern society consists of what he calls bio-power. As
already discussed, whereas “one pole,” that is, disciplinary power spatially places
individuals for the purpose of discipline and self-discipline, the “other pole,”
that is, regulation, takes care of the population as a whole, often as citizens in the
nation-states. The two poles combined, bio-power manages and governs people as
a collective or a population. Bio-power’s concern is the life and well-being of the
population. According to Foucault, “One might say that the ancient right to take
life or let live was replaced by a power to foster life or disallow it to the point of
death.”33 And thus, indices of population such as birth rate and death rate become
important. Bio-power described as such is a power that takes care of the lives and
welfare of the population, and is apparently full of reason, rational, convivial, and
benign. However, Foucault thinks this very power could at the same time become
a power that destroys and kills human beings in a scale and cruelty that were
unthinkable in a society without bio-power.
33
Michel Foucault, The History of Sexuality Volume I, 138.
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Yet wars were never as bloody as they have been since the nineteenth
century, and all things being equal, never before did regimes visit such
holocausts on their own populations.34
Foucault argues that the principle of race is one of important factors that make
this mass destruction possible. As already described, bio-power is a power that
takes care of the lives of the population (or nation). As long as the power follows
this principle, it is impossible to attack people of its own nation or people of
other nation since it is supposed to be a “power to foster life.” But the notion of
race brings to bio-power a principle of distinction, exclusion, and discrimination.
Foucault’s concept of race goes beyond the strictly “biological” and can be
understood as a notion that distinguishes between the people who can be excluded
to be attacked or killed, and the people who have to be included and protected.
And more often than not, this distinction or exclusion is accompanied by the
notion of “good race” and “bad race,” “normal race” and “abnormal race,” “perfect
race” and “defective race.”
Discourses of “goodness-badness,” “normality-abnormality,” and “perfectnessdefectiveness” abound in the period of the Cultural Revolution. For example,
the discourse of “Black Five Elements” (Hei Wulei) (five groups of “bad” class
background) and “Red Five Elements” (Hong Wulei) (five groups of “good”
class background) may be understood as something similar to what Foucault
has discussed using his broader notion of race. The Black Five Elements are the
five groups of people who have “bad” class labels of, for example, landlord, rich
peasant, counter-revolutionary, criminal, and rightist. The Red Five Elements
are the five groups of people who have “good” class labels of, for example,
revolutionary cadre, revolutionary soldier, revolutionary martyr, worker, poor and
lower-middle peasant.35
A household was bad class when it was headed by a “four-bad-categories
element (si lei fenzi), defined as a landlord, rich peasant, counterrevolutionary (none in Chen Village), or “rotten element” (huai fenzi).
Among these, the true pariahs were the village’s two former landlords:
They were treated like lepers. If you greeted them your class standing was
considered questionable. They had no friends. They didn’t dare to talk to
each other, either.36
Ibid., 136-137.
These classifications varied according to the socio-economic or political situations of particular time and space. For example, in some locations, there were “Four
Bad Elements” instead of five.
36 Jonathan Unger, “The Class System of Rural China: A Case Study,” in James L.
Watson, ed. Class and Social Stratification in Post-Revolution China (Berkeley and
Los Angeles: University of California Press, 1984), 124.
34
35
17
Both the people who advocated as well as attacked the notion of hereditary
designation of class labels, used the above dichotomous terminologies in their
discourses. Let me quote a few examples of these discourses from the archival
materials. The first is an example of the discourse of the group of people who
advocated the hereditary designation.
We are the heirs of the Revolution and the protesters by nature and birth,
who crown heaven and stand on the great earth. . . .
Some people slander us a “zilaihong” [“red by birth”]. You dirty dogs, your
defamation is actually a great compliment to us. . . . Our parents love the
Party and the Chairman Mao the most, and have guided us since we were
very little. . . . Thus, from inside to outside, we have wholly become “red,”
as the revolutionary spirits of our parents permeate into our body every
second to the next. . . . We are the pure and untainted blood of the proletarian
class. . . .
Do we have shortcomings or not? There are shortcomings! Compared to
our merits, however, these shortcomings are secondary and unimportant!
In order to thoroughly accomplish the Revolution, and in order to make our
“redness” purer and more untainted, we have to overcome our shortcomings!
. . . Whoever dares to oppose to this project, we resolutely dictate over them
and take lives! . . . We all, the “red by birth,” will fight against the “authority”
and its dirty dogs of bourgeois class. We fight with the ghosts and monsters,
big and small, with our thoroughly red spirits of the Revolution! . . .37
The following is an example of the discourse of the group of people who
opposed the hereditary designation.
Emperors, military generals, ministers, officials who live on bribery, and
local gentries and bosses, these people are vampires and homicidal Satan,
who ride on people’s heads and oppresses the people. They are the wastes
of human species. They . . . think that the reason why they have the right to
oppress and exploit the people is because their fate is good and their “bloodline is noble” [xuetong gaogui]. Also, they think the reason why the peasants
are oppressed and exploited is because their fate is bad and their “blood-line
is humble” [xuetong beilie].
37 Beijing Daxue Fushu Zhongxue Hongqi Zhandou Xiaozu [Beijing University
Attached Junior High School Red Flag Struggle Small Group], “Zilaihong Zhanqilaile!
[Red-By-Birth Have Stood Up!],” Bingtuan Zhanbao [Army Corps Battle News],
November 26, 1966: 4.
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The imperialists, for the purpose of exploiting and oppressing the working
people of its own nation as well as people of the colonial and semi-colonial
areas, promote the reactionary blood-line theory [fandong xuetonglun] like
crazy. For example, propaganda of racists [zhongzuzhuyizhe de xuanchuan] is
something of this kind. The reactionary writer of our nation, Pan Guangdan,
promoted the so-called “eugenics” [youshengxue] a few decades ago, but this
was also something of this kind.38
As is clear from the above quotes, I contend that the Chinese case of the class
labeling was a historically specific case of “racism” in the sense Foucault has
discussed in his works. Foucault writes:
. . . The new procedures of power that were devised during the classical age
and employed in the nineteenth century were what caused our societies to
go from a symbolics of blood to an analytics of sexuality. Clearly, nothing
was more on the side of the law, death, transgression, the symbolic, and
sovereignty than blood; just as sexuality was on the side of the norm,
knowledge, life, meaning, the disciplines, and regulations.39
As Foucault does elsewhere, he treats these two components as not
“without overlappings, interactions, and echoes.”40 According to Foucault, the
“overlappings” in this case, took two forms: one being racism and the other being
psychoanalysis. In this article, I focus on the former, that is, the notion of racism.
Let me quote at lengths Foucault’s explication of how the “overlappings” related
to Nazism.
Beginning in the second half of the nineteenth century, the thematics of
blood was sometimes called on to lend its entire historical weight toward
revitalizing the type of political power that was exercised through devices
of sexuality. Racism took shape at this point (Racism in its modern,
“biologizing,” statist form): it was then that a whole politics of settlement
(peuplement), family, marriage, education, social hierarchization, and
property, accompanied by a long series of permanent interventions at the
level of the body, conduct, health, and everyday life, received their color
and their justification from the mythical concern with protecting the purity
of the blood ensuring the triumph of the race. Nazism was doubtless the
38 “Guo Dajiang” Zhandouzu [“Crossing the Wide River” Struggle Group],
“‘Xuetonglun’ yu Duoquan Douzheng: Pipan ‘Liandong’ Fandong Sichao zhi Yi
[‘Hereditary Designation’ and Struggle for Grasping the Political Rule: Criticizing the
‘Liandong’ Reactionary Thoughts, Part One.],” Chunlei [Spring Thunder], Vol. 11, July
1967: 1.
39 Michel Foucault, The History of Sexuality Volume I, 148.
40 Ibid., 149.
19
most cunning and the most naïve (and the former because of the latter)
combination of the fantasies of blood and the paroxysms of a disciplinary
power. A eugenic ordering of society, with all that implied in the way of
extension and intensification of micro-powers, in the guise of an unrestricted
state control (etatisation) was accompanied by the oneiric exaltation of a
superior blood; the latter implied both the systematic genocide of others and
the risk of exposing oneself to a total sacrifice.41
The discourses of blood in the Chinese cases I have already described can
be grasped as paralleling the “overlappings” of the symbolics of blood and the
analytics of sexuality. Thus, I contend that as Nazism was a case of bio-power
and racism, the Chinese case of the class labeling was a historically specific
case of bio-power and racism. If the class labeling was a variant of bio-power, it
necessarily requires the rationalization by the modern state. Thus, I would argue
that Maoism, specifically the practice and system of class labeling was a clear
case of state racism sharing the similar logic Foucault elaborated on with regard to
the mechanism of the state racism of Nazism. However, detailed examination of
the question of the historical differences between Maoism and Nazism is beyond
the scope of this article.
Conclusion
After discovering the paradox of bio-power, that is, the fact that the terror of mass
destruction coexists with the power that takes care of life, Foucault went on to
explore the genealogy of bio-power. His tentative conclusion was:
Political rationality has grown and imposed itself all throughout the history
of Western societies. It first took its stand on the idea of pastoral power, then
on that of reason of state. Its inevitable effects are both individualization and
totalization. Liberation can only come from attacking, not just one of these
two effects, but political rationality’s very roots.42
In other words, Foucault attempted to explore ways to criticize and resist, or
counter-attack, bio-power. This was what he tried to do until the last minutes of
his life.
Going back to the Chinese case of class labeling, there still remains formidable
Ibid., 149-150.
Michel Foucault, “Politics and Reason,” in Lawrence D. Kritzman, ed., Michel
Foucault: Politics, Philosophy, Culture: Interviews and Other Writings 1977-1984
(New York and London: Routledge, 1988 [original lecture 1979]), 85.
41
42
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The Journal of Contemporary China Studies, Vol. 4, No. 1
task of exploring the genealogy of the Chinese case of bio-power that led to the
practice and system of class labeling, which was an important manifestation
of the political rationality of Maoism. It will be an extremely challenging task
since we have to look at the specific Chinese history and tradition as well as the
incorporation of “Western” political rationality of the modern state including
Socialism and Communism. Although formidable, it will be a fascinating topic to
pursue in the future.
About the Author
Seio Nakajima is Associate Professor of Sociology and Asian Studies at the
Graduate School of Asia-Pacific Studies, Waseda University. He has received
Ph.D. in Sociology from the University of California at Berkeley. He has
conducted organizational analyses of the Chinese film industry, as well as
ethnographies of Chinese film audiences and consumption. His research has
appeared in From Underground to Independent (P. G. Pickowicz and Y. Zhang,
eds. [2006]), Reclaiming Chinese Society (Y. Hsing and C. K. Lee, eds. [2009]),
and The New Chinese Documentary Film Movement (C. Berry, L. Xinyu, and L.
Rofel, eds. [2010]). His recent articles include “Prosumption in Art” (American
Behavioral Scientist, 2012), “Re-imagining Civil Society in Contemporary Urban
China: Actor-Network-Theory and Chinese Independent Film Consumption”
(Qualitative Sociology, 2013), and “Chinese Film Spaces: The Social Locations
and Media of Urban Film Consumption” (Continuum: Journal of Media and
Cultural Studies, 2014).
Address: Graduate School of Asia-Pacific Studies, Waseda University, 1-21-1
Nishiwaseda, Shinjuku-ku, Tokyo 169-0051, Japan
E-mail: [email protected]
The Construction of the Double Burden:
Gendered Childcare System
in Post-Mao China
Fumie OHASHI
Abstract
This paper examines the shift of the childcare system in post-Mao China, by
reviewing the “children’s project” (ertong gongzuo) during the 1980s and the
early 1990s from a gender perspective. The children’s project is a comprehensive
child welfare project including nurseries and preschool education. It was assigned
to the All China Women’s Federation (ACWF) after 1981. In the earlier years, the
ACWF mainly addressed women’s contribution on Socialist Modernization, and
paid less attention to child welfare. Official statements, documents, and personal
memoirs at that time reveal that there were disputes among ACWF cadres on
whether and how they should “balance double burden on a yoke”. That is to say,
ACWF itself was facing the “double burden” on their policies, when the wellknown “Women-Go-Home” (funü huijia) debates retargeted women to take the
double burden of production and reproduction. Moreover, presumably ACWF
had a small budget for this policy under the reduction of public investment. Local
women’s federation encouraged jobless youths and retirees to run “home-based
nurseries” (jiating tuo’ersuo), which required a smaller budget. This paper shall
discuss how the double burden was politically constructed and how the cost of
reproduction was controlled in the gendered economic regime of post-Mao China.
Keywords
gender, double burden of production and reproduction, the children’s project,
Women’s Federation, home-based nurseries
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The Journal of Contemporary China Studies, Vol. 4, No. 1
Introduction
The question of women in post-Mao China has attracted a good deal of attention
among overseas feminists in the late 1980s and the early 1990s. Emily Honig
and Gail Hershatter’s Personal Voices: Chinese Women in the 1980’s illustrated
Chinese women’s expectations and anxiety about new social order through
documentary research.1 In Japan Emiko Ochiai2 and Yoko Akiyama3 shed light on
the “Women Go Home” (funü huijia) debates in the magazine Chinese Women
(Zhongguo Funü), the official journal of the All-China Women’s Federation
(Hereafter abbreviated to “ACWF”) 4, focusing on the issue of the double burden
of work and family for Chinese women. Later in the mid-1990s, the fact that
Li Xiaojiang, a well-known pioneer of women’s studies in post-Mao China,
issued a critical statement about the Fourth World Conference on Women held in
Beijing under the auspices of the ACWF also became known thanks to Akiyama’s
translation.5 By this time, Li was challenging the discourse of socialist women’s
liberation in accordance with the interests of the Communist Party of China
(hereafter abbreviated to “CPC”) and attempting to create a new tide of Chinese
feminism that would address the new subject position of “women”, including the
existence of the pressure of the double burden. The contributions of the women
who vocalized their own experiences in “Chinese Women” and the radical
statements made by Li give the impression of a multitude of voices within Chinese
feminism which dissented from the gender regime of the CPC and its socialist
slogan of “what men can do, women can do too”.
However, until now there has not been much analytical research about how the
post-Mao gender regime has been constructed and how women themselves dealt
with their new challenges in this period. How did the double burden become a
1
Emily Honig and Gail Hershatter, Personal Voices: Chinese Women in the 1980s, (Stanford:
Stanford University Press, 1988).
2 Emiko Ochiai “Chugoku Josei Ha Ie Ni Kaeru Ka: Gendaika Rosen To ‘Fujokaika’ Ronso No
Yukue” [Will Chinese Women Go Home? : Modernization and ”Women Go Home”], Kindai
Kazoku To Feminizumu [Modern Family and Feminism] (Tokyo: Keiso Shobo, 1989).
3 Yoko Akiyama ed., trans. Chugoku Josei: Onna, Shigoto, Sei [Chinese Women: Women,
Work and Sexuality], (Tokyo: Toho Shoten, 1991).
4 In this paper I will refer to the All-China Women’s Federation as the ACWF. When referring to the women’s federation of each local area I will append the place-name, e.g. Beijing
Women’s Federation. When there is no place-name appended I use the term to refer to the
women’s federation in the sense of the comprehensive network from the national to the local
level.
5 Li Xiaojiang, Akiyama Yoko trans., “Watashi Ha Naze 95 Nen Sekai Joshei Taikai NGO
Foramu He No Sanka Wo Kyozetsu Shita Ka” [The Reasons Why I Refused to Attend World
NGO Conference on Women in 1995], Chugoku Kenkyu Geppo　[China Research Monthly]
49(10), (1995): 34-37.
The Construction of the Double Burden
23
salient issue of women following the reform and door-opening policy? What sort
of political and economic situation in the 1980s has conditioned the multitude of
voices of Chinese women? After experiencing a shutdown during the Cultural
Revolution, the ACWF resumed its activities in 1978, on the cusp of the reform
and door-opening policy. On resuming their activities in the early to mid-1980s
after this period of political silence, how did the ACWF become involved in
problems concerning women? Can we arrive at a new understanding of Chinese
feminism by conducting a thorough consideration of these and other issues?
In line with these concerns, this paper reconsiders women’s policy in China in
the 1980s and the political and economic situation which formed its background.
As a working hypothesis, I would like to initially reject the interpretation of the
double burden as a problem inherent to the social group known as “women”. Of
course, many women across time and space confront the reality of the double
burden of work and family, or production and reproduction.6 However, the way
in which women carry that burden is always socially constructed and endowed
with meaning, and thus that process is not uniform. Mariko Adachi suggests that
reproductive labor is not necessarily carried out in the “home” (household), that
it can be borne by the market economy (e.g., businesses) or by the non-market
economy (e.g., households, localities, the state) and furthermore, that as a result of
this, it forms a branch of socially necessary labor which is unavoidably marketized
regardless of how it is socially valued.7 In China, there are two examples that
back up this suggestion: the public canteens during the Great Leap Forward and
the workplace nurseries during the planned economy era. These public canteens
and workplace nurseries functioned at least partially as a means of labor force
reproduction, and their costs were also borne outside the household.
The way in which the double burden has haunted women in China is also by no
means a problem inherent to Chinese women but can be understood in the context
of the political and economic situation in China in the 1980s. Furthermore, when
we look at things in this light, the voices of sympathy raised in response to the
“Women Go Home” debate and objections to the gender equality regime can be
re-understood as the reaction of women themselves to the process of gendering of
a particular “role”.
This paper will draw on materials and policy documents published by
the ACWF and local women’s federations, especially the Beijing Women’s
6
See, for example, Arlie Hochschild and Ann Machung, The Second Shift: Working Parents
and the Revolution at Home, (New York: Viking Penguin, 1989).
7 Mariko Adachi, “Saiseisan Ryoiki No Gurobaruka To Setai Hoji (Householding)”
[Globalization of Reproductive Sphere and Householding], Ito Ruri, Adachi Mariko eds.,
Kokusai Ido to ‘Rensa Suru Jenda’: Saiseisan Ryoiki No Gurobaruka [Transnational Migration
and “Gender in Chains” : Globalization of Reproductive Sphere], (Tokyo: Sakuhinsha, 2008) :
224-262.
24
The Journal of Contemporary China Studies, Vol. 4, No. 1
Federation, and periodicals published by the ACWF management at the time,
and memoirs published later on. I mainly focus on materials concerning the
“children’s project” (ertong gongzuo),8 a childcare, child-rearing and educational
project which was a central concern of the ACWF particularly in the 1980s. By
considering the background situation that led to generational reproduction arising
as the problem of women’s double burden, I ultimately wish to reveal the gender
politics surrounding reproductive labor in China.
1. The History of the ACWF in the Early 1980s
1) Resumption of ACWF Activities
After the Cultural Revolution, at the end of the 1970s China was pressing forward
with a realistic transformation aimed at improving productivity in the areas of
agriculture, industry, national defense and science and technology under the
slogan of the “Four Modernizations”. In 1977, on the cusp of the reform and dooropening policy, a group of female leaders, starting with Kang Keqing, who had
been forced to suspend their activities due to the political conflict, founded the
ACWF Leader’s Group and began criticizing the Gang of Four. They supported
the reform drive, and in September 1978, they held the Fourth National Congress
of Chinese Women, where they announced that “the Four Modernizations
need women, and women need the Four Modernizations”. This was the official
resumption of the ACWF’s activities, with Kang as the president. In an interview
reflecting back on her life, Luo Qiong, the main secretary and vice president of
the ACWF at the time, recalled that the following four points were the targets of
the ACWF from the winter of 1978 to the beginning of 1980: (1) Examination of
women’s roles in the construction of socialist modernization, (2) Amendment of
the Marriage Law, (3) Establishment of a Marriage and Family Research Group
to facilitate the amendment of the Marriage Law, (4) Problematization of the
immorality of extramarital affairs and promotion of harmony within the family.9
In general, at the time the ACWF was concerned with establishing the
8
The Chinese word ertong (child) refers to children younger than shaonian (youth). According
to the Xiandai Hanyu Cidian (Dictionary of Modern Chinese), “shaonian/youth” refers to children aged from ten to fifteen or sixteen. Moreover, since you’er (infant) is defined as “young
ertong” (a young child), we can conclude that “ertong/child” refers to children who are aged
from infancy to the early grades of elementary school. In line with this definition, in this paper
I will refer to the project related to the care, nurturing and education of young children as “the
children’s project.”
9 Luo Qiong and Duan Yongqiang, Luo Qiong Fangtanlu ［Interview with Luo Qiong］,
Beijing: Zhongguo Funü Chubanshe, 2000: 184-188.
The Construction of the Double Burden
25
orientation of women’s policy in the context of the reform and door-opening
policy, and controversy surrounding the amendment of the Marriage Law and
accompanying domestic ethical issues. Indeed, with respect to the Marriage Law,
the ACWF committed itself to drawing up a draft, and in 1980 it succeeded in
realizing the revision of the law. Then, how did the ACWF address their other
goal of seeking women’s role in the context of modernization? I shall examine the
actual challenges that they faced during this period.
2) The ACWF’s Approach to the Children’s Project
As I have described above, from the beginning of the resumption of its activities,
the ACWF advocated the importance of the women’s movement in the context of
the “Four Modernizations”. According to Luo Qiong, when the Second Session of
the Fourth Executive Committee of the ACWF was held on March 22, 1979, the
members discussed how the ACWF could place the focus of women’s policy on
socialist modernization while upholding the spirit of the Third Plenary Session of
the 11th Central Committee of the Communist Party of China.
Prior to this meeting, Kang Keqing had expressed her opinion in an interview
in the People’s Daily that “the main focus of the ACWF’s projects should be on
rural wome.” This opinion was supported at the Second Session of the Fourth
Executive Committee of ACWF as well.10 However, in actual fact in the early
1980s the ACWF switched the focus of their activities to the Children’s Project.
