Chinese Government Policy is Not Top-Down

I highly recommend China watchers read this paper by political scientist Lee Jones and Zeng Jinhan. It provides a great look into how Chinese policy is implemented:

Foreign-policy steering happens through several important mechanisms. The first is top leaders’ major speeches, which are usually kept vague to accommodate diverse interests and agendas. Rather than ‘carefully-worked out grand strategies’, they are typically ‘platitudes, slogans, catchphrases, and generalities’, offering ‘atmospheric guidance’ that others must then interpret and implement. Examples include: Deng’s tao guang yang hui, whose meaning is ‘debateable’; Hu’s ‘harmonious world’ – ‘more of a narrative than a grand strategy’; and Xi’s ‘new type of great power relations.’ As discussed below, Xi’s vague 2013 remarks on the ‘silk road economic belt’ (SREB) and ‘maritime silk road’ (MSR) exemplify this tendency. [2]

Xi Jinping thought and Xi Jinping thought-study for communist cadre revolves around applying platitudes to local practice, matching national talking points to local policy initiatives. \Xi Jinping’s Speeches are completely devoid of any significant meaning, but local governments go to great lengths to mirror Xi’s  lexicon. Take the Belt and Road initiative for example.

Xi Book

Disturbing quote from Mark Zuckerberg

The Belt and Road initiative is not driven by Beijing. Provincial governments and local governments have been tasked to create their own BRI projects.

From Lee and Zeng:

In 2013, Guangxi and affiliated business interests agreed  with  Malaysia’s Pahang state  government  to  upgrade  Kuantan  port,  including  by  developing a cross-country railway, road links and a US$3.4 billion industrial park. Guangxi subsequently leveraged  BRI  to  expand  its  involvement.  However,  in  September  2015, Guangdong province  signed  a  rival  agreement  with  Malaysia’s  Malacca  state,  including  a  US$4.6 billion industrial park and a US$10 billion port upgrade.

There is little economic rationale for developing two world-class ports on the Malay Peninsula. These projects reflect not a coherent master plan but  rather competitive, sub-national  dynamics in both countries.  Moreover, these micro-level dynamics clearly do not–indeed, cannot–add up to a coherent, macro-level network of infrastructure. Unsurprisingly, statistical analysis reveals no correlation between Vision and Actions [the official policy document guiding the BRI] six ‘corridors’ and projects on the ground, suggesting that the plan is failing even to guide investment activity in a broad sense.

Foreign policy has an excellent article which, among other things, quotes how the World Bank lauded Turkey’s Marmaray rail tunnel as an example of BRI investment, ” even though it is funded by a Turkey-EU-Japan consortium and appears to have no Chinese involvement.” BRI is less of a national strategy and more of an expansion of a specific part of China’s domestic political economy: local governments borrowing endlessly to fund infrastructure projects.

The thing is, local provinces are agile in aligning to federal programs to push their own initiatives. Again citing Lee and Zeng:

Only 14 provinces were invited to the NDRC’s initial OBOR symposium in December 2013, indicating a relatively tight circle of beneficiaries. Excluded provinces, however, quickly lobbied for inclusion, through  forums  like the NPC. Provincial  universities  and  think  tanks  were  encouraged to demonstrate locales’ historical links to the ancient silk road – generating the aforementioned publications boom. Local media were also enlisted, leading to a profusion of stories mentioning OBOR, from 543 in 2014 to 5935 in 2015, with coverage in virtually every provincial outlet. For example, Shaanxi and Henan provinces waged an intense public battle over which of them contained the start of the historical silk road Competition over the MSR’s ‘starting point’ was even fiercer, with rival claims from Fujian, Jiangsu, Guangdong and Guangxi. Provinces with weaker claims invented ‘starting points’ linked to geographical locations or commodities, like porcelain or tea, then even squabbled over these. Shandong and Hebei, for example, both claimed that their cities, Qingdao and Huanghua, were the ‘northern starting point.’

China is built from the bottom up, from province to federal government. Local media, local SOEs, and local projects are cooked to align to federal buzzwords. Even SOE structure is province-up. Look at CRRC’s subsidiaries pictured below.

CRRC subsidiaries

CRRC is an active holding company comprised of many local companies. These local companies are unique in leadership, future plans, and corporate action. They shape the national SOE, CRRC.

In April of 2015, Xi Jinping declared that China will have a ‘toilet revolution’ (厕所革命). Much of the commentary and media coverage have struck a bemused tone and offered little analysis. China’s toilet revolution is a prism through which to examine how the central government takes account of popular opinion, how bureaucratic interests are championed by China’s top leaders, and how agencies can effectively implement national policy campaigns. The architect of China’s toilet revolution is Li Jinzao, former head of the National Tourism Agency. From 1998 to 2002 he served as mayor of Guilin, where he launched a local ‘toilet revolution’ to increase tourism. In 2000, his city built more than 849 new ‘tourism toilets.’

This is serious business. As head of the NTA in 2014, he designated April 1st as China Toilet Revolution Advancement Day and instituted an annual National Toilet Revolution Meeting on the first workday after the Spring Festival holiday. After catching the eye of Xi, the program went viral.

According to state media, between 2015 and 2017 the NTA was able to get the Ministry of Finance to allocate almost 1.8 billion yuan ($264 million) to subsidize toilet construction, funding which helped spur localities to invest a further 20 billion yuan ($2.9 billion) of their own budgets into toilets over the same period. In November 2017, the NTA declared that 68,000 toilets had already been constructed or upgraded, exceeding its original target by nearly 20%. Consequently, the NTA announced a “New Three-Year Action Plan” that raised its original target of 57,000 to 64,000 new or upgraded toilets by 2020.

The take away here is that localities were quick to jump on a national project with serious merit and invested more than ten times what the ministry of finance allocated.

20180612_141212

My photo taken at Tsinghua University. 向前一小步, 文明一大步 (advance one small step, culture/society advances one big step). It is a sign near a urinal telling men to urinate cleanly for the “rejuvenation of the nation.”Really: link

Chinese grand-strategy, from One Belt One Road and SOE structure to the massive amount of money spent on the toilet revolution, is almost always a post-hoc narrative that provinces use to justify their idiosyncratic tendencies and desires. Xi and China aren’t as centralized as commonly thought of.

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