This policy reversal was clearly under the directive from the Communist Party
Central Committee (hereafter abbreviated to “CPCC”). On February 2, 1981, the
CPCC Secretariat decided that, “The ACWF should make the nurturing, fostering
and education of more than three hundred million children the focal point of its
efforts” (February Second Directive). Furthermore, on May 6, 1981, Document
No.19 of the CPCC once again announced the principle that the ACWF should
take a leading role in the nurturing, fostering and education of children.11 In other
words, through these two statements, the CPCC made explicit its position that the
main task of women’s policy should be children’s education and childcare. After
the third Plenary Session of the 11th Central Committee of the Communist Party
of China, a growing number of voices claimed that the rebuilding of childcare
and children’s education was necessary in order for the construction of a new
socialism. These two statements were made under such circumstances.
I speculate that until this time, children’s education and childcare were not
necessarily regarded as the task of ACWF in China. Since the founding of the
10
11
Ibid., 185.
Zhong Fa (1981) 19 Hao Wenjian “Guanyu Liang Ge Huiyi Qingkuang Ji 1981 Nian Fulian
Gongzuo Yaodian De Baogao” [China 1981 Document No. 19 “Report on Two Conferences
and the Focus of Women’s Policy in 1981”], March 19, 1981.
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PRC, the nursery system had been under the authority of the Department of Health
and the kindergarten system had been under the authority of the Department
of Education. According to Liu Xiangying, since the founding of the PRC the
childcare system had been split into two types of facility, namely “nurseries”
(tuo’ersuo), which looked after infants aged from zero up to three years of age,
and “kindergartens” (you’eryuan), which were aimed at children aged between
three and six or seven years of age and which had a dual focus on childcare and
education. The former were supervised by the Department of Health and the latter
by the Department of Education. The main distinction between the two was the
age of the children, and they were identical in that they were both operated to
support parents’ working life and children’s development.12Accordingly, in this
paper I refer to the system of nurseries and kindergartens in the 1980s collectively
as the “childcare system”. However, recently social concern towards kindergarten
education has grown in China that the number of facilities which place more
importance on infants’ education than on supporting parents’ working life is
increasing.
However, according to the bulletin of the National Conference for the Childcare
Project, many nursery schools and kindergartens were forced to close due to the
political turmoil of the Cultural Revolution, and the childcare system received a
serious blow.13 The National Conference for the Childcare Project was held in July,
1979, by the Departments of Health and Education, the National Bureau of Labor,
the All-China Federation of Trade Unions and the ACWF. As can be seen from
its heading the bill of participating organizations, by this point the Department
of Education was promoting a reform of the kindergarten administration and also
attempting to expand the provision of kindergarten education to pre-school age
children.14
Meanwhile, we can see that the ACWF was already aware of its position as an
important stakeholder in the establishment of nursery schools and kindergartens
12
Liu Xiangying “Chuugoku Ni Okeru Nyuji Kyoiku No Genjo To Kadai: ‘0 Saiji Shudan
Hoiku Ni Kansuru Ishiki Chousa No Kentou Wo Chuushin Ni” [Conditions and Agendas of
Early Childhood Education in China: Survey of the Attitudes toward Collective Education of
the Infants under the Age of One], Fukuyama Shiritsu Joshi Tanki Daigaku Kyouku Koukai
Sentaa Nenpou [Fukuyama Female College International Education Center Bulletins] 7 (2000):
149-158.
13 Zhonggong Zhongyang Guowuyuan Zhuanfa “Quanguo Tuoyou Gongzuo Huiyi Jiyao” [The
Bulletin of the National Conference for the Childcare Project]. The quotation is from: ACWF
ed. Hunyin Jiating Ertong Gongzuo [Conjugal Family Children Project], (Beijing: Renmin
Chubanshe, 1982).
14 See, Sayoko Nishiyama “Shakaishugi Shijo Keizai Seisakuka Chugoku no Yojien Gyosei
ni kansuru Kenkyu (Sono 1)” [Study on Preschool Education Policy in China under Socialist
Market Economy] , Kikan Hokkai Gakuen Daigaku Keizai Ronshuu [Quarterly Bulletin of
Economics, Hokkai Gakuen University]53 (1), (2005): 43-73.
The Construction of the Double Burden
27
at the same time. However they did not necessarily view childcare system as
a central concern to be prioritized over others. For example, as a result of the
National Conference for the Childcare Project, the Childcare Project Direction
Group was set up within the office of the ACWF with Chen Muhua at the helm,
who was the Deputy Prime Minister for the State Council at the time and later
became the president of the ACWF in 1988. Nevertheless, in the aforementioned
bulletin, this group was introduced as “comprised of comrades in positions of
responsibility from units in the Department of Education, the Department of
Health, the Planning Commission, the Construction Committee, the Agricultural
Committee, the Ministry of Finances, the Ministry of Commerce, the Ministry of
Civil Affairs, the National Bureau of Labor, the Civil Construction Bureau, the
All-China Federation of Trade Unions, the ACWF, and the National Committee
for the People’s Health, Sanitation, and Children. Apparently the group was
jointly operated by various agencies and organizations in 1979, rather than on the
initiative of the ACWF.
Indeed, it also appears that there were debates occurring within ACWF cadres
regarding how they should respond to the two statements issued by the CPCC
in 1981. In her recollections, Luo Qiong expressed the situation in the ACWF
at the time as having to “carry two burdens on one yoke”15. The “two burdens”
mentioned here are women’s participation in production and the childcare issue.
The former reflected a major interest in socialist women’s liberation, while the
latter was the order issued by the CPCC in 1981. In her interview, Luo describes
the situation as follows:
There were two problems. Firstly, for the Women’s Federation, the priority
issue had been the mobilization of women into production. To achieve the Four
Modernizations economic development would have to be central, and so the
Women’s Federations should have pursued this task. However, we were told to
focus on the Children’s Project, so what would become of the relation between
these two issues? Secondly, the children’s project had been one of the tasks of
the Women’s Federation since before. Services enabling women to participate
in production work usually develop alongside economic development.
Previously, there had been a division of labor in the children’s project. The
Department of Health had managed services for children under three years old,
and the Department of Education had managed those for children over three
years old. Now the ACWF was going to lead the whole children’s project, but
we were not sure if we had the capability to take on such a project. Then Sister
Deng Yichao (one of the earliest Communist activists, the wife of Zhou Enlai)
15
Luo and Duan, op. cit., 189.
The Journal of Contemporary China Studies, Vol. 4, No. 1
28
encouraged us to have the courage to take on our great responsibility to nurture
future generations. Sister Kang Keqing also suggested an image, that we would
“pick cotton with one hand and cradle babies with the other”16.
Luo’s narrative shows that the ACWF management, on receiving orders from
the CPCC in 1981, decided to make the children’s project (“cradling babies”) an
important concern at the same time as adhering to their objective to encourage
women to participate in production (“picking cotton”).
Here, we can see the linkage between the “two burdens” of the ACWF, which
was the key concept of women’s policy at the time, and the double burden
(of unpaid reproduction and paid production) which was the driving force in
Chinese feminism in the 1980s and after. One reason for this is that the process of
gendering of a “role” is apparent in the policy formation of the time. As we can see
in Luo’s narrative, previously the childcare system in China had not been a matter
of concern only for the ACWF but had been formed through the joint involvement
of multiple ministries and organizations, starting with the Departments of Health
and Education. However, the CPCC’s orders in 1981 singled out generational
reproduction as the ACWF’s central concern. Meanwhile, the ACWF, which
was on the receiving end of this turnaround, decided to address the issues of
generational reproduction and of women’s participation in economic participation
simultaneously. In other words, the issue of generational reproduction was not a
burden that society bore equally, but was rather a matter concerning women.
Secondly, I would like to draw attention to the fact that from this point on the
ACWF dealt with the problem of the costs accompanying the childcare system. In
actual fact, the problem of the costs of the generational reproduction had already
been addressed in relevant discussions since the National Conference for the
childcare project in 1979. For example, the conference bulletin describes the need
to solve the budgetary issues of staff salaries, insurance etc. costs associated with
childcare facilities as follows:
There is currently a budget shortfall among the nurseries and kindergartens.
In particular, nongovernmental urban nurseries and kindergartens are facing
financial difficulty and this is having a serious effect on the development and
improvement of their services. However, our country is currently undertaking
various projects and there are limitations to the national budget. Therefore,
we must be independent, deliver regeneration by our own efforts in the midst
of hardship, and carry out various projects with a spirit of diligence. We must
cooperate with the state, collectives, communities and individuals and use
16
Luo and Duan, op. cit., 189
The Construction of the Double Burden
29
various methods in order to solve the problem of cost provision.
As I have already mentioned, the Ministry of Health and the Ministry of
Education have played a central role in the construction of the childcare system
in China. In the latter 1980s, the ACWF published a multilingual booklet entitled
“Services for Children in China: A Brief Introduction” (hereafter referred to as
“the booklet”) aimed at publicizing the children’s project abroad. It mentioned
the existence of “nurseries and kindergartens in medium and large cities operated
directly by the Department of Education and the Department of Health” and
notes that “the facilities and personnel etc. conditions are excellent, and will
serve as a model.”17 From this description, it is clear that even after the ACWF
decided in 1981 to make the children’s project its central project, nurseries and
kindergartens receiving financial support from the Department of Education and
the Department of Health continued to operate. According to this booklet, in 1985
14,797,000 children were enrolled at a total of 172,262 kindergartens operated
by the Department of Education. In the original bulletin published in 1979 too it
mentions that, “regarding the costs of all ranks of kindergartens operated by the
Department of Education and nurseries operated by the Department of Health, ...
when determining guidelines for the fiscal year for education and health projects,
all ranks of finance departments shall integrate such costs in advance,” and it
seems that this policy continued at least throughout the 1980s. According to
Nishiyama, however in the early 1990s the market economy grew, and as a result
many of this type of kindergarten either closed or became privatized.18
What the National Conference for the Childcare Project in 1979 rather intended
to achieve through its mention of costs was to enact a policy that removed smallscale childcare facilities which existed in many forms at the time as much as
possible from the responsible control and financial support of the Department
of Education and the Department of Health. In support of this, after the above
reference to financial support for “all ranks of kindergartens operated by the
Department of Education and nurseries operated by the Department of Health”,
with regard to costs for nurseries and kindergartens for internal and external
businesses and organizations’ laborers and staff it merely notes that, “each
responsible unit shall settle its own affairs”.
Regarding cost provisions for “urban non-governmental nurseries and
kindergartens” which were “facing financial difficulty” it indicated several
options: (1) Childcare fees will be paid by guardians of children; (2) Maintenance
costs will be paid to nurseries and kindergartens by the unit to which the
17 ACWF. Zhongguo Ertong Gongzuo Jiekuang [Services for Children in China: A Brief
Introduction] (year of publication and publisher unknown).
18 Nishiyama, op. cit.
30
The Journal of Contemporary China Studies, Vol. 4, No. 1
children’s guardians belong. Standards for maintenance costs will be determined
by the local childcare supervisory organization according to the costs covered
towards their own nurseries and kindergartens by the units owned by the whole
people and the actual conditions on the ground; (3) Costs associated with opening
fees, installation of large-scale equipment and house-fitting will be secured as
the situation demands by the regional finance department from its own funds; (4)
Regarding age-limit and early retirement of childcare staff, the principal unit of
each nursery or kindergarten will settle the matter based on its economic situation.
If difficulty arises applications for aid can be made to the regional finance
department.
Throughout the 1980s, there were more than a few cases of communitybased private nurseries receiving financial assistance from the government, as
in (3) above. In the aforementioned booklet too, nurseries and kindergartens
that are “privately run but receive public funds” are described as “convenient
and welcomed by parents since community organizations build facilities using
government funds and then operate them”.
However, there were also “private” facilities that did not receive any public
funds. The booklet introduces “public facilities governed by the Department
of Health and the Department of Education” and “private facilities” such as
community-based nurseries, as well as “individual facilities” such as “home-based
nurseries” and daycares operated by individuals. It describes “individual facilities”
as “run by young individual managers, retired teachers, and housewives who rely
on their own resources. They use a wide variety of childcare methods, there are no
age restrictions on enrollment, and parents can ask to have drop-off and pick up
times suited to their working hours, so they are highly regarded by the public”.
We can view the children’s project, which the ACWF undertook in response to
instructions from the central government in 1981, as focused on the issue of how
to manage these small-scale private facilities and secure and expand services for
children’s education and childcare at the same time as keeping down financial
costs.
In order to further verify this point, in the next section I will conduct a more
detailed consideration of the actual situation in Beijing in more detail while also
exploring the children’s project, which the ACWF engaged in at the local level,
and how cost problems associated with the “burden” of generational reproduction
in the context of this development were handled.
The Construction of the Double Burden
31
2. The ACWF and the Children’s Project in Beijing
1) The Socialization of Housework and “Home-based Nurseries”
In urban China in the early 1980s, various attempts were made to solve the
problem of balancing women’s production participation and reproduction of labor
power. For example, the Beijing Women’s Federation established a brokerage
agency for domestic workers known as the “March-Eight Housework Service”
(Sanba Jiawu Fuwu Gongsi). This was designed to solve the urban social
problem at the time of “job-waiting youth”, that is, youth awaiting employment
opportunities, by allocating them employment as domestic workers at the same
time as providing reproductive labor power to those struggling to balance
housework and employment. This project was supported not only by the ACWF
but also by intellectuals. For example, in an article of the magazine China Women,
Fei Xiaotong, a prominent sociologist expressed his approval for the project.19
Previously, I have highlighted the policy debate on women’s labor at the time
as a background factor for the ACWF launching this type of project at this point
in time.20 In the 1980s the “Women Go Home” argument, which attempted to
foster urban job creation by sending women back to the home, was advocated
by fringe elements of the central government, and some voices even called for
it to be reflected in policy. The leaders of the ACWF immediately made critical
objections to this proposal. In this struggle, Luo Qiong in particular asserted that
by encouraging the socialization of housework through the growth of tertiary
industry, it would be possible to create new employment opportunities at the
same time as improving the lives of urban residents. Luo actually supported the
development of the domestic helper service.
From this sequence of events, it becomes clear that the issue of who should
shoulder the burden of reproductive labor and how was thrust to the foreground
at the beginning of the 1980s. The “Women Go Home” policy recommendation
suggested job creation through women’s return to the home at the same time as
embedding the costs of reproductive labor in the household through the generation
of unpaid housewives’ labor. The ACWF's projects aimed at the socialization of
housework can be understood as negotiation by women over these costs.
In promoting the socialization of housework, the ACWF also undertook projects
19 Fei Xiaotong “Yi Xiang Xin De Shiye” [A New Enterprise], Zhongguo Funü [China
Women] (May, 1984): 4-5.
20 Fumie Ohashi, Gendai Chuugoku no Ijuu Kaji Roudousha: Nouson-Toshi Kankei to
Saiseisan Roudou no Jendaa Porittikusu [Migrant Domestic Workers in Contemporary China:
The Politics of Reproductive Labor in Rural-Urban Relations], (Tokyo: Ochanomizu Shobo,
2011)
The Journal of Contemporary China Studies, Vol. 4, No. 1
32
other than the domestic helper service. From around 1980, the Beijing Women’s
Federation organized retired workers, housewives and “job-awaiting youth” (daiye
qingnian) from households which fulfilled certain conditions to operate nurseries
in their own homes, or “home-based nurseries”.
How were the facilities known as “home-based nurseries” run? We can
gain a concrete picture of what they were like from materials published by the
ACWF. Photograph 1 is the frontispiece from the aforementioned booklet. The
photograph shows two elderly people, two infants and one baby, and the caption
reads, “Home-based nurseries highly regarded by the public”. Clearly, one pattern
of “home-based nurseries” was where retired people looked after a very small
number of local children in their own homes.
Photograph 1
33
The Construction of the Double Burden
Number of
Facilities
Home-based
Nurseries
Average Number
Number of children of Children Per
at Facilities
Family
290
2,200
7.59
Home-based Nurseries
/ Nursing Households
12,971
37,597
2.90
(Home-based Nurseries)
(1,147)
(25,529)
(22.26)
(Nursing Households)
(11,824)
(12,068)
(1.02)
1988
/Home-based Nurseries
Nursing Households
15,119
173,079
11.45
1989
/Home-based Nurseries
Nursing Households
17,000
200,000
11.76
1980
1985
Table 1: Number of Children at Home-based Nurseries in Beijing
Source: Beijing Difang Zhi Bianzuan Weiyuanhui [Beijing Local Chronicle Editorial
Committee] Beijing Zhi: Renmin Tuanti Juan; Funü Zuzhi Zhi [Beijing Local
Chronicle: Associations: Chronicle of Women’s Organization] (Beijing: Beijing
Chubanshe, 2007): 398-399.
Table 1 shows the trend in the number of children looked after in home-based
nurseries, based on numerical data obtained from the official local chronicle of
Beijing. According to statistics from 1983 referred to in the same publication,
there were approximately 6,400 childcare facilities in the city of Beijing,
including 284 “home-based nurseries”. There were 30,000 children using these
facilities, and the average number of children per facility was 6.88 children. In
comparison, due to the nature of childcare in individuals’ homes, the number of
children in “home-based nurseries” shows a very small shift. The figures for 1985
show a dramatic expansion in the use of “home-based nurseries”, with the number
of children per facility exceeding on average twenty children. However, due to
the establishment during the same period of “nursing households”, where one or
two children were cared for in an individual’s home, the total average number of
children declined to 2.90 children.21
Besides being small-scale businesses, home-based nurseries had other benefits:
“Immediate enrollment is possible; they will look after children from early
morning to late night; there is no need to make children hurry or ride on crowded
trains or carry them about in bad weather; in special circumstances they look
after children overnight; they accept mentally retarded or disabled children at a
21 It is assumed that the size of “home-based nurseries” and “nursing households” differed,
however, due to a lack of materials in this paper I am not able to suggest a concrete definition
for each of them.
The Journal of Contemporary China Studies, Vol. 4, No. 1
34
very reasonable price; the change in environment is small in the sense that it is
from one house to another, so it is easy for children to adapt”.22 This increase in
nurseries had a concrete effect on contemporary Beijing society, which was said
to be “poor for childcare”. In Haidian district, as a result of the increase in “homebased nurseries”, the rate of utilization of childcare rose from 57% in 1983 to
82.72% in 1986.23
2) Cost Bargaining in Home-based Nurseries
After 1983, the home-based nurseries project, which had been implemented
experimentally since 1980, spread rapidly. According to “Beijing City Women’s
Project Fifty Years,” edited by the Beijing Women’s Federation, in April 1983
the secretariat of the CPCC instructed the ACWF to further develop home-based
nurseries and solve the childcare problem within three years. In response to these
instructions, on April 22 the Beijing Women’s Federation proposed to the city
communist party committee and local government that responsibility for the
organization and management of home-based nurseries be handed over to the
ACWF.24 After discussion in the Mayor’s Executive Conference, on May 19 the
CPC Beijing Committee announced the direction for the construction of homebased nurseries in the form of passing on the ACWF’s proposal.25
The Beijing Women’s Federation’s proposal to the CPC committee and local
government emphasized the reduction in financial costs due to the construction
of home-based nurseries. The ACWF showed provisional calculations that, “In
the case of public nurseries, to solve the childcare difficulties for more than
20,000 children, the government would need to provide more than 50 million
RMB; however, even supposing that it contributed a 14 RMB subsidy per child,
home-based nurseries would cost under 3 million RMB per year”.26 What sort
of influence did the ACWF’s concern for finances apparent here have on the
operation of home-based nurseries?
The “childcare subsidy” mentioned in the ACWF’s proposal was not actually
provided directly from the government to each childcare facility. Rather, it
should be understood as an indirect social security benefit. On using home-based
22 Beijing Difang Zhi Bianzuan Weiyuanhui [Beijing Local Chronicle Editorial Committee]
Beijing Zhi: Renmin Tuanti Juan; Funü Zuzhi Zhi [Beijing Local Chronicle: Associations:
Chronicle of Women’s Organization] (Beijing: Beijing Chubanshe, 2007): 399.
23
24
Ibid., 399.
“Guanyu Dali Fazhan Jiating Tuo’ersuo De Qingshi” [Proposal to further develop homebased nurseries], April 22, 1983.
25 Jing Fa (1983) 18 Hao Wenjian [Beijing 1983 Document No.18] . This explanation is based
on Beijing Funü Lianhehui [Beijing Women’s Federation], Beijing Shi Funü Gongzuo Wushi
Nian [Beijing City Women’s Project Fifty Years] (Two Volumes), (Beijing: Beijing Shifan
Daxue Chubanshe, 1999): 364.
26 Beijing Difang Zhi Bianzuan Weiyuanhui, op.cit., 398.
The Construction of the Double Burden
35
nurseries, workers could apply to their work unit for reimbursement for childcare
usage. This is a concrete example of the provision of “maintenance costs” by
guardian’s work units as suggested in the Bulletin of the National Conference for
the Childcare Project in 1979.
From the description in the Beijing Local Chronicle it is also clear how the
costs of home-based nurseries were covered under the subsidy system. First,
home-based nurseries were registered with the local Women’s Federation branch
and women’s congress. By submitting a bill which had been stamped with the
seal of the local women’s federation to the work unit to which they belonged,
guardians of children could receive a “childcare subsidy” in accordance with
the regulations of the Beijing City government.27 In other words, local women’s
federations were dealing with the problem of costs of the children’s project by
taking a comprehensive role in home-based nurseries in the form of managing
childcare subsidies.
From the 1980s to the early 1990s, the Beijing Women’s Federation rapidly
issued at least five regulations and edicts in order to systematize the management
system of home-based nurseries: “Some Methods for the Establishment and
Management of Home-based Nurseries,” “Requirement for the Management
of Home-based Nurseries in Beijing,” “Announcement of the Implementation
of ‘Beijing Local Ordinance for the Management of Home-based Nurseries’
(trial),” “Beijing City Code for the Management and Usage of Maintenance Fee
of Home-based Nurseries (trial),” “Some Opinions about the Reinforcement
of the Management of Home-based Nurseries”. These documents clarified the
requirements for nursery staff, equipment and childcare procedures, standards
for nursery management systems, the amount of subsidy to be provided by a
guardian’s work unit (20 RMB for daytime care and 24 RMB for all-day care for
children over three years-old and 24 RMB for daytime care and 30 RMB for allday care for children under three years-old) and various other factors.
By the end of the 1980s, demand emerged for increased improvement and
specialization in kindergarten education, and home-based nurseries too began
to place emphasis on qualitative control. In 1989, the Beijing City government
issued regulations to manage the quality of home-based nurseries. Under
this management structure, local departments of education and community
organizations hired retired kindergarten teachers to conduct regular inspections
of home-based nurseries. It was stipulated that inspections should cover areas
such as the daily schedule, the weekly menu, whether the meals budget was
being used appropriately, work responsibilities of childcare staff, hygiene
control and so on. Under these circumstances, home-based nurseries, which had
27
Beijing Difang Zhi Bianzuan Weiyuanhui, op.cit., 398.
36
The Journal of Contemporary China Studies, Vol. 4, No. 1
previously been managed simply according to each household’s situation, began
to invest in equipment. Some acquired items such as desks, chairs, beds, electric
fans, television sets, refrigerators and so on, while others acquired toys, books,
and musical instruments such as pianos, organs, accordions, electric organs,
percussion instruments and tape recorders. Meanwhile, nurseries equipped with
air-conditioning systems and bathrooms or offering classes in art, music or foreign
languages also began to appear.28 However, when we consider that home-based
nurseries were originally founded on the self-owned capital of housewives and
retirees, we can imagine that there were cases where the owners of home-based
nurseries were unable to bear the increase in cost burden in the late 1980s.
Perhaps also due to this situation, in the early 1990s the number of home-based
nurseries began to decline. In October 1992, the Beijing City financial bureau issued the “Notice on the Payment of Subsidy for Infants”.29 This notice announced
the provision of an infant subsidy of 20 RMB to the wages of workers who were
parents of infants between the ages of seven months and six years old. This subsidy would be provided regardless of whether the parents actually used childcare
services. With the launch of this system, the previous system whereby childcare
usage fees were collected through “subsidies” from work units was abolished, and
parents had to pay for the cost of childcare directly from their household budget.
After this institutional reform, local women’s federations that had managed the
flow of funds for home-based nurseries by issuing the bills lost their access to the
social security budget contributed by people-owned work units. After this, many
home-based nurseries ceased to operate under the management of the women’s
federations, and as a result they were left to their own devices. Moreover, as the
service industry expanded into local neighborhoods many people began to convert
their houses into other businesses. Thus, in the early 1990s, the number of users of
home-based nurseries began to decline.30
Moreover, from this period onward, not only home-based nurseries but also
childcare facilities in Beijing in general began to decline. According to Zhang
Yan and Wu Ying, in Xicheng district there were fifty kindergartens in 1987, but
by 1998 there were only twenty-five, and by 2002 there were only seventeen. In
Dongcheng district there were twenty facilities in 1998 but by 2002 this number
had decreased to twelve, and in Xuanwu district there were thirteen facilities in
1998 but by 2002 this number had decreased to nine.31 The result of the panel re28
29
Beijing Difang Zhi Bianzuan Weiyuanhui, op.cit., 399-400.
Jing Cai Zong (1992) 1811 Hao [Beijing Financial Bureau 1992 Document No.1811].
30 Beijing Funü Lianhehui, op.cit., 367-368.
31 Zhang Yan and Wu Ying “Beijing Shi Jiedao Youeryuan Fazhan Licheng De Huigu Yu
Fansi” [Reflect on the Development of Community Kindergartens in Beijing], Xueqian Jiaoyu
Yanjiu [Preschool Education Studies], (June, 2006): 38-41.
The Construction of the Double Burden
37
search conducted in Beijing from 2004 to 2006 by Frontiers of Gender Studies (FGENS), Ochanomizu University shows that there was a considerable drop in the
usage of childcare facilities among the young generation aged under 35 years-old
at the time of the survey, while childcare assistance from both maternal and paternal relatives such as grandparents increased.32 We can assume that this change
resulted from the shift from the subsidy distribution system which had existed up
until the 1980s. Under this system, reproductive costs were covered through the
“subsidy” paid by work units. However, in 1992 this system underwent a total collapse, and these costs were reallocated within the family in the form of a supplement to wages.
However, a distinctive feature of the case in China is that in spite of this budget
reallocation, the majority of women did not choose the option of returning to the
home. According to the results of the panel research by Ochanomizu University,
rather it was found that in Beijing dual-income households actually increased, and
most women who were full-time home-makers were non-specialists with low education.33 We must pay attention to the fact that the situation in China following
the reform and door-opening policy was completely different to the situation in
post-war Japan or nineteenth-century England, when full-time home-makers appeared following the introduction of the male breadwinner-type household salary
model as well as social policy which supported it. Detailed surveys and research
are still required to find out why women in China with low academic records or
lacking specialist skills become full-time homemakers. However, I suspect that
many of them are engaged in irregular or intermittent informal employment which
does not show up in official statistics, such as part-time domestic labor, station and
street vendors and temporary help with businesses belonging to acquaintances.
To summarize, after the reform and door-opening policy, the ACWF chose to
follow the policy of “balancing the double burden” and fought to protect their key
principle of women’s participation in labor production in the midst of the repeated
occurrence of the debate over whether “Women Go Home” should be incorporated
into official policy. The fact that the ACWF firmly adhered to this principle is
considered to have resulted in the high number of dual-income households today.
However, the problem of how to secure the costs of reproductive labor remains
unsolved since the 1980s. In particular, it can be said that the costs of generational
32
Nobuko Nagase and Rieko Nagamachi, “Kazoku to Hoiku” [Family and Childcare], Kazoku,
Shigoto, Kakei ni Kansuru Kokusai Hikaku Kenkyu, Chugoku Paneru Chosa, Daiichi Nendo
Hokokusho [An International Comparative Study of Family, Work and Household Budget,
China Panel Survey, First Year Report], (F-GENS Publications Series 11, 2005): 121.
33 Nobuko Nagase and Yumiko Murao “Shugyo Rireki” [Career History], Kazoku, Shigoto,
Kakei ni kansuru Kokusai Hikaku Kenkyu, Chugoku Paneru Chosa, Daiichi Nendo Hokokusho
[An International Comparative Study of Family, Work and Household Budget, China Panel
Survey, First Year Report], (F-GENS Publications Series 11, 2005): 59-76.
38
The Journal of Contemporary China Studies, Vol. 4, No. 1
reproduction were ultimately imposed on the family, in many cases on women,
through the abolition of the subsidy system for childcare usage.
Conclusion
Today, most feminist economic theorists share the view that certain costs
inevitably accompany child-rearing and childcare, yet such labor is often
performed as unpaid work by women. From this point of view, I would like to
conclude my considerations in this paper by reviewing the children’s project
undertaken by the ACWF in order to see the shifts that occurred in Chinese
feminism in the 1980s.
The ACWF recommenced its activities at the same time as the reform and
door-opening period, and it originally envisaged aligning itself with the “Four
Modernizations” through promoting women’s participation in productive labor.
However, in 1981 they were ordered by the CPCC to focus on the Children’s
Project as the central task for women’s policy. In other words, from this period
onward, the ACWF was carrying the “double burden” of productive labor and
reproductive labor.
However, at the National Conference for the Childcare Project in 1979 it was
decided to restrict government control and financial support for childcare. Under
these circumstances, the ACWF chose not to promote public facilities under
the jurisdiction of the Department of Education or the Department of Health,
or welfare facilities for workers run by companies and organizations, or private
local childcare facilities which were partially supported by local government.
Rather, they promoted the development of “home-based nurseries” operated
by retirees and housewives using their own resources. Home-based nurseries
were maintained through the subsidy system by which children’s guardians
applied to their own workplace for a subsidy, in other words, welfare expenses.
At this point, local women’s federations had access to the budget system for
reproductive costs by issuing the bills for using home-based nurseries. However,
in the 1980s there was an increase in necessary management costs as investment
in equipment and facilities became increasingly necessary as part of the drive
to improve the quality of children’s education, and in the early 1990s, as market
economization progressed, the subsidy system was eventually abolished. Under
such circumstances, home-based nurseries went into decline and the number of
childcare services users also decreased. Until the 1980s, it was deemed desirable
that the burden of reproductive costs was partially shouldered by society.
However, we can understand the 1980s as a period during which reproductive
costs were increasingly being entrusted to women who functioned as individual
The Construction of the Double Burden
39
units who lived through the family and family relationships.
The phenomena of women speaking and writing about the suffering of the
double role in the pages of Chinese Women and the attempts of Li Xiaojiang and
other intellectuals to develop ideas based on the subject position of “women”
emerged during this period of struggle over the burden of reproductive costs.
Perhaps we can view the voices of the various women who raised their voices
during this period in the development of Chinese feminism as voices of implicit
criticism of the androcentric nature of political and economic structures which
sought to conceal the very existence of these invisible costs.
About the Author
Fumie OHASHI has been an assistant professor at Graduate School of Asia
Pacific Studies, Waseda University since September 2012. Previously, she was
a postdoctoral fellow of Japan Society for the Promotion of Science (JSPS)
(April 2010-August 2012) and a research fellow of Institute for Gender Studies,
Ochanomizu University (September 2009-March 2010). Ohashi received her
Ph.D. in China Studies and Gender Studies from Ochanomizu University in
September 2009. She was a visiting scholar of Women’s Studies Center of
Peking University from April 2011 to March 2012. Her research interests include
migration and gender in China and East Asia, globalization of reproductive
sphere, transnational feminisms in Asia. Ohashi’s publication Migrant Domestic
Workers in Contemporary China: The Politics of Reproductive Labor in RuralUrban Relations (in Japanese, Ochanomizu Shobo, 2011) was awarded The 31st
Yamakawa Kikue Award in 2011.
Address: Graduate School of Asia Pacific Studies, Waseda University, NishiWaseda Bldg. 7F, 1-21-1 Nishi-Waseda, Shinjyuku-ku, Tokyo 169-0051 Japan
Email: [email protected]
The Politics of Drug Price Control Policy
in China: Regulation, Deregulation
and Re-regulation
Sabirina LUK
Abstract
This study examines how the dynamic interaction of institutions, interests and
ideas has shaped the drug price control policy in China over time. It argues that
since the 1980s, the common interests of drug manufacturers, drug wholesalers, hospitals and doctors to seek profits have driven them to collude together,
thereby making the drug price control policy ineffective. In order to stop collusion
between these parties and reduce drug prices, this study suggests that the government should implement drug price control policy in coordination with other health
care reforms. Health care reforms include implementing the zero-markup policy
for drugs at hospitals, improving the remuneration system of doctors, improving
the transparency and openness of centralized drug procurement system, cracking
down on commercial bribery and rooting out malpractice in the pharmaceutical
industry and hospitals. This study provides the most updated information about
high drug prices and drug price control policy in China.
Keywords
Drug price control policy, pharmaceutical distribution system, regulation, reregulation, China
Introduction
In China, the government has been very concerned with high drug prices and the
problems it brings in its wake. Unreasonably high drug prices have led to patients
suffering from the problem of ‘difficult to see a doctor, expensive to see a doctor’ (kan bing nan, kan bin gui), the deteriorating doctor-patient relationship, the
disappearance of essential medicines that are cost-effective and efficacious from
42
The Journal of Contemporary China Studies, Vol. 4, No. 1
the market, and an increased risk of overdrafts in medical insurance funds. The
problem of ‘feeding hospitals by selling drugs’ (yi yao yang yi) is one of the main
reasons attributing to high drug prices and leading to many households falling
into poverty or falling back into poverty. In March 2014, Premier Li Keqiang said
at the Twelfth National People’s Congress that “abolish[ing] the practice of compensating for low medical service charges with high drug prices”1 would be one
of the key aspects of deepening health care reform in China. Indeed, the ongoing
problem of high drug prices needs to be solved in order to achieve President Xi
Jinping’s goal of providing affordable and accessible health care for all Chinese
people. This study examines how the dynamic interaction of institutions, interests
and ideas has shaped the drug price control policy in China over time and why the
current drug price control policy is ineffective in reducing patients’ medical costs.
It then discusses measures which can reduce drug prices and patients’ medical
costs more effectively.
1. Analytical Foundations: Institutions, Interests,
and Ideas
A review of existing literature shows that there is the lack of study examining
the development of drug price control policy in China. Meng et al. examined the
impact of retail drug price control policy implemented in late 2000 on hospital
expenditures in two Shandong hospitals by reviewing hospital financial records.
They found that “[d]rug expenditures for all patients still increased rapidly in the
two hospitals after implementation of the pricing policy.”2 Liang et al. compared
the performance of drug price control in China with that of Japan and Korea.
They found that China’s drug price regulation was ineffective because it could
“neither provide incentives for physicians to prescribe cheap drug nor effectively
restrain the stake-holders to avoid government regulation.”3 Sun et al. described
pharmaceutical price regulation in China since the 1990s and found that regulated
price decreases “had limited effect in controlling health spending growth.”4
1
The National People’s Congress of the People’s Republic of China, “Report on the Work of
the Government,” (March 18, 2014), at <http://www.npc.gov.cn/englishnpc/Speeches/201403/18/content_1856703.htm> (search date: 12 May 2014).
2 Meng, Qingyue, Gang Cheng, Lynn Silver, Xiaojie Sun, Clas Rehnberg, and Göran Tomson,
“The Impact of China’s Retail Drug Price Control Policy on Hospital Expenditures: A Case
Study in Two Shandong Hospitals,” Health Policy and Planning, 20-3 (May 2005):185.
3 Liang, Xue-feng, De-quan Zheng, and Li-juan Yang, “The Dilemma of Drug Price Regulation
and Countermeasures in China,” (2009), at http://www.umdcipe.org/conferences/policy_exchanges/conf_papers/Papers/1401.PDF (search date: March 4, 2014).
4 Sun, Qiang, Michael A. Santoro, Qingyue Meng, Caitlin Liu, and Karen Eggleston,
“Pharmaceutical Policy in China,” Health Affairs, 27-4 (July/August 2008):1045.
The Politics of Drug Price Control Policy in China
43
Huang and Yang used a macro-perspective to examine pharmaceutical price
regulation policy in China and found that the policy was ineffective in reducing
patients’ medical costs. However, these existing studies fail to explain why the
drug price control policy is ineffective in reducing drug prices since the 1980s.
Besides, they fail to indicate forces that have shaped the development of drug
price control policy in China over time. In order to fill the research gap, this study
uses the analytical framework of institutions, interests and ideas to examine the
development of drug price control policy in China.
“Institutions are the rules of the game in a society.”5 They include both “formal
rules such as constitutions and laws enforced by the state”6 and informal constraints such as “routines, norms, and conventions intrinsic to the organizational
structure of the polity.”7 Different institutional structures set different political
rules of the game8 and create different sets of opportunities and constraints that
privilege some interests at the expense of others, letting some political actors win
while others lose.9 Institutions affect how political actors define their goals, interpret their self-interests and choose their strategies.10 Actors “have preferences,
goals, and objectives.”11 They “devise strategies and tactics to pick the alternative
that best enables them to satisfy their material self-interest.”12 They “try to opti5
North, Douglass C., Institutions, Institutional Change and Economic Performance
(Cambridge; New York: Cambridge University Press, 1990), 3.
6 Kingston, Christopher,“Institutions: Rules or Equilibria?,” in Norman Schofield and Gonzalo
Caballero, eds., Political Economy of Institutions, Democracy and Voting (Berlin, Heidelberg:
Springer-Verlag Berlin Heidelberg, 2011), 14.
7 Hall, Peter A, and Rosemary C.R. Taylor, “Political Science and the Three New
Institutionalisms,” Political Studies, 44-5 (December 1996), 938.
8 Shih, Mei-chiang, Milan Tung-wen Sun, and Guang-xu Wang, “The Historical
Institutionalism Analysis of Taiwan’s Administrative Reform,” International Review of
Administrative Sciences, 78 -2 (2012), 307.
9 (i) Thelen, Kathleen, and Sven Steinmo, “Historical Institutionalism in Comparative Politics,”
in Sven Steinmo, Kathleen Thelen and Frank Longstreth, eds., Structuring Politics: Historical
Institutionalism in Comparative Analysis (New York: Cambridge University Press,1992), 1-32.
(ii) Hall, Peter A, and Rosemary C.R. Taylor, op.cit., 938.　(iii) Immergut, Ellen M., “The
Theoretical Core of the New Institutionalism,” Politics & Society, 26-1 (March 1998), 5-34.
(iv) Thelen, Kathleen, “Beyond Comparative Statics: Historical Institutional Approaches to
Stability and Change in the Political Economy of Labor,” in Glenn Morgan, John L. Campbell,
Colin Crouch, Ove Kaj Pedersen, and Richard Whitley, eds., The Oxford Handbook of
Comparative Institutional Analysis (Oxford; New York: Oxford University Press, 2010), 4162.
10 (i) Thelen, Kathleen, and Sven Steinmo,op.cit.,1-32.　(ii) Koelble, Thomas A., “The New
Institutionalism in Political Science and Sociology,” Comparative Politics, 27-2 (January
1995), 231-243.(iii) Hall, Peter A, and Rosemary C.R. Taylor, op.cit., 936-957.
11 Kopstein, Jeffrey and Mark Lichbach, “The Framework of Analysis,” in Jeffrey Kopstein
and Mark Lichbach, eds., Comparative Politics: Interests, Identities, and Institutions in a
Changing Global Order (Third edition) (Cambridge; New York: Cambridge University Press,
2009), 23.
12 Ibid., 23.
44
The Journal of Contemporary China Studies, Vol. 4, No. 1
mize their gains and minimize their losses.”13 The underlying interests pursued
by actors or groups and their actions to further or protect these interests can affect
policy outcomes.14 Ideas are “notions which link norms and values to practical
action.”15 They “play a powerful role in shaping communication and information policies.”16 They help policy actors make sense of their world, their interests
and their position within it.17 They “provide the basic cognitive template through
which decision makers interpret complex problems and assess the validity of alternative policies.”18 They also help policy actors strategically craft frames to make
policies politically plausible and acceptable.19 Ideas are “important sources of ‘actors’ preferences and of their decisions to exploit windows of opportunity”20 and
hence, “policy change has a strong ideational component.”21 In sum, this study
will demonstrate the dynamic interactions of institutions, interests and ideas in
shaping the development of drug price control policy in China.
2. Methodology
This study will adopt a case study approach to examine the development of drug
price policy control in China over time. It is the preferred strategy when ‘how’
or ‘why’ questions are being asked about the subject of the inquiry22 and when
the empirical inquiry deals with “the subtleties and intricacies of complex social
situations”23 that “cannot easily be reduced to simple causal models or statistical
13
14
Ibid.,23.
Dickson Clare, and Kent Buse, “Understanding the Politics of National HIV Policies: the
Role of Institutions, Interests and Ideas,” (2008), at <www.hivpolicy.org/Library/HPP001555.
pdf> (search date: 12 May 2014).
15 Alaszewski, Andy, and Patrick Brown, Making Health Policy: A Critical Introduction
(Cambridge, UK: Polity, 2012), 208.
16 Galperin, Hernan, “Beyond Interests, Ideas, and Technology: An Institutional Approach to
Communication and Information Policy,” The Information Society, 20-3 (2004), 161.
17 Béland, Daniel, and Alex Waddan, The Politics of Policy Change: Welfare, Medicare, and
Social Security Reform in the United States (Washington, DC: Georgetown University Press,
2012), 8.
18 Galperin, Hernan, op.cit.,161.
19 (i) Campbell, John L., “Institutional Analysis and the Role of Ideas in Political Economy,”
Theory and Society, 27-3 (June 1998), 380-381.(ii) Campbell, John L., “Ideas, Politics, and
Public Policy,” Annual Review of Sociology, 28 (2002), 26-7.
20 Cortell, Andrew P., and Susan Peterson, “Altered States: Explaining Domestic Institutional
Change,” British Journal of Political Science, 29-1 (January 1999), 189.
21 Béland, Daniel, and Alex Waddan, op.cit., 8.
22 (i) Yin, Robert K, Case Study Research: Design and Methods (Third edition) (Thousand
Oaks, Calif.: Sage Publications, 2003), 1.　(ii) Thomas, Gary, How to Do Your Case Study: A
Guide for Students and Researchers (Los Angeles, Calif.; London: SAGE, 2011), 4.
23 Denscombe, Martyn, The Good Research Guide: For Small-scale Social Research Projects
(Second edition) (Maidenhead, Berkshire: Open University Press, 2003), 38.
The Politics of Drug Price Control Policy in China
45
tests.”24 The strength of the case study lies in its ability to study process25 and offer
“a more rounded, richer, more balanced picture”26 “with many kinds of insights
coming from different angles, [and] from different kinds of information.”27
This study will collect data through different sources in order to have a holistic account to the development of drug price control policy in China. It includes
books, journal articles, reports from the World Bank, government websites, Chinese and English newspaper articles. Data collection through multiple sources can
facilitate data validation28 and add rigour, richness, breadth and depth to the case
examined. 29It helps provide a more complete picture of the development of drug
price control policy in China over time.
3. Drug Price Regulation During Mao’s era
(1949-1976)
The People’s Republic of China (PRC) was founded on 1 October 1949 by the
Chinese Communist Party (CCP) under the leadership of Mao Zedong. The CCP
ensured its control over government operations and sustained the strong partystate by dominating and penetrating all levels of government from provinces, cities, counties to townships.30 Leading party cadres at various levels concurrently
occupied the highest posts in local government institutions31 and established party
cells within government entities to oversee all activities.32 The CCP’s adoption
of “a hierarchical highly centralized political power structure”33 allowed political
24
David, Matthew, “Editor’s Introduction,” in Matthew David, ed., Case Study Research.
Volume I., (London; Thousand Oaks, Calif: SAGE, 2006), XXVI.
25 Stoecker, Randy, “Evaluating and Rethinking the Case Study,” in Matthew David, ed., Case
Study Research (Volume IV) (London; Thousand Oaks, Calif.: SAGE, 2006), 330.
26 Thomas, Gary, op.cit., 4.
27 Ibid., 4.
28 Denscombe, Martyn, op.cit.,38.
29 Denzin, Norman K., and Yvonna S. Lincoln, “Introduction: The Discipline and Practice
of Qualitative Research,” in Norman K. Denzin and Yvonna S. Lincoln, eds., Handbook of
Qualitative Research (Second edition) (Thousand Oaks: Sage Publications, 2000), 5.
30 (i) Townsend, James R, and Brantly Womack, Politics in China (Third edition) (Boston:
Little, Brown and Company, 1986). (ii) Gu, Sharron, Law and Politics in Modern China: under
the Law, the Law, and above the Law (Amherst, NY: Cambria Press, 2009).(iii) Guo, Xiaoqin,
State and Society in China’s Democratic Transition: Confucianism, Leninism, and Economic
Development (New York: Routledge, 2003). (iv) Duckett, Jane, The Chinese State’s Retreat
from Health: Policy and the Politics of Retrenchment (Abingdon, Oxon: New York: Routledge,
2011).
31 Li, Cheng, “China’s Communist Party-state: The Structure and Dynamics of Power,”
in William A. Joseph, ed., Politics in China: an Introduction (Oxford; New York: Oxford
University Press, 2010), 166.
32 (i) Gu, Sharron, op.cit., 132.　(ii) Duckett, Jane, op.cit., 14.
33 Saich, Tony, Governance and Politics of China (Second edition) (Basingstoke, Hampshire
[UK]; New York: Palgrave Macmillan, 2004), 28.
46
The Journal of Contemporary China Studies, Vol. 4, No. 1
leaders to formulate policy behind closed door and make decision through a topdown approach. From 1949 to 1976, Mao was the unchallenged leader of his
generation. His ‘lean to one side’ foreign policy towards the Soviet Union helped
position the PRC “as a key member of the socialist bloc against the imperialist
camp in the bipolar Cold War era.”34 Following the Soviet Stalinist development
model, the Chinese government established a central planning system that emphasized “social ownership of the means of production.”35 All social resources were
controlled by the central planning authority through the nationalization process.36
“[M]arket forces played virtually no role in organizing economic activity.”37
Under the central planning system, there was the establishment of a highly
centralized pharmaceutical distribution system. The government strictly controlled drug approval, production, distribution and prices.38 It strictly controlled
every layer of the pharmaceutical distribution system from drug manufacturing,
wholesaling and retailing. State-owned drug manufacturers were responsible for
producing all the drugs. The three-tiered drug wholesale stations which were also
state-owned were responsible for drug distribution. The first-tiered drug wholesale
stations distributed drugs to hospitals at the provincial level. The second-tiered
drug wholesale stations distributed drugs to hospitals at the prefectural/municipal
level. The third-tiered drug wholesale stations distributed drugs to hospitals at
county and township levels.
Following the guideline issued by the Central Pricing Commission, the Government Pricing Bureau at different levels determined the wholesale price of drugs.39
Drug manufacturer price was the cost of drug plus a 5 per cent profit.40 The firsttiered drug wholesale stations were allowed to add a 5 per cent markup over the
drug manufacturing price. The second-tiered drug wholesale stations were allowed
to add a 5 per cent markup over the first-tiered drug wholesale price. The third34
Cheng, Joseph Yu-shek, and Franklin Wankun Zhang, “Chinese Foreign Relation Strategies
Under Mao and Deng: A Systematic and Comparative Analysis,” Kasarinlan: Philippine
Journal of Third World Studies, 14-3 (1999), 96.
35 Saich, Tony, op.cit.,28.
36 Liou, Kuotsai Tom, Managing Economic Reforms in Post-Mao China (Westport, Conn.:
Greenwood, 1998),9.
37 Tisdell, Clem, “Economic Reform and Openness in China: China’s Development Policies in
the Last 30 Years,”Economic Analysis & Policy, 39-2 (September 2009), 272.
38 Huang Yanfen, and Yiyong Yang,“Pharmaceutical Pricing in China,” in Karen Eggleston,
ed., Prescribing Cultures and Pharmaceutical Policy in the Asia-Pacific (The Walter H.
Shorenstein Asia-Pacific Research Center, 2009), 206.
39 Dong, Hengjin, Lennart Bogg, clas Rehnberg, and Vinod Diwan, “Drug Policy in China:
Pharmaceutical Distribution in Rural Areas,” Social Science & Medicine, 48-6 (March 1999),
782.
40 Zhou, Xue-rong, Zhonghuo yiliao iiage de zhengfu guanzhi yanjiu [The Study of
Government Regulating Medicine Prices in China] (China: China Social Sciences Press, 2008),
121.
The Politics of Drug Price Control Policy in China
47
tiered drug wholesale stations were allowed to add a 5 per cent markup over the
second-tiered drug wholesale price. Hospitals which were non-profit work units
after nationalization were allowed to add a 15 per cent markup over the thirdtiered wholesale price. The 15 per cent retail markup was used to compensate for
the registration and consultation fees that were set below costs to ensure the widest possible access to basic health services. Patients only needed to pay low drug
fees when they sought medical treatment at hospitals. For employees working in
state-owned enterprises (SOEs) and the collective enterprises, they were the beneficiaries of the Labour Insurance Scheme (LIS) enjoying free outpatient and inpatient services financed by fiscal appropriations. For government employees and
retirees, army veterans, university and college students, employees and retirees
in the cultural, education, health and science sectors,41 they were the beneficiaries
of the Government-funded Health Care Scheme (GHS) enjoying free medical
treatment directly financed by the state budget.42 In sum, the highly centralized
pharmaceutical distribution system was strictly controlled by the government and
“lacked competitive mechanisms.”43 Drug manufacturers, drug wholesalers and
retailers lacked economic incentives and motivation because they only followed
the government’s plan to produce, distribute and sell drugs. Drug prices were
strictly regulated and monitored by the government.
4. Drug Price Deregulation During Deng’s Era
(1978-1997)
Deng Xiaoping, who was the successor to Mao, came to power in 1978. He
linked the CCP’s legitimacy “to the capacity of the leadership to deliver the economic goods,”44 thereby making economic modernization and opening China to
the outside world central to the Party work. He denounced Mao’s egalitarianism
41
(i) Grogan, Colleen M., “Urban Economic Reform and Access to Health Care Coverage in
the People’s Republic of China,” Social Science and Medicine, 41-8 (October 1995), 10731084.
(ii) Cheung, Anthony, “Health Policy Reform,” in Linda Wong and Norman Flynn, eds., The
Market in Chinese Social Policy (Houndmills, Basingstoke, Hampshire; New York: Palgrave,
2001), 63-87.
42 Liu, Gordan G., Peter Yuen, The-wei Hu, Ling Li, Xingzhu Liu,“Urban Health Insurance
Reform: What Can We Learn from the Pilot Experiments?” in Aimin Chen, Gordon G. Liu, and
Kevin H. Zhang, eds., Urbanization and Social Welfare in China (Aldershot, Hants, England;
Burlington, VT: Ashgate, 2004), 38-62.
43 Yu, Xuan, Cheng Li, Yuhua Shi, and Min Yu, “Pharmaceutical Supply Chain in China:
Current Issues and Implications for Health System Reform,” Health Policy, 97-1 (September
2010), 10.
44 Saich, Tony, op.cit.,241.
The Journal of Contemporary China Studies, Vol. 4, No. 1
48
“as a dangerous notion that retarded economic growth”45 while embracing the
ideas of marketization and efficiency. He transformed the PRC from a planned
economy into a market economy through the implementation of economic reform.
Firstly, market mechanism was promoted for resource allocation and distribution. Secondly, economic responsibility was stressed and material incentives
were incorporated in the economic system “to stimulate people to work harder.”46
Payment was worked out “in accordance with the amount and quality of work
done.”47 Thirdly, economic efficiency was promoted by reducing bureaucratic
centralized management of the economy48 while giving greater autonomy to enterprise units “to decide what and how much to produce, and where to sell.”49
Enterprise units became responsible for their return of a profit or loss.50 Fourthly,
a “diversity of enterprise forms was to be encouraged.”51 The implementation of
economic reform greatly affected the development of the pharmaceutical distribution system and drug prices.
Under the market economy, the pharmaceutical distribution system became
more complex and competitive. The government’s decision to let market forces
determine the prices of most drugs52 led to drug retail prices having double-digit
growth from 1985-1996.53 Drug manufacturing enterprises could take many forms,
including state-owned enterprise, collective enterprises, joint venture, and sole
proprietorship. From 1980 to 1990, the number of drug manufacturing enterprises
increased from about 800 to 1,761 in the PRC.54 Imported drugs also entered the
drug market due to the opening-up policy. Since the late 1980s, drug manufacturing enterprises had recruited pharmaceutical sales representatives to promote and
sell pharmaceutical products so as to survive in this competitive pharmaceutical market.55 Pharmaceutical sales representatives were incentivized to sell more
drugs in order to meet sales targets and get more commissions. They used rebates
45 Ibid.,60.
46 Ibid.,242.
47 Tisdell, Clem,
op.cit.,276.
48 Ibid., 276.
49 Saich, Tony, op.cit.,60.
50 Hsü, Immanuel CY, The
Rise of Modern China (Sixth edition) (New York: Oxford
University Press, 2000), 850.
51 Tisdell, Clem, op.cit.,278.
52 Zhou, Xue-rong, op.cit., 133.
53 Zhao, Bin, Liang Hai-lun, Zhu Ming-jun, Wang Hu-feng, “Yaopin jizhong zhaobiao caigoujizhi zhaobiaocaigou zhuti shezhi guilu shuping ---jiyu oumeng guojia butong yiliao baozhang
zhidu shijian jingyan de zongjie,” [Centralized Drug Bidding System in China: Review Based
on the Experience of the European Union], Chinese Pharmacy, 23-12 (2012), 1087.
54 Bao Sheng-yong, Yaofei weishenme zheme gao: dangqian woguo chengshi yaopin liutong
de shehuixue fenxi [Why Are the Expenses for Drugs So High: A Sociological Analysis on the
Drug Circulation of Urban China] (China: Social Sciences Academic Press, 2008), 79.
55 Bao Sheng-yong.
The Politics of Drug Price Control Policy in China
49
– commonly known as ‘kickbacks’– to lure staff working in the Department of
Pharmacy at hospitals to purchase and doctors to prescribe their drugs.56 They
even used the ‘eat together, play together, travel together’ tactics in exchange for
purchasing and prescribing their companies’ products.57 This sped up the chaotic
situation of pharmaceutical distribution system.
Meanwhile, the rigid three-tiered drug wholesale stations were abandoned.
Drug wholesale enterprises also took many forms, including state-owned enterprise, collective enterprises and sole proprietorship. Drug distribution channels increased and drug manufacturers had freedom to choose drug wholesalers on their
own. Until the establishment of the centralized drug procurement system in 2000,
hospitals had freedom to purchase drugs from the wholesalers they liked. They
were no longer restricted to purchase drugs from wholesalers in their regions.58
They could also purchase drugs from wholesalers in other regions.59
Under the economic reform, public hospitals ran like for-profit organizations. In
the mid-1980s, the government adopted a cost recovery policy in hospital financing.60 Government subsidies decreased and “accounted for only about 10 per cent
of average public hospital revenues.”61 Hospitals had to earn the remaining 90
per cent revenues from medical services and drug prescriptions.62 Meanwhile, the
Ministry of Health gave hospitals substantial financial autonomy “to charge for
their services and to sell drugs at a profit.”63 A bonus system was also introduced
to reward “doctors based on the total monetary value of the prescriptions they
wrote.”64 This drove doctors to generate “income for hospitals by aggressively
prescribing expensive, and sometimes unnecessary, medicines and treatments.”65
According to China Health Statistics Yearbook 2008, the outpatient expenses per
56
Bao Sheng-yong, op.cit., 80.
Xinhua News Agency, “Yisheng zipu yaopin huikou anliu,” [Doctor Discloses the Story of
Kickbacks from Drugs] (April 26,2004.), at http://www.yn.xinhuanet.com/topic/2004/sshb/
wen/y11.htm (search date: April 16, 2014).
58 Bao Sheng-yong, op.cit., 83.
59 Bao Sheng-yong, op.cit., 83.
60 Pearson, Veronica, “Health and Responsibility; But Whose?,” in Linda Wong and Stewart
Macpherson, eds., Social Change and Social Policy in Contemporary China(Aldershot,
England: Avebury; Brookfield, Vermont USA: Ahgate,1995), 108.
61 The World Bank, “Fixing the Public Hospital System in China,” (2010), at http://siteresources.worldbank.org/HEALTHNUTRITIONANDPOPULATION/Resources/2816271285186535266/FixingthePublicHospitalSystem.pdf (search date: April 16, 2014).
62 The World Bank, op.cit., 23.
63 Ibid., vii.
64 Wang, Guanqun, “Hospital Management Bureau Opens in Beijing, Focusing on Public
Hospital Reform,” (July 28, 2011), at <http://news.xinhuanet.com/english2010/china/201107/28/c_131015814.htm>(search date: Accessed May 11, 2014).
65 Tian, Ying, Gu Ye, and Ni Yuanjin, “China’s Health Reform Cuts Drug Prices, But Still
Fights Pain,” (April 23, 2011), at <http://news.xinhuanet.com/english2010/china/2011-04/23/
c_13842651.htm>(search date: May 11, 2014).
57
50
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capita were about 11 Renminbi (RMB) in 1990.66 About 7.5 RMB was spent on
drugs, accounting for 68 per cent of the outpatient expenses per capita.67 The inpatient expenses per capita were about 473 RMB in 1990.68 About 261 RMB was
spent on drugs, accounting for 55 per cent of the inpatient expenses per capita.69
In 1995, the outpatient expenses per capita were about 40 RMB.70 About 26 RMB
was spent on drugs, accounting for 65 per cent of the outpatient expenses per
capita.71 The inpatient expenses per capita were about 1,668 RMB.72 About 880
RMB was spent on drugs, accounting for 53 per cent of the inpatient expenses
per capita.73 However, drug expenditures only accounted for about 8.5 per cent
of total health care expenditure in the United States and about 15 per cent in the
United Kingdom in 1993.74 It shows that the problem of ‘feeding hospitals by selling drugs’ (yi yao yang yi) in the PRC was very serious. The self-funding interests
of public hospitals weakened their social responsibilities75 while the profit-seeking
interests of doctors hurt the interests of patients.
5. Drug Price Re-regulation since 1998
The dramatic increase in drug prices due to opening up the market and drug
price deregulation led to great public dissatisfaction.76 In response to high drug
prices, the government has implemented different measures to reduce drug prices. However, the results were not noticeable. From 1998 to 2013, the National
Development and Reform Commission used price caps to reduce drug prices for
31 times.77 Unfortunately, most of the price-cut drugs which were inexpensive
66 Ministry of Health, Zhongguo weisheng tongji nianjian erlinglingba[China Health Statistics
Yearbook 2008] (China: Peking Union Medical College Press, 2008), 96.
67 Ibid.,96.
68 Ibid.,96.
69 Ibid.,96.
70 Ibid.,96.
71 Ibid.,96.
72 Ibid.,96
73 Ibid.,96
74 AARP, “AARP European Leadership Study: European Experiences with Prescription
Drug Pricing,”(2006), at <http://assets.aarp.org/www.aarp.org_/cs/gap/ldrstudy_prescdrugs.
pdf>(search date: May 7, 2014).
75 The World Bank, op.cit.,6.
76 Li, Mingzhi, and Kai Reimers,“Streamlining China’s Pharmaceutical Distribution
Channels,” in Karen Eggleston, ed., Prescribing Cultures and Pharmaceutical Policy in the
Asia-Pacific (The Walter H. Shorenstein Asia-Pacific Research Center, 2009), 184.
77 Lu Zhi-lin, “Fagaiwei shiwunianlai disanshiyidao jiangyaojialing zuori luodi,”[The National
Development and Reform Commission has Reduced Drug Prices for 31 Times ] Yang Cheng
Evening Newspaper(January 9, 2013), at http://news.sina.com.cn/o/2013-01-09/093325992361.
shtml (search date: April 16, 2014).
The Politics of Drug Price Control Policy in China
51
essential medicines quickly disappeared from the market. Drug manufacturers,
hospitals and doctors share the same interests of profit seeking. Once drug manufacturers find the price-cut drugs unprofitable to produce, they switch to produce
other drugs which can earn more profits.78 Similarly, hospitals will not purchase
price-cut drugs because prescribing these drugs will reduce the kickbacks for hospitals and doctors.79 Doctors will prescribe other expensive drugs as a substitute
for price-cut drugs.80
Since 2000, the government has centralized medicine procurement, which
requires hospitals “to place purchase orders for drugs only among the winning
bids.”81 Its main purpose “is to control [drug] price and to ensure that hospitals
use high-quality drugs.”82 In reality, however, implementing the centralized drug
procurement system fails to reduce drug prices because of four main reasons.
Firstly, drug manufacturers raise the bidding prices in order to create enough
rooms for giving kickbacks to doctors.83 Secondly, “some drug makers and sellers bribed government officials and hospital staff in order to have their products
listed in the purchase.”84 Thirdly, drug prices were “raised once they were listed
for being purchased.”85 Fourthly, drug manufacturers use kickbacks to lure doctors
to prescribe expensive drugs that are not in the centralized procurement system.86
In fact, the implementation of the centralized drug procurement system does not
necessarily guarantee that drug prices can be reduced. For example, the median
price ratio (MPR) of 14 brand-name drugs procured by public hospitals in Shanghai through the centralized drug procurement system was 5.48 times higher than
the international reference price (IRP).87 The centralized drug procurement system
malfunctions due to the collusion among drug manufacturers, drug wholesalers,
hospitals and doctors.
78
Zhou, Suo-suo, “Yaojia nianjiang ershiqici shimin mei ganjue: yi jiangjia lianjiayao jiu
shizong,” [Drug Prices Have Been Cut for 27 Times Within Seven Years, Citizens Had No
Feelings: Cost-effective Drug Disappeared after Price was Cut] Guangzhou Daily (March 8,
2011), at <http://health.zjol.com.cn/05zjhealth/system/2011/03/08/017346568.shtml> (search
date: 16 April 2014).
79 Ibid.
80 Ibid.
81 Li, Mingzhi, and Kai Reimers,op.cit.,186.
82 Ibid., 184.
83 Yu Pei-ming, li-li Song, and Shu-mei Yue, “Woguo yaopin jizhong zhaobiaocaigou cunzai
de zhidu quexian,” [The Structural Flaws of the Centralized Drug Bidding System in China],
China Journal of Pharmaceutical Economics, 4 (2010), 53.
84 Xinhua News, “China Issues New Rules to Curb Corruption in Government Drug Purchase,”
(July 15, 2010), at <http://news.xinhuanet.com/english2010/china/2010-07/15/c_111959968.
htm>(search date: 16 April 2014).
85 Ibid.
86 Yu Pei-ming, li-li Song, and Shu-mei Yue, op.cit.,53.
87 Ye, Lin, Guojia jiben yaowuzhengce yanjiu [Study on National Essential Medicine Policy in
China] (China: Fudan University Press, 2009), 51.
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6. Discussion
This study shows that the development of drug price control policy in the
PRC goes through three stages: regulation, deregulation, and re-regulation. It
is shaped by the dynamic interaction of institutions, interests, and ideas. The
highly centralized political system with the strong influence of the CCP places
Mao and his successors in an advantageous position to formulate policy without
facing any political opposition. Ideologies affect the development of both drug
price control policy and the pharmaceutical distribution system. Following
the Soviet Stalinist development model, Mao favored the ideas of mass-based
collectivism and egalitarianism, which led to the establishment of a highly
centralized pharmaceutical distribution system. The production, distribution
and pricing of drugs were strictly controlled and monitored by the government.
Drug manufacturers, drug wholesalers and retailers lacked economic incentives
and motivation because they only followed the government’s order to produce,
distribute and sell drugs. When Deng came to power in 1978, he linked the
CCP’s legitimacy to his ability to deliver the economic goods. He favored the
ideas of marketization and efficiency, which led to drug price deregulation
and the disorder of pharmaceutical distribution system. Under the economic
reform, both the drug manufacturing and distribution channels increased. The
increasingly competitive environment of the pharmaceutical distribution system
drove drug manufacturers and wholesalers to use money or different means to
build and maintain relationship with hospitals and doctors. At the same time,
the government’s withdrawal of price control on drugs and its decision to let
enterprises and hospitals become responsible for their return of a profit or loss
drove drug manufacturers, drug wholesalers, hospitals and doctors to pursue the
interests of profit-seeking. In response to the dramatic increase in drug prices, the
government in the 1990s began to re-regulate drug prices. However, the results
were not significant because of the collusion among drug manufacturers, drug
wholesalers, hospitals and doctors.
The goal of providing affordable and accessible health care for all Chinese
people is not easy to achieve. In order to achieve this goal, the government needs
to solve the problem of high drug prices first. It is important for the government
to disconnect the interests of drug manufacturers, drug wholesalers, hospitals and
doctors. To do so, drug price control policy should be implemented in coordination with other health care reforms. Since 2012, the pilot program of the zeromarkup policy for drugs has been implemented in some urban public hospitals
in Beijing, Shenzhen, Zhejiang and Anhui provinces. Under the pilot program,
The Politics of Drug Price Control Policy in China
53
public hospitals are prohibited from selling drugs at a 15-percent markup but are
allowed to increase other fees or introduce new fees to compensate for their loss
of drug revenues. For example, more than 1,500 drugs in Beijing are sold under
the zero-markup policy.88 At the same time, a medical care service fee, from 42
RMB ($6.70 US dollars) to 100 RMB, depending on the qualifications of the doctors, was introduced to public hospitals in Beijing, to replace the original 5 RMB
registration fee and 14 RMB consultation fee.89 But it is too early to tell whether
the zero-markup policy is effective in reducing drug prices. This study suggests
that the government improve the remuneration system of doctors. In 2009, a survey conducted by the Chinese Medical Doctor Association found that nearly 96
per cent of 6,000 doctors thought that “their income fail to reflect how hard they
work and their true worth”.90 Raising the salaries of doctors can curb doctors
from profiting by prescribing expensive or unnecessary drugs and in turn improve
doctor-patient relationship. This study also suggests that the government improve
the transparency and openness of centralized drug procurement system. It should
crack down on commercial bribery and root out malpractice in the pharmaceutical
industry and hospitals.
Conclusion
To conclude, the development of drug price control policy in the PRC is shaped
by the dynamic interaction of institutions, interests and ideas. The common interests of drug manufacturers, drug wholesalers, hospitals and doctors to seek profits
drive them to collude together, thereby making the drug price control policy ineffective. In order to stop collusion between these parties, the government needs to
make unremitting efforts to implement drug price control policy in coordination
with other health care reforms. This include implementing the zero-markup policy
for drugs at hospitals, improving the remuneration system of doctors, improving
the transparency and openness of centralized drug procurement system, and cracking down on commercial bribery and rooting out malpractice in the pharmaceutical industry and hospitals. It is hoped that these measures can help achieve the
goal of providing affordable health care for all the Chinese people in the long run.
88
Zhu, Ling-zhi, “Yigai yaopin lingjiachenghou bixu shixian duoying,”[The Zero-markup
Policy on Drugs Must Bring Many Benefits] Medicine & Economics Post (August 2, 2012), at
<http://news.pharmnet.com.cn/news/2012/08/02/364426.html>(search date: April 16, 2014).
89 Shan, Juan, and Qingyun Wang, “Beijing to Test Hospital Reform” Xinhua News (May 25,
2012), at <http://news.xinhuanet.com/english/china/2012-05/25/c_131609852.htm>(search
date: April 25, 2014).
90 China Daily, “Many Doctors Not Content with Pay,” China Daily (August 10, 2011), at
<http://www.china.org.cn/china/2011-08/10/content_23178097.htm>(search date: April 16,
2014).
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The Journal of Contemporary China Studies, Vol. 4, No. 1
About the Author
Sabrina Luk is Associate Professor at the Faculty of Management and Economics,
Kunming University of Science and Technology. She was awarded her PhD from
the Department of Political Science and International Studies, University of
Birmingham. Her research interests include heath care reforms, public policy analysis, e-government, public administration, institutional analysis and China studies.
Dr. Luk is the Highly Commended Award winner of the 2013 Emerald/EFMD
Outstanding Doctoral Research Awards in the Healthcare Management category.
She is the author of the monograph called “Health Insurance Reforms in Asia”
(New York: Routledge, 2014). Her articles appear in Public Administration and
Policy, Public Personnel Management, and Government Information Quarterly.
Address: Faculty of Management and Economics, Kunming University of Science
and Technology, No.68 Wenchang Road, Kunming, 650093, Kunming, China
Email: [email protected]
The“ Institutional Space” of Civil
Society in China: The Legal Framework
of Civil Society Organizations
Mei HUANG
Abstract
In order to adequately understand civil society in China, it is necessary to
examine the different types of organizations that comprise civil society and the
transformation of the legal system in which civil society organizations (CSOs)
exist in China today. This article first presents a summary of the roles and
relative positions of each type of CSO in the “institutional space” the Chinese
government has allowed as it refers to the organizational “map” of Chinese
civil society. Second, it shows how the Chinese Communist Party (CCP), with
the aim of controlling and managing CSOs, established and maintained a strict
control system from the formation of the People’s Republic of China (PRC) in
1949 until the end of the last century. Next, it further traces how the party-state,
since becoming a member of the World Trade Organization (WTO) in 2001, has
implemented systemic reforms regarding civil society in response to rapid changes
in Chinese domestic society- yet one may interpret the series of legal reforms in
recent years as a scheme for further incorporating civil society into the CCP’s
ruling system. It concludes by stressing the importance of keeping an eye on the
“institutional space” for the future development of civil society in China.
Keywords
Civil society organizations, the map of civil society, institutional space, legal
system, authoritarian system
Introduction
It was after the founding of the People’s Republic of China (PRC) in 1949,
with the goal of unifying its state and society, that the foundations were laid
for a system to manage CSOs in China. At the time, mass organizations were
considered peripheral organizations of the party-state serving a role as the sole
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The Journal of Contemporary China Studies, Vol. 4, No. 1
channel for transmitting benefits between the state and society. Thereafter, with
economic reform under way, there was gradual progress in political reform
such as administrative institutional reform and decentralization. In the midst of
such ensuing governmental and social changes, interests within society grew
increasingly diversified, and individuals began to actively form organizations.
There was a rapid increase in the number of CSOs in the 1990s with a greater
variety of activities. Thus, China had joined the so-called “associational
revolution.”1
But despite a demand for CSOs both economically and socially, because of the
strict regulations set by the Chinese Communist Party (CCP) and government for
CSOs, the “institutional space” as stipulated by law for CSOs remains limited.
At the same time, in reality, there exist numerous CSOs outside the government’s
legal system, such as grassroots NGOs, those registered as enterprises, and those
unregistered. Therefore, the “actual space” with the inclusion of these CSOs
covers a considerably larger scope than the “institutional space.”2 Despite this fact,
in order to clarify the ideals, methods and limitations of the party-state’s control
and management of its social domain, we must first focus on the institutional
space where CSOs exist and understand its current situation.
Yutaka Tsujinaka has indicated that the government imposes controls on CSOs,
arguing that the government utilizes its public power via institutions such as
legal, political and tax systems to directly regulate and control CSOs.3 Shinichi
Shigetomi, as a result of his analysis on CSOs under authoritarian systems in
Asia, has stated that an essential element is the system of control the government
imposes on society in general, in addition to the attributes of CSOs as well as
market supply and demand.4 From these perspectives, the legal system has dual
aspects: it can give the government the ability to both promote and restrain the
growth of CSOs. Shigetomi has indicated that under the authoritarian government
system, political powers are more likely to regulate the existence and activity of
CSOs.
This article presents a comprehensive overview of the institutional space within
which CSOs exist under China’s authoritarian system. First, it locates different
1 Lester M. Salamon, Partners in Public Service: Government-Nonprofit Relations in the
Modern Welfare State (Maryland: Johns Hopkins University Press, 1995).
2 Yu Keping, Zhongguo gongmin shehui de zhidu huanjing [The Institutional Environment of
Civil Society in China] (Beijing: Beijing University Press, 2006).
3 Yutaka Tsujinaka and Jae-Young Choe, “Rekishiteki keisei” [Historical Formation], in Yutaka
Tsujinaka, ed., Gendai Nihon no Shimin Shakai・Rieki Danntai [Civil Society and Interest
Groups in Contemporary Japan] (Tokyo: Bokutakusya, 2002), 255-286.
4 Shinichi Shigetomi, “Kokka to NGO” [State and NGO], in Shinichi Shigetomi, ed., Ajia no
Kokka to NGO-15 Kakoku no Hikaku Kenkyu [Asian States and NGOs: Comparative Analyses
on 15 Countries] (Tokyo: Akashi Press, 2002), 13-40.
The “Institutional Space” of Civil Society in China
57
types of CSOs and the legal background of civil society in China today. More
specifically, it summarizes the roles and relative positions of each type of CSO
in the institutional space as it refers to the organizational “map” of Chinese civil
society. Second, it shows how the CCP, with the aim of controlling and managing
CSOs, established and maintained a strict legal system from the formation of
the PRC in 1949 until the end of the last century. Third, it further traces how the
party-state, since becoming a member of the World Trade Organization (WTO)
in 2001, has implemented systemic reforms regarding civil society in response
to rapid changes in Chinese domestic society. It traces the relaxation of legal
regulations concerning CSOs made by the CCP and government in recent years
as well as the limitations of such deregulation. At the same time, it points out
how one may interpret the series of legal reforms in recent years as a scheme
for further incorporating civil society into the CCP’s ruling system. Finally, this
article concludes by stressing the importance of keeping an eye on the institutional
space for the future development of civil society in China.
1. The Classification of Chinese Civil Society
Organizations
Chinese civil society incorporates many types of groups, such as mass
organizations or people’s organizations (renmin tuanti), GONGOs (GovernmentOrganized Non-Governmental Organizations), community organizations (shequ),
rural committees (cunmin weiyuanhui), residents’ committees (jumin weiyuanhui),
grassroots NGOs whose activities are outside the legal system, international
NGOs that are active in China as supplementary to social organizations (SOs,
shehui tuanti), Non-Governmental and Non-Commercial Enterprises (NGNCEs,
minban feiqiye danwei), and foundations (jijinhui) registered with the Ministry
of Civil Affairs (MOCA). It is estimated that the total number of CSOs exceeds
11.05 million. Of these, 9.05 million are official CSOs registered as either mass
organizations or those with MOCA.
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Figure 1: The Map of Civil Society of China (2011)
Source: National Bureau of Statistics of China, “Zhongguo tongji nianjian” [China
Statistical Yearbook] (Beijing: China Statistics Press, 2012); The Editorial Committee
of China Social Organizations Yearbook, “Zhongguo shehui zuzhi nianjian” [China
Social Organizations Yearbook] (Beijing: China Social Press, 2012); Census Center of
National Bureau of Statistics, “Zhongguo jiben danwei tongji nianjian” [China Basic
Statistical Units Yearbook] (Beijing: China Statistics Press, 2012); Mass Organizations
and GONGOs’ website.
It appears that there are between 2 and 2.7 million organizations not registered
or affiliated with any of the various government bodies; such organizations
include grassroots NGOs, second-level organizations (erji tuanti) that “hang
under” (guakao) registered SOs and government organs, universities or state-run
non-commercial public service units (shiye danwei). Using these numbers as a
basis, there are 82.1 organizations per every 10,000 persons in China.5 Compared
5 The result of the figure of civil society associations per 10,000 persons = 11.05 million
(CSOs registered with MOCA) + 2 million (the lower limit of grassroots NGOs and secondlevel organizations)/ 1347.35 million (National Bureau of Statistics of China, “Zhongguo
tongji nianjian” [China Statistical Yearbook] (Beijing: China Statistics Press, 2012), 101.
The “Institutional Space” of Civil Society in China
59
to the United States and Japan,6 China’s number ranks lower than both.
Now, just what characteristics do these different types of Chinese CSOs have?
Where are they located in the grand scope of China’s political and social position?
In this section, these different types of organizations are juxtaposed in order to
understand the form and scope of civil society in China.
Social Organizations, Non-Governmental and Non-Commercial Enterprises,
and Foundations
Official CSOs registered with the Ministry of Civil Affairs are social organizations
(SOs), non-governmental and non-commercial enterprises (NGNCEs), and
foundations. At the end of 2011, these numbered more than 460,000 groups. These
three types of CSOs are given a legal status as social organization corporations.7
SOs, NGNCEs and foundations have differing definitions and roles according to
their formation type.
First, among China’s official CSOs, those studied that most attracted interest
from Chinese and overseas scholars alike are the membership organizations,
or SOs formed by citizens in order to realize a shared objective. Although SOs
were previously divided into four types – business, academic, professional and
federations organizations, from 2007, MOCA introduced a new classification
method, dividing SOs into 14 types: science, technology and research, ecology
and environment, education, social services, culture, sports, law, commercial and
industrial services, religion, agricultural and rural areas development, professional,
international and overseas organizations, and others. Up until 2011, there were
254,969 SOs active nationwide.8
CSOs that perform public services are classified as NGNCEs. Their activity
areas are the same as SOs and are divided into 14 classification types. Previously,
NGNCEs activities were regulated by their professional supervisory agency
or sponsor organization (yewu zhuguan danwe). From 1996, NGNCEs were
incorporated as CSOs under the authority of MOCA and local bureaus. While
public institutions (shiye danwei) were once the major organizations provider
of public services, with the implementation of the “Provisional Regulations
on the Registration and Management of Non-Governmental, Non-Commercial
Enterprises” in 1998, NGNCEs became another type of organization responsible
6 According to statistics of the United States (1990-1994) and Japan (1996-1997), there are
872.6 and 223.7 organizations per every 10,000 persons, respectively. Yutaka Tsujinaka, ed.,
op.cit.. 237-238.
7 According to “The General Principles of the Civil Law of the Peoples Republic of China”
(1986), legal entities were divided into four categories: enterprise, government organ, public
institution and social organization. SOs,NGNCEs,foundations and mass organizations fall under the “social organization” classification.
8 China Social Organizations Yearbook (Beijing: China Social Press, 2012), 482.
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for public services. Today, NGNCEs provide a variety of social services, such as
education organizations, health and hygiene facilities, welfare facilities, culture,
sports and science facilities, and social consulting facilities. They exist as the
kindergarten, the private school, the clinic, the nursing home, sports club, the
employment agency and more. According to statistics in 2011, almost 204,388
NGNCEs registered with MOCA and its local bureaus.9
Previously, foundations belonged to the non-profit legal entity for the
purpose of engaging in public undertakings through grants and donations. These
foundations were regulated by registration with MOCA after an investigation
by the People’s Bank of China, or via permission granted by their professional
supervisory agency. But since 1999, legal reforms have been taking place that
leave foundations’ registration and regulation under the uniform authority of
MOCA. The number of foundations totaled 2,614 in 2011.10
Mass Organizations and GONGOs
After the founding of the PRC, mass organizations were designated by the CCP
to serve as organizations comprising the “transmission belt” between the state and
society. Mass organizations include the eight peak organizations: the Communist
Youth League of China (CYLC, Zhongguo gongcan zhuyi qingniantuan), AllChina Federation of Trade Unions (ACFTU, Zhonghua quanguo zonggonghui),
All-China Women’s Federation (ACWF, Zhonghua quanguo funvlianhehui),
All-China Youth Federation (ACYF, Zhonghua quanguo qinglian lianhehui),
All-China Federation of Industry and Commerce (ACFIC, Zhonghua quanguo
gongshangye lianhehui), China Association for Science and Technology (CAST,
Zhongguo kexue jishu xiehui), All-China Federation of Returned Overseas
Chinese (ACFROC, Zhonghua quanguo guiguo huaqiao lianhehui), and AllChina Federation of Taiwan Compatriots (ACFTC, Zhonghua quanguo Taiwan
tongbao lianhehui).
The mass organizations have had a “dual function” where on the one hand,
they have a means of “absorbing” benefits and demands arising from society,
functioning as a “tool” for motivating the people to establish socialism. At the
same time, mass organizations have been a proven route for communicating
and implementing the government’s policies within general society. Alternately,
the CCP has granted mass organizations a unique political position; mass
organizations have a representative seat in the Chinese People’s Political Consultative Conference (CPPCC) and are incorporated in the “bianzhi” system11 at
9
Social Organizations Yearbook, op.cit., 501.
Ibid., 494.
Bianzhi is a list of the authorized number of personnel, as well as their duties and functions
in government administrative organs, the state-run non-commercial public service institutions.
10
11
The “Institutional Space” of Civil Society in China
61
the county level and above. Mass organizations use political resources and have
constructed a broad organizational network all over the country, reaching 6.79
million in number in 2011.12
In addition to mass organizations, with the administration of the authorized
State Council department, there exist social organizations, which are exempt from
registration with MOCA. Although these types of organizations are not granted the
same unique political position as mass organizations, most have been established
under the chief guidance of the government and absorb the treatment of bianzhi.
Therefore they maintain a close relationship with the government in personnel,
financial, organizational management positions and in other aspects, fulfilling their
role to support the government’s activities. As of the end of 2011, over 770,000
organization members and local-level organizations were maintained nationwide
as registration-exempt social organizations.13
Groups such as the China Family Planning Association (CFPA, zhongguo jihua
shengyu xiehui), Self-Employed Private-Enterprise Association (SEFEA, geti
siying qiyejia xiehui), China Consumers’ Association (CCA, zhongguo xiaofeize
xiehui) and All-China Sports Federation (ACSF, zhonghua quanguo tiyu zonghui)
etc., as with MOCA-registered SOs, are allowed the appointment of retired
government officials to positions of responsibility in their organizations. In return,
The bianzhi system covers those employed in these organizations.
12 Source from mass organizations’ homepages and official media sites: CYLC: 3,590,000
groups (2013) http://news.xinhuanet.com/ziliao/2004-11/15/content_2220559.htm; ACFTU:
2,320,000 groups (2011) http://stats.acftu.org/template/10002/index.jsp; ACWF: 833,000
groups (2008): http://news.xinhuanet.com/newscenter/2008-09/24/content_10103660.
htm; ACYF: 55 groups (2012): http://www.qinglian.org/YouthFederation/QinglianInfo/
qinglianInfo_0.html; ACFIC: 47,203 groups (2011): http://www.acfic.Orgcn/Web/
c_000000010003000100030003/d_11989.htm; CAST: 174,914 groups (2011); http://www.
cast.org.cn/n35081/n35488/14019330.html; ACFROC: 14,000 groups (2006); http://news.
Xinhuanet.com/politics/2006-09/18/content_5105678.htm; ACFTC: 30 groups (2012); http://
www.tailian.org.cn/n1080/n1190/index.html (searched date: July 19, 2013).
13 According to “Notice from Ministry of Civil Affairs on certain social organizations exempted from the registration of social associations” in 2000, the following 25 SOs are exempt
from registering with MOCA: China Federation of Literary and Art Circles, Chinese Writers
Association, All-China Journalists’ Association, Chinese People’s Association for Friendship
with Foreign Countries, Chinese People’s Institute of Foreign Affairs, China Council for
the Promotion of International Trade, China Disabled Persons’ Federation, China Soong
Ching Ling Foundation, China Law Society, Red Cross Society of China, Chinese Society of
Ideological and Political Work, Western Returned Scholars Association, Alumni Association
of the Huangpu Military Academy, National Association of Vocational Education of China and
11 sub-associations and the provincial level associations of the China Federation of Literature
and Art (China Theatre Association, China Film Association, Chinese Musicians’ Association,
Chinese Artists Association, Chinese Ballad Singers Association, Chinese Dancers Association,
China Society for the Study of Folk Literature and Art, China Photographers Association,
Chinese Calligraphers Association, Chinese Acrobats Association, Chinese Television Artists
Association (searched date:July 19, 2013).
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the government provides these SOs with financial support and transfers one part
of authority to them. CFPA authorized to one part of administrative, and its staff
covered by the bianzhi system. Therefore, CFPA operates in compliance with the
family planning campaigns.14
Community
The 1980s saw the beginning of community (shequ) construction with the collapse
of the “work unit” (danwei). Based on official statistics, there were 160,352
nationwide in 2011.15 However, the concept of “community” in China differs from
the meaning in the west, which is an aspect of distal-government.
During its planned economy period, danwei offered “cradle-to-grave welfare
provision,” which extended from childcare, school, clinics and the like to
security administrative for state-owned enterprise (SOE) employment. Since
the late 1980s, with the economic reforms many SOEs have had to go into
bankruptcy, unable to sustain social welfare. Instead of danwei, CCP and the
government started to realize the importance of community construction to
China’s social stability and development.16 In 1986, MOCA first debated the
issue of “community construction” in the urban community, hopeful that it would
become a main provider of public services, offer protection for vulnerable groups
and help maintain security. At the same time, CCP and the government are also
proceeding with efforts to exercise control at the community level through party
building. Generally speaking, under the CCP and government-designed slogan of
“community construction,” community is both the provider of public services and
a “tool” for controlling a distal society.
Village Committees and Residential Committees
The Constitution of 1982 stipulated, “residents’ committees and villagers’ committees established among urban and rural residents…are mass organizations of
self-management at the grassroots level.”
The “Organic Law of the Villagers Committee of the People’s Republic of China” (zhonghua renmin gongheguo cunmin weiyuanhui zuzhifa) was promulgated
14 He Jianyu and Wang Shaoguang, “Zhongguo si de shetuan geming: dui shetuan quanjingtu
de dingliang muaoshu” [China’s Association Revolution: A Quantitative Description of the
Association Panorama], in Gao Bingzhong and Yuan Ruijun, eds., Zhongguo gongming shehui fazhan lanpishu [Bluebook on Civil Society Development in China] (Beijing: Beijing
University Press, 2008), 133-163.
15 China Statistical Yearbook, op.cit., 863.
16 Guo Dingping, “Shanhaishi no shaku kensetsu to toshi kisoshakai nokannri taisei kaikaku” [Administrative Reform of Rural Communities and Urban Resident Communities
of Shanghai], Ajia Keizai [Asian Economic Affairs] (Sep 2003), 21-44; Qiusha Ma, NonGovernmental Organizations in Contemporary China: Paving the Way to a Civil Society? (New
York: Routledge, 2006), 58-61.
The “Institutional Space” of Civil Society in China
63
in June 1988, with a revision adopted in October 2010. The Law clearly stated that
villagers’ committees were granted supervisory functions over elections, administrative decisions and village affairs. In actuality however, interference by the CCP
at the village level does exist, and it is difficult for village committees to fulfill
their roles as autonomous village-citizen organizations.
Meanwhile, the “Organic Law of the Urban Residents Committees of the People’s　Republic of China” (zhonghua renmin gongheguo chenshi jumin weiyuan
hui zuzhifa) was established in January 1990. Therein, residential committees
were designated as “mass autonomous organizations” at a distal society. It is stipulated that they receive guidance from the government, and that they support government activities. Further, it explicitly states that residential committees are to receive government funding for residential committees’ business activities, and that
residential committees’ administrative offices are to receive government loans.
Since the move toward a market economy, urban areas have become more fluid
and complex, and dynamic changes have occurred. In the midst of such changes,
the residential committees have been used as government “spokespersons,” and as
instruments for maintaining stability at this distal level of Chinese society.
In recent years, however, in a portion of community, there have appeared
residential committees that lack the “proxy”-serving function from which residents benefit, while some other bottom-up CSOs have sprung up, established by
residents themselves. At the distal level of political society, a wide assortment of
CSOs exist in tandem, which has resulted in conflict between the state and society.
Grassroots NGOs
Numerous CSOs exist that are active as grassroots NGOs, and which do
not meet the registration standards set under the strict legal system. These
organizations are either registered as enterprises with the industrial-commercial
administration bureau, or are still unregistered. Some grassroots NGOs, unable
to register with MOCA as the legal entity of social organization, “hang under”
registered SOs as second-level organizations. Clan organizations, public-service
organizations in rural districts, independent organizations within communities
in urban districts, underground religious organizations, and some international
NGOs qualify as grassroots NGOs not able to register with MOCA. According to
a report released by Jia Xijing, the scale of grassroots NGOs was between 2 and 2.7
million organizations in 2005.17
Grassroots NGOs are developing their activities in a variety of fields, including environmental protection, anti-poverty, gender, and support of socially
17
Jia Xijin, Di sanci gaige-zhongguo feiyingli bumen zhangyue yanjiu [The Third Reform:
Strategic Management of the Non-Profit Sector in China] (Beijing: Tsinghua University Press,
2005), 9.
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vulnerable groups. Although grassroots NGOs are active outside of the CCP and
the governmental legal system, they are linked with a rise in social awareness of
associations in China’s “distal” society, and are working in areas not reached by
the CCP and government. Thus they are fulfilling important roles in narrowing
social stratification, with an ever-growing presence as an undertaker of social
movements. Since grassroots NGOs have autonomy from the government,
scholars have indicated them as the organizational type most closely resembling
CSOs of the concept of UN.
2. The Legal System for Civil Society Organizations:
From the Founding of the PRC to WTO
The legal system, providing an indispensable environment for CSOs’ survival, is
a critical element for the regulation and development of these organizations. What
follows below is an overview of how the party-state’s orientation toward CSOs
has changed along with its transforming legal system over time.
The First Period: 1949-1978
After the PRC was established in 1949, the party-state implemented organizational
rearrangements and readjustments according to its communist values, which
would affect SOs. Some political and secret organizations that did not support
the party-state’s values were banned as “reactionary organizations.” Those with
obvious political tendencies were defined as democratic parties.18 Some other
organizations representing the interests of the workforce, women, youth, students
and other social strata were re-organized as mass organizations.19
After the campaign to clean up and reorganize SOs (qingli zhengdun), the
central government published its “Provisional Measures on Social Group
Registration” (shehui tuanti dengji zanxing banfa) in September 1950, thereby
moving forward with its legal infrastructure concerning the formation of social
organizations. The Provisional Regulations (1950) established registration
regulations for SOs by type and by administrative organ; they also presented a
Democratic parties are the Revolutionary Committee of the Chinese Kuomintang, the China Democratic League, the Chinese Peasants and Workers Democratic
Party, the Jiu San Society, the China Zhi Gong Party, the China Association for Promoting
Democracy, the China Democratic National Construction Association, and the Taiwan
Democratic Self-Government League. All of them were founded before the founding of PRC.
19 Wang Ying, Zhe Xiaoye and Sun Bingyao, Shehui zhongjian ceng: gaige yu zhongguo de
shetuan zuzhi [The Intermediary Level of Chinese Society: Reform and China’s Associational
Organizations] (Beijing: Chinese Development Publishing Press, 1993).
18
The “Institutional Space” of Civil Society in China
65
specific list of organizations that would be exempt from registration procedures.
Registered SOs included six types: mass organizations engaged in social activities,
organizations for public services, art and literature organizations, academic
research organizations, religious organizations and others recognized by law. At
the same time, the Provisional Regulations (1950) introduced the level-to-level
administrations system still in place today.20
Due to the rearrangement and reorganization of SOs and the implementation of
a registration system, SOs independent from the party-state largely disappeared
from Chinese society. China progressed with making state and society a uniform
entity under the totalitarianism political regime. The CCP warranted control over
local societies via the “work unit” (danwei) system and “people’s communes”
(renmin gongshe). From 1966 to 1976, the Great Cultural Revolution took
precedence and work related to the administration of SOs came to a standstill.
The Second Period: 1978-1989
In December 1978, the Third Plenum of the Eleventh CCP implemented the
“Reforms and Opening up” (gaige kaifang) policy. Economic modernization
was made central to party-state work. In the process of maketization, many
SOs were formed during this period at national and provincial levels, and SOs’
administrative management authority rested under the governmental agencies. But,
with the administrative reform, most SOs became one type of quasi-government
agency (er zhengfu) that allowed the appointment of retired staff and accepted
financial support. At the same time, some became instruments for gaining money
for the affiliated administrative agency. As a result, in 1988 MOCA assumed all
administrative authority of SOs.
After the Tiananmen Incident of 1989, the government published the
“Regulations on the Registration and Management of Social Organizations”
(shehui tuanti dengji guanli tiaoli). The regulations introduced and systematized
the principles of a “dual management mechanism” (shuangcong guanli) and “anticompetition,” meant to help regulate organization-formation activities in the wake
of the second Tiananmen Incident.
In the Regulations on Registration (1989), the dual management mechanism
refers to the management of SOs by two governmental agencies, registration and
management, and ‘professional supervisory’ agencies. Firstly, SOs must obtain
permission from a professional supervisory agency before being established and
then are managed day to day by a professional supervisory agency and MOCA or
its local bureaus.
20
The level-to-level administration principle means that one social organization shall register with and be administrated by different administrative levels according to the scope of its
activities.
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The anti-competition principle advocates the prohibition of establishing SOs
that are similar or of the same business scope at the same administrative level
(national, provincial, or county) in order to prevent the ‘inefficient’ duplication of
activities. By limiting the number of SOs by sector or region, the CCP initiated a
system of interest representation to be known as “state corporatism.”21
Yet at the same time, with the General Principles of the Civil Law of the PRC
(1986), the Chinese government introduced a system of legal entity to initiate the
for-profit sector and non-profit ones. Government organs, public institutions and
SOs formed a category of non-commercial organizations providing public goods.
The Third Period: 1989-2000
From the 1990s, the CCP and government developed a legal infrastructure
designed to normalize and regulate existing SOs as well as the registration
of newly emerging CSOs. In 1998, the “Regulations on the Registration and
Management of Social Organizations” were revised, which provided detailed
stipulations concerning the definition of SOs, their character, establishment
conditions, and penalties for illegal organizations. In addition to the principles of
dual management mechanism and anti-competition were provisions regarding SO
member numbers,22 lawful assets and sources of funding,23 full-time staff,24 and so
on.
Further, Regulations (1998) included details for those SOs exempt from
registration with MOCA.25 Through this revision, each type of SO for which
classification had until then been unclear was given a name, such as SO, mass
organization or GONON.
In addition to those for SOs, in 1998, the central government also published
21
Schmitter has devised a definition of state corporatism: “Corporatism can be defined as a
system of interest representation in which the constituent units are organized into a limited
number of singular, compulsory, non-competitive, hierarchically ordered and functionally differentiated categories, recognized or licensed (if not created) by the state and granted a deliberate representational monopoly within their respective categories in exchange for observing certain controls on their selection of leaders and articulation of demands and supports.” (Philippe
C. Schmitter, “Still the Century of Corporatism?” in Fredrick B. Pike and Thomas Stritch,
eds., The New Corporatism: Social-Political Structures in the Iberian World (Notre Dame,
IN: University of Notre Dame Press, 1974), 93-94). Following the definition, many scholars
quoted the system of interest representation after the reform era of China.
22 Possession of more than 50 individual members or 30 unit members; a total of more than 50
members are required.
23 Possession of lawful assets and sources of funding: a national social organization shall have
a business fund of more than CNY 100,000, while a local social organization and a trans-administrative-district social organization shall have a business fund of more than CNY 30,000.
24 Possession of full-time staff for the organization’s business.
25 Those exempt from registering with MOCA were as follows. Namely, mass organizations,
SOs exempted from registration according to the State Council’s permission, second-level organizations “hanging under” registered SOs, enterprises, public service units, etc.
The “Institutional Space” of Civil Society in China
67
“Provisional Regulations on the Registration and Management of NonGovernmental, Non-Commercial Enterprises” (minban feiqiye danwei dengji
guanli zanxing tiaoli), which provided details for registration and management
activities. According to Provisional Regulations (1998), like SOs, NGNCEs must
organize by the approval of a professional supervisory agency, 26 and then are
obligated to register with MOCA and local bureaus. They, too, must follow the
principles of dual management mechanism and anti-competition.
To foster educational NGNCEs, the central government promulgated “The
Regulations on the Implementation of the Non-State Education Promotion Law
of the People’s Republic of China” (zhonghua renmin gongheguo minban jiaoyu
cunjinfa) in 2002. Also those NGNCEs pursuing education-related issues would
be entitled to tax deductions or exemption.
As for foundations-related regulations, after implementation of the “Regulations
on Foundations” (jijinhui guanli banfa) in 1988, the current “Regulations on
the Management of Foundations” (jijinhui guanli tiaoli) were instituted. The
Regulations (2004) details are specific regarding the definition of foundations,27
their character, classification, activities, tax incentives policies, and foundations’
internal governance. Like SOs and NGNCEs, foundations, too, are subjected to
the dual management mechanism policy. For other foundations, the Regulations
(2004) even stipulate an amount for the original funds.28
3. Deregulation and Its Limitations: New
Developments since Joining WTO
Since 2000, the CCP has been leaning toward a reform of its control system
concerning CSOs. The reality is that to stay in power the CCP has to serve more
pluralized interests in terms of policy-making within its own political system.
More particularly, the CCP regime has been forced to change from an “omnipotent
government”29 (quan neng zheng fu) to a “service-oriented government” in the
26
As professionalism is higher in NGNCEs than in SOs, their professional supervisory agency
tends to take the form of a specialist government organization overseeing various sectors,
including education, culture and literature, science and technology, physical education, labor,
political administration, law and legal affairs, etc.
27 Foundations are divided into public foundations (gongmu jijing) and private foundations (fei
gongmu jijin). Public foundations refer to foundations that can fundraise from the general public, as opposed to the latter ones which cannot.
28 The original funds of national public fundraising foundations should be no less than CNY 8
million; the original funds of local public fundraising foundations should be no less than CNY
4 million; the original funds of non-public fundraising foundations should be no less than CNY
2 million.
29 Omnipotent government means a government that as a decision-maker, investor, regulator
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midst of rapid social changes within China as well as China’s entry into WTO. In
the social domain, the increasing public and philanthropic awareness of citizens
has triggered the rise of a “new public movement,” the prime example of which
is a campaign against the construction of a PX factory in Xiamen.30 Furthermore,
such awareness has also given rise to the more active philanthropic movement
known as “micro public welfare” (weigongyi). 31 Accordingly, the “actual
space” of civil society has been spreading more widely than ever. Under these
circumstances, it is inevitable that the party-state must amend its policy that favors
pure, strict control as it can no longer cope with the reality of the tremendously
changing society around it.
CCP Government’s Policy
How can the party-state incorporate basic social interests into its own political
system? CCP and the central government policy aim to foster CSOs in three
aspects: tax reform, participation in policy-making, and financial support. Firstly,
CCP and the government reformed the tax law regarding public activities. For
the purpose of encouraging the donation to and promotion of the development of
public welfare undertakings, in 1999 the “Law of the People’s Republic of China
on Donations for Public Welfare” (gongyi shiye juanzeng fa) was enforced. Based
on this law, any enterprise or individual person that donates property for public
welfare should enjoy preferential treatment in income tax levied on enterprises
or individual income tax. After that, in 2008, the “Individual Income Tax Law of
the People’s Republic of China” (geren suodeshui fa) was amended so that the
part of income donated to education and other public welfare undertakings would
be deducted from the amount of taxable income. Here it can be gathered that
CCP and the government are making efforts through this reform to absorb private
capital and resources in order to nourish their public welfare undertakings.
In the 16th Central Congress of CCP of 2004, it was proposed that “social construction and control be strengthened, and that innovations of the social control
system shall be pursued.” In the 17th National Congress of CCP of 2007, it was
stated clearly, “As for social control, such is under the guidance of the Party and
local committees, led by the government, in concert with society, and with the
participation of the people; this comprises the social control mechanism.” Further,
and supervisor is attentive to almost all of the political, economic and social areas.
30 In December 2007, the local government reportedly stopped the construction of a paraxylene (PX) petrochemical plant due to public pressure in Xiamen, Fujian Province.
31 “Micropublic welfare” (weigongyi) uses the Chinese version of “Twitter” called Weibo
to call for public-welfare movements, and constitutes novel types of public welfare movements wherein cause-contribution funds are solicited and volunteer activities are performed. A
representative example is the “Free Lunch Plan” for children promoted in the rural region of
Guizhou Province by Liang Shuxin.
The “Institutional Space” of Civil Society in China
69
within the “Working　Rules of the State Council”(guowuyuan gongzuo guize)
promulgated by the central government in March 2008, it is explicitly stated that
administrative decisions are to be made on the basis of scientific, democratic procedures, and that, “when determining and implementing administrative policies
related to the public interests, a public-hearings system will be employed, and
opinions from society will be collected, and, before the State Council makes an
important administrative-policy decision, via a variety of formalities, the opinions
of the various democratic parties,32 social organizations, specialists, and citizens in
general shall be collected.” Further, in 2012, a revised version of the “Civil Procedure Law of the People’s Republic of China” (minshi susong fa) was adopted. The
revised Law introduced public-interest litigation for the first time, and CSOs were
recognized as participants in public-interest cases.
The central government also provides financial support for CSOs. In 2012, the
government invested CNY two hundred million of the central budget chiefly in
public services for off-farm workers (nong min gong), left-behind children, aged
persons, and projects for the education and training of CSO staff working in western areas, which had never been done before.33 Also, Shanghai, Nanjing and other
local governments are proceeding with the government purchase of public service
in their contracting system. CSOs are now engaging in some public services to
obtain government subsidies.
Additionally, within central and local governments, an evaluation system
for CSOs has been introduced, with the aim of finer differentiation of CSOs. In
2011, MOCA published the “Social Organizations Administrative Evaluation
Methods,”(shehui zuzhi guangli pingjia fangfa) which introduced a new evaluation system (comprising comprehensive considerations of CSOs’ internal
governance and activities) to be based on standard guidelines for CSOs that had
been registered with MOCA for two years or more. CSOs participating in the
evaluation activities were to be divided into five rankings, from 1A to 5A; CSOs
ranked 3A or higher were given priority for receiving government purchases of
public service contracts. Those foundations and public welfare-type SOs could
apply for tax incentives.
32
Apart from the CCP (the ruling party), there are eight democratic parties in China.All of
them were founded before the PRC. Multi-party cooperation and political consultation under
the leadership of the CCP forms the basic political system in China. Cooperative relations
between the CCP and democratic parties are based on the principle of “long-term coexistence
and mutual supervision, treating each other with full sincerity and sharing weal or woe.”
Democratic parties participate in the discussion and administration of state affairs under the
organizational form of the CPPCC.
33 Ministry of Finance of the People’s Republic of China, Detailed Rules on the Project of
Providing Central Budget Support for Social Organizations to Participate in Public Service
(2012).
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Developments at the Local Level
Even as the CCP and central government were creating a framework of legal
revisions, local governments were also performing concrete reforms in their legal
systems. Especially noteworthy is the steady progress being made at the local
level in terms of trial reforms of the two basic principles previously stipulated for
the establishment of CSOs, namely the dual management mechanism and anticompetition principle.
Regarding reforms of the dual management mechanism, Shenzhen led the
nation in launching its reforms. From 2004, beginning with reforms for the
autonomy of business organizations, Shenzhen has continued to move forward on
reforms of the CSO registration system. In 2008, three types of SOs – business
organizations, social welfare organizations and public philanthropic organizations
– became eligible for direct registration with local civil affairs bureaus.
Meanwhile, since 2008, Beijing has been making exploratory efforts towards the
introduction of “central-style supervision” (zhongshu guanli) as a substidtute for
the dual management mechanism.34
In regard to the systematic principle of anti-competition, business organizations
have been the chief target of reforms. Since 2008 in Shanghai, to move forward
with the reform and development of business organizations, promotion has
started for establishing multiple organizations engaged in the same business or
industry within a single administrative district, as well as of establishing business
organizations in differing administrative districts. In October 2009, Guangdong
Province, too, published “Provisional Measures on the Registration of Business
Organizations in Different Districts,” which authorized registration within
Guangdong Province of regional and city-level business organizations that had
already registered in another province.
In addition, at the local level, for SOs that do not meet the criteria for
establishment, certain regions have introduced a “Document Filing System” (bei
an zhi). As early as 2005, MOCA had made mention of such exemption schemes
in its “Notification on the development of Philanthropic Social Organizations.”
34 “Central-style supervision” is the administration of SOs by mass organizations or
GONGOs,in lieu of a professional supervisory agency. Until December 2012,Beijing
Federation of Trade Unions,China Communist Youth League Beijing Committee,Beijing
Women’s Federation,Beijing Association for Science and Technology,Beijing Disabled
Persons’ Federation,Beijing Returned Overseas Chinese Federation,Red Cross Society of
China Beijing Branch,Beijing Law Society,Beijing Lawyers Association,China Association for
Non-Government Education Beijing Branch,Beijing Federation of Industry and Commerce,
China Council for the Promotion of International Trade Beijing Sub-council etc.,22 mass organizations and GONGOs have received the certification by Beijing Civil Affairs Bureau as
the administrative agency of SOs,NGNCEs and foundations.
The “Institutional Space” of Civil Society in China
71
Thereafter, in 2007, MOCA designated Jiangxi province, Beijing, Shengzhen,
Hubei province and Jiangsu province as pilot test regions, implementing the
promotion of such social organizations.
The central government, upon consideration of the experiences of local
governments, published “Notifications on the Establishment of Areas for
Observing Reforms and Innovations of Social Organizations” in 2008, 35
which was to be linked with future CSO-related legal reforms, and designated
“observation regions” including Shanghai, Shenzheng, Guangdong province,
Yunnan province, Qingdao and the Xinjiang-Uygur Autonomous region. Here,
various reform scopes were designated for observation: Shanghai and Shenzhen
were comprehensive observation regions, Guangdong province was a business
organization observation region, Yunnan province was an international NGO
observation region, Qingdao was a local-level SO observation region, and the
Xinjiang-Uygur Autonomous Region was a business organization registration
observation region. For each observation region, the central government
granted administrative discretionary powers regarding the performance of SOs’
administrative reforms and innovations.36
Nevertheless, it is necessary to note the fact that the series of relaxation policies
described above are all carried out within the scope permitted by the CCP and
government. It is thought that local governments will, to maintain the stability of
distal politics and society, try to incorporate ever more CSOs into the system, and
spur on reforms of administrative systems.
Conclusion
This paper has provided an overview of the legal system for civil society
organizations as well as recent developments toward legal reforms in China.
35
Policy adjustments and trials between the central government and local governments were
performed previously through designated “pilot test regions.” In other words, the local government carried out reform-related orientations and policies established by the central government. This time, in the midst of CSO system reform, a new method of designating “observation
regions” was introduced. Concretely, in response to the actual state of economic and social
affairs within each region, local governments would create an autonomous plan for reform and
implement the policies while the central government observed, following and evaluating the
results of those policy implementations.
36 For example, eight areas of Guangdong province (including Guangzhou, Zhongshan,
Zhaoqing, etc.), divide specific tasks into sectors such as registration control of overseas organizations, evaluation of social organizations, farming village specialist economic associations,
etc., and proceed with reforms for each area. Such policies are seen as attempts to seek reform
and innovation schemes that meet the actual socioeconomic realities of each district in tandem
with the reforms the central government has imposed at local levels.
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Under its authoritarian system, the CCP regime has put in place uniformly strict
laws and regulations for CSOs. As a result, the party-state has and continues
to successfully incorporate CSOs into its own ruling system by regulating and
limiting the number of CSOs through its governing units.
At the same time, the party-state’s ability to govern has been challenged as
well. Since the turn of the century, a series of economic and social changes have
occurred in China such as the deepening of the market economy, technological
innovations, the diversification of information media and resources, and the
acceleration of globalization. The CCP now stands at a crossroads: should it
continue to take more CSOs under its direct control or should it allow those CSOs
to be more autonomous?
Upon closer inspection, it seems that the recent series of reforms have been
driven by the deregulation of the legal-system and market principles, which would
further indicate the CCP’s move to selectively place more CSOs under its direct
control. Deciding to go forth with reforms, the central government has passed
tax reforms, given financial support, and even promoted CSO-related system
reforms within local areas. Although there have been certain positive results from
these reforms, they have been limited to organizations within sectors fostered
by the government such as business organizations, charitable organizations and
community service organizations, among others. By classifying CSOs, the CCP
and government can selectively offer financial assistance and implement the
deregulation of those chosen. The introduction of the evaluation system, as it
has been used by the CCP toward competitive mechanisms based on a market
economy framework, has served to further differentiate CSOs.
The expansion of the institutional space for these CSOs in China must continue
to be examined. Changes in the way the party-state controls and administers its
social sphere, and the path these different types of CSOs themselves follow as
they grow are of marked importance for the future of civil society in China.
About the Author
Mei HUANG is a research associate at the Faculty of Humanities and Social
Sciences, University of Tsukuba. She is also a part-time lecturer at Yokohama
City University. She received her Ph.D. in political science from the University of
Tsukuba in 2011. She has been analyzing survey data on civil society in China as
a member of the Grant-in-Aid for Scientific Research (S) project, “A Comparative
and Empirical Study of the Structural Changes in Politics and Transformations in
Pressure Groups, Policy Networks, and Civil Society in Japan since 2009” (Group
Leader: Tsujinaka Yutaka, Professor, University of Tsukuba, Graduate School of
The “Institutional Space” of Civil Society in China
73
Humanities and Social Sciences). Her research interests include interest group
politics, civil society and local governance in China. Her recent publications
include “Institutions” in Tsujinaka Yutaka, Li Jingpeng, and Kojima Kazuko, eds.,
Civil Society and Interest Groups in Contemporary China (Tokyo: Bokutakusha,
2014), 85-109, “The Relationship between Social Organizations, the CCP, and
the Government: Social Organizations’ Shrewd Strategy against the Party-State’s
‘Embedded Regulation,’” Ibid., 143-161, “The Activities of Social Organizations
in the Political Process of China,” Ibid., 181-198, and “Non-Governmental and
Non-Commercial Enterprises: Based on the Survey of Chinese Civil Society
Organizations (2009-2011),” Ibid., 199-216.
Address: Faculty of Humanities and Social Sciences, University of Tsukuba, 1-1-1
Tennodai, Tsukuba, Ibaraki 305-8577, Japan
Email: [email protected]
China and its Neighbors:
Trade Leverage, Interdependence and
Conflict
Nabeel A MANCHERI
Abstract
Economically, China, ASEAN and other countries in the region are highly
integrated. From an economic perspective, this is reflected in the rapid increase
in trade and investment flows. As China grows fast and trade relations with its
neighbours increase rapidly, the phenomenon may lead to a situation where China
uses its trade strength against its partners as a political tool. Similarly, some of
its trade partners may possess certain soft power against China by using trade
as a potential leverage. This can be defined in terms of import strength or export
strength of a particular country and its dependence on China. This paper tries
to analyse how the import and export dependence among East Asian countries
work as a potential leverage that is utilized for political gains and national power
projections. It also tests whether trade dependence can avert military conflicts in
East Asia or not.
Keywords
trade dependence, East Asian conflict, economic leverage
China, Association of Southeast Asian Nations (ASEAN) and other countries in
the region hold a unique status among the comity of nations as the most dynamic
economies of the world though their development paths have been different. These
countries are highly integrated economically. From an economic perspective, this
is reflected in the rapid increase in the degree of integration through international
trade and investment flows. China is the largest economy in the region, also the
largest exporter and largest trading nation, followed by Japan, South Korea and
India. Trade constitutes almost 50 per cent of the Gross Domestic Product (GDP)
of all countries in the region barring the least developed countries from South
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Asia and ASEAN. This increased trade-GDP ratio has led to greater economic
interdependence among East Asian countries while their political relations have
been quite naïve in recent past.
The security dilemma and the emerging balance of power in the East Asian
Region can be analyzed by comparing economic strength of each state. The main
argument in this paper is developed to test whether trade dependence can prevent
military conflicts from escalation in East Asia or not. The present study tries
to analyse how the import and export dependence among East Asian countries
work as a potential leverage that is utilsed for political gains and national power
projections. East Asia is stuck in a number of territorial disputes and there is
possibility of miscalculations and military conflicts in the future.1 The East China
Sea disputes among China, Japan and Korea or the South China Sea disputes
among China and ASEAN members or the long and unsettled border problems
between India and China are the major concerns to the peace and stability in East
Asia.
China’s assertiveness in East Asia by various means including economic
coercion represents a security threat to other nations, who have contested claims
in the region. China’s status can be interpreted as that of a regional power who’s
military and economic capabilities far outstrip those of other states. China’s
economic interests in the region are especially intermingled with China’s grand
strategy. According to Goodman P. M of Center for Strategic and Internatoinal
Studies (CSIS), economics and diplomacy are two sides of a same coin. One
side represents diplomacy to promote exports, investment and other economic
activities that contribute to a country’s prosperity; and the other side repprsents
it as an an economic tool—from sanctions to trade negotiations—to shape the
behaviour of other countries in support of a nation’s security and other foreign
policy goals.2 Passive side of this proposition is that the economics or greater
trade can deter the potential conflicts among countries.
The conflict in the region could also be theoretically understood through a
neorealist paradigm. In spite of increasing economic cooperation between the
parties involved, the region is in a state of suspicion, which breeds tension,
1 China has unleashed a new wave of aggressive posture in the region started with the rare
earth embargo to Japan in 2010 after a territorial incident in East China Sea and then the incidence such as de facto seizure of the Scarborough Shoal from the Philippines in 2012, declaration of an Air Defense Identification in 2013 over an area of the East China Sea, siege of the
Second Thomas Shoal in the Spratlys in early 2014, construction of an airstrip on the Johnson
South Reef, and the most recent naval skirmishes with Vietnam over Chinese deployment of
Haiyang Shiyou 981 floating oil rig off the central coast of Vietnam, within Vietnam’s lawful
Exclusive Economic Zone (EEZ), just 120 nm from its maritime baseline.
2 Goodman M P, “Economics as a Strategy”, Global Economics Monthly, volume 3, issue 1
(January 2014), 1
China and its Neighbors: Trade Leverage, Interdependence and Conflict
77
conflict and war. Robert J argued that “when there are believed to be tight linkages
between domestic and foreign policy, the quest for security may drive states to
interfere preemptively in the domestic politics of others”. Relationships between
and amongst states are always characterised by uncertainty and suspicion,
necessitating a security dilemma. States look to ensure security and survival
through building up sufficient military capacity to assert sovereignty.3 He also
mentions that if use of forces is too costly to the states, there would be fewer
restraints on the use of nonmilitary instruments such as economic tools described
in this paper.4
Further, states are primarily concerned with relative gains that is either
maintaining or improving their positions relative to other states. Within this
context, states seek to maximise their security. States maximise their security
by increasing their relative power status in the international system. Balance of
power politics emerges as a tool to contain conflict and as a consequence of the
structural dynamics of the international system and also if the distribution of
power and capacities between and amongst states varies significantly. Neorealists
mostly associate bipolar systems with greater degree of stability than multipolar
systems. The balance of power is critical and maintaining the balance contributes
significantly to reducing the likelihood of war.
There is also a collision between economics and security that pose a strategic
challenge in Asia today. According to Feigenbaum, “the same countries that
are trading, investing and growing together are beset by security tensions and
dysfunctional diplomatic relationships”.5 Beijing’s long-term strategic intentions
cast deep anxieties among other nations in the region despite China has become
the top trade partner for many of Asia’s major economies. Yet, economic
interdependence alone cannot serve as a conflict-mitigating mechanism.
1. Trade: A Conflict Mitigating Mechanism?
Looking at the total trade of these countries reveals that China is the top importer
as well as exporter from the region followed by Japan, South Korea and India.
China also maintains a robust trade surplus which was equal to 177.3 billion euros
in 2011. Singapore and South Korea are the two other countries in the region who
have the trade volume over 500 billion and also have positive trade balance. Japan
3
Robert J., “Cooperation under the Security Dilemma”, World Politics, (Cambridge:
Cambridge University Press 1978), vol. 30, no. 2, 167-214
4 Ibid. 188
5 Feigenbaum A.E, “Ten Trends That Will Shape Asia in 2014”, Article, Carnegie Endowment,
(December 30, 2013).
78
The Journal of Contemporary China Studies, Vol. 4, No. 1
is the second largest exporter and importer in the region and has been maintaining
a positive trade balance until recently. However, since last two years, the import
has outperformed export with 42.7 billion trade deficit starting from 2011. India
is the fourth largest trader from the region with huge trade deficit of 110 billion
euros in 2011, making additional burden to India’s current account deficit which
is close to six per cent of Indian GDP. Indian exports are about 16 per cent of
China’s total exports, which is equal to 1.3 trillion.
China is an export giant and ranked number one in world’s total exports since
2009, a huge climb from being number eight in 1997. Among the regional players,
Vietnam, Malaysia and Singapore are more dependent on China for exports than
others. The ratio of imports of these countries from China was 21 per cent, 10.1
per cent, and 14.8 per cent respectively in 2009. China’s imports from the region
rose more swiftly than its exports to the region, which resulted in its growing
trade deficit with East Asian countries. In 1997, China enjoyed a trade surplus of
US$12.7 billion while in 2009, it had a deficit of US$275 billion from the region.
As China grows fast and trade relations with its neighbours grow bigger, the
phenominon may lead to situation where China uses its trade strength against
its partners as a political tool or some of its trade partners may invoke trade
interdependence as a deterrence agaist China. This national strength will be
dependent on the import volume or export volume of a particular country. If a
country is a large importer, it might possess power as a buyer. Power will increase
with the size of the market in the importing country, or with the size of exports
from an exporting country.6 Such power can sometimes be coercive if a large
buyer suddenly uses the refusal of purchases as a threat for political concession
from a target country.7 So in this sense, China has accumulated lot of strength
that it can leverage upon other states from the region. Or one can explain the
assertiveness of China in the South China Sea and in the East China Sea with the
economic significance of the Sea, both in terms of energy and as a sea route seems
to emerge as a major factor driving Chinese perceptions in the region.
As expalnied by Matsuro, The idea that economic interdependence reduces the
propensity for conflict is also deeply rooted in historical thought.8 In 1748, Baron
de Montesquieu observed, “peace is the natural effect of trade. Two nations who
differ with each other become reciprocally dependent; for if one has an interest
in buying, the other has an interest in selling; and thus their union is founded on
6
Chen IT, “Balance of payments and power: assessing China’s global and regional interdependence relationship” International Relations of the Asia-Pacific, (Oxford University Press,
2014) doi:10.1093/irap/lcu00
7 Lampton, D.M., The Three faces of Chinese Power: Might, Money, and Minds, (Berkeley:
University of California Press, 2008).
8 Mastro Oriana. S., “The Problems with the Liberal Peace in Asia,” Survival, Volume: 56, issue 6, (April /May 2014), 129-158.
China and its Neighbors: Trade Leverage, Interdependence and Conflict
79
their mutual necessities”.9 Kant E, posited in his 1795 essay Perpetual Peace that
international commerce, international institutions and democratic governance
were necessary for world peace.10 The case for free trade in nineteenth-century
Britain was argued on moral terms, specifically that free trade not only created
economic prosperity but also would ensure peace to the empire.11
There are also paralels being drawn comparing the current situation in East
Asia to early 20th century Europe. Britain and Germany went to war in 1914 even
though they had close economic ties — much as China and Japan have now. Then,
as now, there was a regional military buildup by Germany to become a naval
power to compete with Britain, similarly what China is currently doing, competing
with US and Asian countries. The argument is that economic interdependence may
not prevent conflict under all conditions but may prevent from escalating to a full
scale war. Understanding the complex connection between economic factors and
conflict is not just an academic exercise; economic liberalism continues to shape
critical military and security policies, especially that of countries like US and
European countries. China is too moving in that direction.
Some International Relations (IR) scholars argue that in recent decades in
particular, the iternational system has undergone a change in the degree of
interdependence as a result of globlisation. This economic interdependence
affects international behaviour. However,academics have not reached a consensus
on whether and how trade prevents conflicts. There are other factors beyond
economics that can too influence a country’s behavoiur. For example, two
countries may not fight because of factors such as their domestic political system
like democracy, though they trade heavily or perhaps countries only trade heavily
with countries they do not expect to go to war.12
2. Economic Dependence and State Leverage
This section looks at the Chinese trade dependence on the region and Chinese
ability to leaverage foreign policy and security decisions of other countries in the
region by using trade as a tool. Gartzke E and Quan Li argue that interdependence
9 Montesquieu Baron de., “Of Commerce in Different Governments, of Laws in Relation to
Commerce, Considered in its Nature and Distinctions”, The Spirit of Laws, book 20, Chapter
four, (1748)
10 Kant E., Perpetual Peace: A Philosophical Sketch, (London: George Allen and Unwin LTD,
1795).
11 Trentmann F., Free Trade Nation: Commerce, Consumption and Civil Society in Modern
Britain, (New York: Oxford University Press, 2008)
12 Mastro Oriana. S., “The Problems with the Liberal Peace in Asia,” Survival, Volume: 56, issue 6, (April /May 2014), 129-158.
The Journal of Contemporary China Studies, Vol. 4, No. 1
80
is really complex. Economic linkages involve interactions at the systemic, dyadic,
and national levels that are by themselves intricate. The political permutations
of economic linkages further amplify complexity. By referring to Mansfield and
Pollins, McMillan, Gartzke and Quan Li elaborate that how economics matters
to political processes is ultimately an empirical question, but a question with
significant analytical prerequisites.13
Therefore, to analyse the trade interdependence I, consider China’s trade,
imports and exports with select Asian countries as well as each of these countries’
dependence on China for their exports and imports. I calculate the interdependence
as the proportion of bilateral trade to each state’s total trade (trade share).
Tradesharei =
(imports
ij
+ exportsij )
(importsi + exportsi )
=
tradeij
tradei
The concentration of trade share in a single partner is argued to represent
vulnerability and might be indicative of political manipulation. Trade share seeks
to measure the political importance of a given trading relationship; relative to
trade with a state’s other partners.14
China’s trade relations particularly with East Asian countries are manifold
higher compared to other trade regions such as EU or North America. The figures
reveals that Japan tops as the biggest trade partner of China from the Asian
region, though both countries have been at logger heads over various political and
boundary issues. South Korea is the second biggest trade partner of China with a
total trade of 184 billion euros, contributing seven per cent of China’s total trade.
India ranks fourth amongst the other Asian trade partners of China. While in case
of India, China owns the top spot as the largest trading partner. China almost
contributes to 1/10th of India’s total trade. A huge negative trade balance however,
indicates that China’s exports to India are much greater than India’s exports to
China. Hence, China serves as a better import market rather than an export one for
India.
13 Gartzke, E.and Quan Li, “Measure for Measure: Concept Operationalization and the Trade
Interdependence-Conflict Debate” Journal of Peace Research, 40 (5, 2003), 553–571.
Mansfield, E. Pollins, B., “Interdependence and International Conflict: A Conceptual and
Empirical Overview”, in Edward Mansfield & Brian Pollins, eds, New Perspectives on
Economic Exchange and Armed Conflict. (Ann Arbor: MI: University of Michigan Press,
2003): 1–28 ; McMillan, Susan M. “Interdependence and Conflict”, Mershon International
Studies Review, Volume 41-1 (1997),33–58
14 Gartzke, E.and Quan Li, “Measure for Measure: Concept Operationalization and the Trade
Interdependence-Conflict Debate” Journal of Peace Research, 40 (5, 2003), 553–571.
China and its Neighbors: Trade Leverage, Interdependence and Conflict
81
China’s all weather friend and ally, Pakistan, occupies the 10th position with the
total trade of about seven billion euros, while India’s trade with Pakistan is just 1.5
billion. Comparing China with India, it is evident that China’s trade with Asian
countries is much higher when compared to the trade of India or Japan. This is a
crucial factor that will determine how events pan out in the Asian region with a
growing economic clout of China. China’s dependence on the region for its trade
is about 31.4 per cent of China’s global trade. Japan, Korea, India and all East
Asian tigers including Vietnam are huge export markets for Chinese goods. As in
the case of total trade, Japan, South Korea and India are the largest export market
for Chinese commodities from the region. The combined market share of these
three countries for Chinese commodity exports constitute about 15 per cent of
China’s total exports.
Figure 1: Chinese Exports to Asian Countries and Its Export Dependence in 2011
Source: Euro Stat, 2012
(http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/statistics)/
China’s exports of 304 billion euros worth of commodities to the region
constituted about 23.6 per cent of its global exports in 2011 and India depends
on the region for about 25.6 per cent of its global exports. Though, this part of
Asia is a huge market for China, the trade data shows that China’s contribution is
comparatively low in the domestic markets of each individual country in terms of
their total imports. Also for exports, China is much more dependent on advanced
economies in Europe and America. China’s export to small economies of South
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The Journal of Contemporary China Studies, Vol. 4, No. 1
and South East Asia is comparatively low. However, the recent trade facilitation
measures by China show that it is working in the direction to improve its export
market in smaller countries such as Nepal, Sri Lanka and Myanmar through
various measures including financial assistance and investments in these countries.
One way to interpret the data is, China does not have much leverage in its
export to Asian countries that can be used to settle the political disputes or to
bring peace in China’s favour. Particularly the individual countries in South
East Asia cannot bargain with China as their imports from China are relatively
weak. External export control is another way to flex muscles. The control can be
powerful when the exports are strategic items or scarce natural resources. China
used this tool as an informal embargo on rare-earth exports to Japan during the
2010 Diaoyu/Senkaku crisis. In this case, China used its dominant position in
export to settle the political crisis. The confrontation between China and Japan in
September 2010 over the detention of the captain and crew members of a Chinese
fishing vessel by Japanese coastguard resulted in a number of retaliatory measures
by China. The most controversial among them was the halting of shipment of rare
earths and related material to Japan. This was a rare case of a country, taking an
economic measure to solve a political dispute by using rare earth materials as a
strategic weapon.
3. Case Study: Territorial Dispute in East China Sea
and Rare Earth Embargo -2010
Even prior to this informal embargo on rare-earth exports to Japan during the
2010 Diaoyu/Senkaku crisis, Chinese experts and nationalist who are aware of the
importance of REEs were anguishing over loss of China’s national wealth at low
rates to its rival countries such as Japan, South Korea and Western countries. Xu
Guangxian, China’s “Father of Rare Earths,” has been vocal to build up strategic
reserves of rare earths in China. On November 02, 2009 in an interview to China
Economy Times, Xu, complained publicly that Japan and South Korea have built
up stockpiles, which are enough for 20 years of consumption by taking advantage
of low market prices of Chinese over supply. He was pushing the government
on policy issues and suggesting the major rare earth producers such as Baogang,
Minmetals, and Jiangxi Copper to implement the stockpiling. He also criticised
the government’s inability to prevent smuggling of Chinese natural resources to
Japan, claiming that Japan gets approximately 20 per cent of its rare earths from
China’s black market.15
15
Rare Element Resources Ltd., “Chinese rare earth expert calls for immediate stockpiling”,
(November 3, 2009) http://www.stockhouse.com/companies/bullboard/t.res/rare-element-
China and its Neighbors: Trade Leverage, Interdependence and Conflict
83
Rare earths were traded freely and at a discounted price on the global market
before the mid-2000s. Since 2006, however, China-the world’s leading RE
producer, gradually tightened export restrictions on Rare Earths. China has
become the largest country of rare-earth deposits, producer, consumer and an
exporter. There is a growing demand-supply gap because of dearth of any other
major supplying nation. China’s imposition of export restrictions on several rare
earth metals, on the grounds that it needs the higher quantities for its clean energy,
and high-tech sectors, is squeezing an already starved market.
The data shows that starting from 2006 China has started to restrict the export
of these minerals and along with pushing the average price per kgs upward
reaching at its peak of US$ 171.39 per kg in 2011. It was reported at that time, the
average price of some heavy rare earths went up to 800 per cent. Though the price
level has moderated currently, it would be difficult to reach at least the 2010 price
level as China is strictly monitoring the production and consolidating the industry.
Figure 2: Japan’s import of REs from China and the world (1990-2013)
Source: UNCOMTRADE database 2014
The diplomatic standoff with Japan started with the arrest of Chinese fishing
crew and the captain by Japanese coastguard on September 07, 2010. Initially,
China was cautious and had taken a restraint approach mainly through diplomatic
resources-ltd?postid=16449736 (searched date: August 18, 2013)
84
The Journal of Contemporary China Studies, Vol. 4, No. 1
channels and were expecting the release of its citizens as early as possible. In
Beijing, the Foreign Ministry’s spokesperson Jiang Yu told the media that China
was “seriously concerned over the Japanese action” and had “made solemn
representations with Japan.” Jiang reiterated China’s historic claim to sovereignty
over the area and demanded that Japan’s Coast Guard refrain from taking socalled “law-enforcement activities” in Chinese waters.
It was reported that Chinese regulators urgently summoned the presidents of
China’s rare earth companies to a secret meeting in Beijing. It was informed to the
mining executives that the Chinese Government was about to halt all shipments of
rare earths to Japan and if any of their companies stepped up shipments to another
country instead, allowing reshipment of rare earths from that country to Japan,
then the company would lose its export license, which could mean financial ruin.
The assembled executives were also warned against speaking to the news media
about the coming embargo. Chinese Government trade statistics later showed that
exports of rare earths to Japan dropped to almost zero during the embargo, which
continued for two months. In addition to telling companies to halt exports, the
Chinese Government had also instructed customs officials to stop any exports of
rare earth minerals to Japan. China’s customs agency had notified companies not
allowing them to ship to Japan any rare earth oxides, rare earth salts or pure rare
earth metals.16.
However, a spokesman for the Chinese MOFCOM denied that any embargo
had been imposed. Later, Chen Deming, China’s commerce minister, also
dismissed that any embargo was in place, suggesting that the country’s rare earth
exporters simultaneously developed feelings toward Japan that caused them to
stop shipments. Mr Chen, the former governor of China’s Shanxi province which
also produces rare earth minerals might have been aware of the importance of
these minerals and the dependence of Japanese companies to Chinese supply.
The action might have been taken by Chinese customs agents rather than as a
formal trade embargo imposed by MOFCOM to give Beijing more negotiating
room with Japan. Customs agency’s halt of exports of rare earths without calling
it an export ban carried political and legal advantages to China during the crisis.
Imposing an unannounced embargo would have allowed China to ratchet up the
pressure gradually on Japan to release the detained boat captain.17
Most important, the incident also shows the well-connected networks
16
Bradsher, Keith, “World can’t restrain China on rare earth”, Deccan Herald, (March 19,
2012).
17 Bradsher, Keith, “China Is Blocking Minerals, Executives Say”, New York Times (September
23, 2010)
China and its Neighbors: Trade Leverage, Interdependence and Conflict
85
among the state and state agencies; state owned and backed companies and
private players. China’s rare earths industry has the backing of the state and the
communist party. The dramatic use of export restrictions to score a boundary
dispute reveals the principal strategic benefit China owns by rare earths monopoly.
Chinese dominance of REEs in the world market is a critical example of China’s
rise to the world power status, which is clearly the result of a long term strategic
industrial policy. For China, geo-economic and geo-strategic competition remains
closely linked and ultimately, the role of the state is to defend the ruling regime
and enhance China’s comprehensive national power.
The REE embargo episode had sent clear indication to the leaders around the
world about growing doubt concerning Chinese real intentions and that a more
powerful China might use its economic leverage or similar forms as a weapon.
Given the critical reliance on rare earths for different military applications from
missile to radars to satellites and promising new technologies, the exclusive
reliance on China as a sole source of supply is a great risk. However, unlike in this
case, Chinese capacity and willingness to use its economic strength to leverage
political disputes may lead to countermeasures by other countries, which may not
be in China’s long-term strategic interests.
Figure 3: Chinese Imports from Selected Asian Countries and Dependence in 2011
Source: Euro Stat, 2012
(http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/statistics)/
The Chinese action, involving rare earth minerals have escalated to a trade
86
The Journal of Contemporary China Studies, Vol. 4, No. 1
dispute involving the US, EU and Japan resulting a WTO ruling against China.18
Until recently, China typically sought quick and quiet accommodations on trade
issues but the interruption in rare earth supplies is the latest sign from Beijing that
Chinese leaders are willing to use their growing economic muscle.
Chinese import from the region was about 434 billion in 2011, constituting
about 35.2 per cent of its total imports showing a clear difference with export
share. Chinese import figures are more apparent and appealing if seen from other
individual countries’ perspective, which is exclusively dealt in next section.
Japan ranks as the number one source of import for China from the region.
China’s imports from South Korea and Malaysia are also considerably high.
China’s import suggests that China is overly dependent on countries like Japan,
Korea, Malaysia and Thailand. Chinese import from other countries in the region
constitutes less than three per cent of its total imports. China’s import from India
stands at seventh position even below the smaller countries of the region such as
Thailand, Singapore and Malaysia. The pure economic perspective suggests that
China’s role in the region is one of complete dominance. Moreover, it turns out
that China is a valuable importer to the region and a big exporter to the Western
world. In developing strong bilateral ties with almost all countries in the region,
China has stamped its authority and will now look ahead and try to consolidate its
position.
4. Trade Dependence of Selected Asian countries on China
Unlike the previous case of China’s trade dependence, here I examine the trade
dependence of select Asian economies on China. This is the most important
matrix which gives a perspective of trade dependence of the Asian countries on
China. The data reveals that any escalation of conflict in the region will be more
damaging to these countries in relative trade terms than to China because of their
trade dependence skewing towards China. China has become the number one
export and import partner for many of these countries replacing either the US or
Japan in recent years. As shown in Figure 4 ASEAN’s trade share to the US and
EU has continuously reduced since 2000 and on the contrary China’s share has
increased by leaps and bounds.
From the trade data, it can be inferred that in case of any conflict between
China and Japan, most countries in the region would take a neutral position
18 Mancheri N, “ Does the WTO ruling against China on rare earths really matter?, East Asia
Forum (October 30, 2014), http://www.eastasiaforum.org/2014/10/30/does-the-wto-rulingagainst-china-on-rare-earths-really-matter/
China and its Neighbors: Trade Leverage, Interdependence and Conflict
87
fearing the risk of loss of billions worth of trade. However escalation of any
conflict between China-Japan or China-South Korea over territorial disputes is
remote as China has become the leading trade partner for these countries and
China would be in a position to leverage this trade strength to influence the
behavior of its trade partners in favour of China. The export dependence of these
countries on China is remarkable as around 26 per cent of Japan’s total exports
and 31 per cent of Korea’s exports go to China. These two biggest economies in
the region also depend on China for about 18 per cent and 17 per cent of their
imports. The crucial question is will any of them bet on these huge trade volumes
over these tiny islets in East or South China Sea? As the developed countries in
the Western hemisphere are in economic doldrums with declining demands in
their imports, importance of emerging countries like India, China and ASEAN will
increase many folds, making the conflict escalation too costly affair to afford. It
is also evident that many countries in the South East Asian region largely depend
on China, close to a quarter of their total trade, either originate or flow towards
China, even though political relations have been going southward.
Japan
Total trade
with China
257,750.6
Share of exports to
China
26.41
Share of imports
from China
18.57
South Korea
184,504.6
31.58
17.07
Malaysia
67827.4
29.61
16.36
India
56129.7
6.3
12.1
Thailand
48,834.5
18.43
12.19
Indonesia
45,695.9
16.70
17.72
Singapore
47,565.2
7.36
10.76
Philippines
24,326.5
41.06
26.71
Vietnam
30,320.4
12.87
31.82
Pakistan
7966.3
8.83
17.52
Bangladesh
6,228.2
2.38
23.14
Myanmar
4,904.9
21.88
37.29
Sri Lanka
3,861.
1.12
15.40
Nepal
989.4
1.66
27.21
Countries
Table 1: Trade dependence of Select Asian countries on China (Million Euro)
Source: Euro Stat, 2012
(http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/statistics)
The Journal of Contemporary China Studies, Vol. 4, No. 1
88
Xij
∑ Xiw
Column-3 =
×100
ij
(Country i’s export to country j divided by country i’s total exports to the world
multiplied by 100)
Column-3 =
Mij
∑ Miw ×100
ij
(Country i’s import from country j divided by country i’s total imports from the
world multiplied by 100)
Figure 4: China becomes ASEAN’s Largest Trading Partner
Source: Authors calculations on the basis of UNCOMTRDAE data base
Will this huge trade dependence between China and other countries in the
region prevent conflicts from escalation? Some scholars argue so. For example,
Richard Katz argued in Foreign Affairs that the conflict between China and Japan
over the Senkaku did not escalate to a war because of ‘mutual assured production,’
or China needs to buy Japan’s products as much as Japan needs to sell them.19
Japan’s total trade with China has tripled since 2000 rising by 30 per cent year-onyear to more than $300 billion; from 1995-2001, increased shipments accounted
for 45 per cent of overall growth in Japanese exports. Both China and Japan share
a mutual trade relation as 60-70 per cent of goods imported by China from Japan
19
Katz R., “Mutual Assured Production”, Foreign Affairs, 92-4 (July/August 2013), 18-24.
China and its Neighbors: Trade Leverage, Interdependence and Conflict
89
comprises of machinery used to make China’s own exports.20
Trade dependence also means that if one country overly depends on another
either for exports or imports, it may give the rival a wedge in strategic matters.
For example, Philippines a staunch US ally in the region with an unresolved
territorial dispute depends on China for 41 per cent of its total exports and 27 per
cent of imports. In spite of heightened tensions over territorial disputes in South
China, culminating in prolonged standoff in Scarborough Shoal, trade between the
Philippines and China grew by 32 per cent in 2011, reaching 30 billion in 2012.
Whereas Philippine’s export to the US was about 10 per cent of its total exports
and imports was just about 6.4 per cent of its total imports. This over dependence
of Philippines for its exports on China particularly agricultural products has
proved to be a disaster.
Since 2009, Chinese vessels have been involved in aggressive behaviour in
the South China Sea. The activities such as Chinese patrol boats attempting to
ram a Philippine vessel and the April 2012 standoff between the Philippine patrol
vessels and Chinese surveillance ships have been seen as a deliberate campaign
of coercive diplomacy in the South China Sea. Moreover, China also resorted to
economic measures to punish the Philippines for perceived encroachment in the
Scarborough Shoal standoff. Chinese authorities kept-off Philippine bananas from
entering China, allegedly due to pests, and began slowing inspections of papayas,
mangoes, coconuts, and pineapples from the Philippines. Chinese mainland tourist
agencies stopped sending groups to the Philippines, which as the third largest
source of tourists, was a great blow to Manila.21
5. The Relative Degree of Trade Intensity
between China and Asian Countries
The Relative Degree of Trade Intensity (RDTI) Index represents the strength of
the trade ties between the two countries. The RDTI is a measure of county i’s
relative share in country j’s import market or vice versa. For example, in the case
of China’s trade with Asian countries, it implicitly benchmarks China’s trade
performance in Asia against those of China’s trade competitors. The bilateral
export/import intensity index is found by adjusting a country’s export ratio by
means of the relative importance of its exports to the total imports of another
country. The index was used by Kojima K (1964) and Drysdale P and Garnaut R
(1982). To investigate the bilateral trade intensity of select Asian countries with
20
21
Ibid.,22
Mastro Oriana. S., “The Problems with the Liberal Peace in Asia,” Survival, Volume: 56, issue 6, (April /May 2014), 129-158.
The Journal of Contemporary China Studies, Vol. 4, No. 1
90
China and vice-versa, the study uses three different proxies for bilateral trade
intensity, following Frankel and Rose (1998):22
Where Xij is country i’s exports to country j
Xi is i’s total exports
Mj is j’s total imports
Mi is i’s total imports, and
Mw is total world imports.
An RDTI of 1.0 indicates country i is doing relatively better than its trade
competitors in country j’s market; an index number below 1.0 suggests country
i’s trade competitors are out performing in country j’s market. An index number
greater than 1 also indicates that the two nations have a comparatively strong trade
relationship.
Coun- CHN
tries
JPN
ROK
MAS
IND
THA
IDN
SGP
PHL
VNM
PAK
BGD
LKA
NPL
CHN
2.06
2.08
1.48
0.91
1.30
1.15
0.99
1.50
1.80
0.94
1.50
0.53
0.55
--
JPN
2.06
--
1.99
1.98
0.46
2.66
2.80
1.16
2.36
2.30
0.60
0.69
0.48
0.22
ROK
2.08
1.99
--
1.36
0.87
0.93
2.10
1.71
1.88
2.81
0.65
1.33
0.47
0.13
MAS
1.48
1.98
1.36
--
1.19
3.86
3.95
7.38
2.12
2.84
2.53
2.09
1.31
1.02
IND
0.91
0.46
0.87
1.19
--
0.77
2.26
1.48
0.46
1.08
1.39
4.35
6.24
7.94
THA
1.30
2.66
0.93
3.86
0.77
--
2.83
2.55
3.32
4.20
1.07
1.73
1.49
0.98
IDN
1.15
2.80
2.10
3.95
2.26
2.83
--
6.70
2.50
1.94
1.47
2.88
1.60
0.10
SGP
0.99
1.16
1.71
7.38
1.48
2.55
6.70
--
4.98
4.61
0.62
2.85
3.91
0.54
PHL
1.50
2.36
1.88
2.12
0.46
3.32
2.50
4.98
--
3.50
0.40
0.44
0.14
0.09
VNM
1.80
2.30
2.81
2.84
1.08
4.20
1.94
4.61
3.50
--
6.61
0.46
0.39
0.36
PAK
0.94
0.60
0.65
2.53
1.39
1.07
1.47
0.62
0.40
6.61
--
6.96
6.80
0.13
BGD
1.50
0.69
1.33
2.09
4.35
1.73
2.88
2.85
0.44
0.46
6.96
--
1.88
0.09
LKA
0.53
0.48
0.47
1.31
6.24
1.49
1.60
3.91
0.14
0.39
6.80
1.88
--
0.07
NPL
0.55
0.22
0.13
1.02
7.94
0.98
0.10
0.54
0.09
0.36
0.13
0.09
0.07
--
Table 2: The Matrix of Bilateral Trade Intensity Index of Select Asian Countries
Source: Authors calculations on the basis of UNCOMTRDAE data base
22
Kojima K, “The Pattern of International Trade among Many Countries,” Hitotsubashi
Journal of Economics, 5-1 (1964), 16- 36.Drysdale, P. and Garnaut, R, “Trade Intensities
and the Analysis of Bilateral trade Flows in a Many Country World: A Survey,” Hitotsubashi
Journal of Economics, 22 (2, 1982), 62-84;Frankel J.A. and Andrew K. Rose, “The
Endogeneity of the Optimum Currency Area Criteria,” The Economic Journal, 108 (July
1998), 1009-1025.
China and its Neighbors: Trade Leverage, Interdependence and Conflict
91
The degree of trade intensity index is a clear indication of bilateral ties between
countries in the region. From table-3, it is evident that for the stronger countries in
the region like Japan, South Korea, Malaysia and a few others, the export to China
is stronger (intensive) than the imports from China. Though, the region represents
a considerable share in China’s exports in terms of intensity, China’s imports from
the region is more intensive compared to China’s total imports. As China becomes
the huge market for these countries for selling their goods, China’s relative power
as buying nation also increases enabling China to dictate terms with most of these
countries. The pure economic perspective suggests than China’s role in the region
is one of complete dominance. In developing strong bilateral ties with almost all
the countries in the region, China has stamped its authority and will now look
ahead and try to consolidate its position.
How this over dependence for trade on China can affect the behaviour of Asian
countries? For example, China being Malaysia’s largest trading partner, whereby
its export to China amounts to 30 per cent of its total exports and about 17 per
cent of its total imports. In 2012, the Chinese Embassy in Kuala Lumpur was
the second-largest issuer of Chinese visas in the world. This huge dependence
on China for its trade has compelled Malaysia to compromise its position on the
South China Sea disputes.
It was reported that on March 26, 2013, that People’s Liberation Army Navy
(PLAN) conducted a major naval exercise in the South China Sea, close to what
China calls Zhengmu Reef, which is known as Beting Serupai in Malay. It’s some
80 kms away from Malaysia and 1,800 kms from the Chinese mainland. This was
one of the biggest expeditions of PLAN with four vessels led by the PLAN’s latest
amphibious landing ship, the Jinggangshan. While serving as a sign of China’s
rising assertiveness, the exercise was also notable for the distinct lack of a visible
public reaction from Malaysia. Neither the Malaysian Prime Minister nor the
Foreign Ministry has made even the most perfunctory statement on the matter. In
contrast to how such exercises are greeted in Hanoi and Manila, the Malaysian
public response has been a deafening silence.23 So what explains Malaysia’s muted
reaction to this overt demonstration of China’s growing power? In August 2012,
ASEAN failed to reach a consensus on a joint statement for the first time in 45
years of its history, because the chair, Cambodia was pressured by China to block
any mention of the South China Sea disputes in the joint statement. Cambodia is
largely dependent on China for economic aid; in 2011 alone the amount of foreign
investment pledged to Phnom Penh by China was 10 times greater than that
promised by the US.
23
Shahriman, L., “Why Malaysia isn’t afraid of China (for now)”, The Strategist - The
Australian Strategic Policy Institute Blog, (April 24, 2013)
92
The Journal of Contemporary China Studies, Vol. 4, No. 1
This shows that other ASEAN nations will also eventually follow the Malaysian
way as their economic ties with Beijing become more intensive. This soft stand of
ASEAN members on China was evident in the ASEAN-Japan Commemorative
Summit Meeting held in Tokyo in December, 2013. It was reported that despite
a significant diplomatic effort, Prime Minister Abe failed to get a more coveted
rebuke from ASEAN on China’s recent imposition of a unilateral Air Defense
Identification Zone (ADIZ) in the East China Sea. The lack of an ADIZ
condemnation is not surprising as ASEAN remains divided on how much – if
at all – it should prod China on its increasing assertiveness towards its regional
neighbours.24
Facing complex and evolving strategic circumstances—particularly China’s
ever-growing power and assertiveness, countries in the region are reinvigorating
themselves with new partnerships with countries from the region as well as from
outside like the US. Though, in the recent past relations of countries like Japan,
Korea, Vietnam and Philippines have deteriorated with China yet most of the
Southeast Asian states have maintained cordial links with Beijing despite their
reservations about China’s regional behaviour. Indonesia, Malaysia and Thailand
are even tentatively developing defense and security links with China.
6. Implications at Large
The implications of this economic over dependence on China, an aspiring
hegemonic power will be multi-faceted. Continued occurrence of Chinese
assertiveness in the region such as declaration of ADIZ, naval maneuvering in
East and South China Sea or the continued infiltrations in Indian border areas
may become routine affairs. China may again use its trade power as a bargaining
chip by selectively restricting exports or banning imports. No country from the
region will be in a position to take a particular side if a bilateral confrontation or
conflict occurs between China and an individual country from the region as the
economic benefit for doing so will be higher than taking a side. Therefore, most
of the countries would take a neutral stand. Some smaller countries like Cambodia
or Laos even may align with China.25 China remains an important player even
in smaller countries like Bangladesh and Vietnam where India and Japan have
a strong strategic hold. As a result these countries might choose to remain
evenhanded as taking sides would be detrimental to their business. In effect, the
24 Miller J. B., “Japan Doubles Down on ASEAN”, The Diplomat, (December 23, 2013), at
http://thediplomat.com/2013/12/japan-doubles-down-on-asean/ (searched date: January 23,
2014)
25 Cambodia and Laos are large recipients of China’s aid.
China and its Neighbors: Trade Leverage, Interdependence and Conflict
93
trade relations of China neutralize all the soft power capabilities that India and
Japan possess in the region.
For Japan, the increasing economic relations of China with Asian countries
will have multifaceted implications. China has become the largest trade partner
for many Asian countries replacing Japan. This is a crucial factor that will
determine how events pan out in the Asian region with a growing economic clout
of China. It can be inferred that with the declining trade relationship, the political
importance of Japan to others from the region will also become less important. As
shown in the article, if a conflict arise between China and Japan, most countries in
the region would take a neutral position fearing the risk of loss of billions worth
of trade and economic aid. However escalation of any conflict between China
and Japan over territorial disputes is remote. The export dependence of Japan
on China is around 26 per cent of Japan’s total exports and about 18 per cent for
imports. Also, 60-70 per cent of goods imported by China from Japan comprises
of machinery used to make China’s own exports. China needs to buy Japan’s
products as much as Japan needs to sell them.
This is remarkable and the crucial question is will any of them bet on these
huge trade volumes over these tiny islets in East China Sea? However, as the
economic strength of China increases, it would be in a position to leverage this
economic strength to influence the behavior of its trade partners including Japan in
its own favor. The economic dominance of China over region will give China the
power to influence the domestic policies of other countries, what US has enjoyed
for a long time and China will now look ahead and try to consolidate this position.
The best strategy for Japan to counter this Chinese clout would be to increase the
defense cooperation, economic aid and strategically important targeted investment
in South and South East Asian countries. Instead of China+1 strategy, Japan
should consider others as equal to China and should revise the policies in future as
ASEAN+ China or India+ China.
Another argument is that trade dependence may prevent the bilateral conflicts
form dangerous escalation. The cost of war is extremely high replacing the huge
benefit from mutual trade that has actually helped the countries from the region
to march towards prosperity. Given this, the more the two countries benefit from
trade, the more they have to lose in the case of a war, and therefore both strive
to avoid one. This argument assumes societies receive salient economic gains
from trade, serious conflict among states disrupts trade, and decision makers
take these two things into account.26 Therefore, the People’s Republic of China’s
(PRC’s) emergence as a major trading power is not a zero sum concept from the
26
Mastro Oriana. S., “The Problems with the Liberal Peace in Asia,” Survival, Volume: 56,
issue 6, (April /May 2014), 129-158.
94
The Journal of Contemporary China Studies, Vol. 4, No. 1
perspective of the region.
However, the overall picture emerging from the trade matrices of the Asian
region is that China’s engagement in terms of trade in the region makes it a potent
force where China’s domination is very strikingly evident by mere numbers. This
would allow China to dictate terms in the region as Beijing expands and enforces
Chinese sovereignty claims in the region, rewarding those who fall in line and
punishing those who do not. Consequently, this assertiveness would lead to a
security threat to the ASEAN and other states in the region. China unequivocally
aspires to become a regional superpower as the military and economic capabilities
of China far outstrip those of other countries,
About the Author
Nabeel A Mancheri is a JSPS Postdoctoral Fellow affiliated to Institute of Social
Science, The University of Tokyo. Prior to joining Tokyo University, he was an
Assistant Professor at India’s National Institute of Advanced Studies, Bangalore.
He has also worked as a consultant to OECD Paris, ICRIER New Delhi and CUTS
International and involved in research related to trade issues. He was a visiting
researcher at Graduate School of International Development and Cooperation
(IDEC), Hiroshima University in 2008-09 and was a visiting fellow at the
Institute of World Economics and Politics, Chinese Academy of Social Sciences,
Beijing in 2012. His recent publications include a monograph on Dominating the
World: China and the Rare Earth Industry, a co-authored book on India-United
States Cooperation on Global Security: Technical Aspects of Civilian Nuclear
Materials Security published by National Academy of Sciences, Washington
DC and a co-edited book on Rise of China; Indian perspectives (Lancer, 2012).
He was selected as an IISS–SAIS Merrill Center Young Strategist for 2013 by
International Institute for Strategic Studies, London and Johns Hopkins University.
He is a member of IISS London.
Address: #708, Institute of Social Science, 7-3-1 Hongo, Bunkyo-Ku, Tokyo, 1130033
Email:[email protected]