Policy Making in China

ABBREVIATIONS

Policy Making in China

Leaders, Structures and Processes

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STRUCTURE AND PROCESS: AN OVERVIEW

This book has a simple purpose: to illuminate how the bureaucratic structure of the state, policy processes, and outcomes are interrelated in contemporary China. The processes through which large-scale energy development projects are decided reveal that the fragmented, segmented, and stratified structure of the state promotes a system of negotiations, bargaining, and the seeking of consensus among affected bureaucracies. The policy process in this sphere is disjointed, protracted, and incremental.

To many students of politics, our effort to relate structure, process, and outcome would appear to be an elaboration of the obvious. Certainly the writings on American politics have long recognized that, for example, the making of American foreign policy can only be understood in the context of the powers and perspectives of the President, the role of Congress, and the interests and involvement of the National Security Council, the State Department, the Defense Department, and the Central Intelligence Agency. But in the case of China, scholars to date have tended to neglect the complex structure of the state itself as a significant determinant of the political process and policy outcomes. The competing explanations for the proclamation of a policy in China usually have taken one of the following forms: 1. policy X was adopted pragmatically to solve new policy problems pressing upon the leaders; 2. policy X was promulgated in order to keep alive the ideological vision of its proponents; 3. policy X was adopted as a tactical ploy of one or several temporarily allied leaders to rebuff a challenge from rivals; or 4. policy X was adopted by a dominant and enduring faction for the rewards it bestows upon its network of loyalists. The first two explanations assert that policies are reasoned responses to perceived policy problems; the latter two attribute policies to the struggle for power among the top leaders or factions into which they coalesce. None of these explanations incorporates structural dimensions of the Chinese bureaucracy into the explanation.

This volume suggests that an additional hypothesis should regularly be added to these alternative explanations for a policy outcome: Policy X resulted from a bargain among Ministries A, B, and C and Province D either 1. brokered by one or more top leaders, 2. arranged by coordinating staffs acting in the name of one or more top leaders, or 3. negotiated by the supra-ministry coordinating agency, and ratified through routine procedures by the top leaders. Disgruntled Ministries E and F, losers in the deal, planned to pursue strategies to erode the agreement. The bargain sought to reconcile the conflicting organizational missions, ethos, structure, and resource allocations of the ministries involved. Thus, policies are not necessarily either coherent and integrated responses to perceived problems or part of a logical strategy of a leader or faction to advance power and principle. For analytical purposes, a package or bundle of policies is best disaggregated into its individual or separate policies. While some of those policies may result from the initiative of top leaders, others are best seen as a temporary agreement arranged by the top leaders among contending and powerful bureaucracies with diverse purposes, experiences, and resources.

THE WESTERN LITERATURE ON THE CHINESE POLICY PROCESS

Before summarizing our principal findings and providing a road map to this book, it seems appropriate to sketch the development of Western analyses of the Chinese policy process and to indicate how this study seeks to join the existing literature.

Analysis to the Late 1960’s

In the years immediately prior to the start of the Cultural Revolution (1966), Western analysts had achieved a broad consensus concerning the major characteristics of the Chinese state that had emerged in the wake of the communist revolution. The Chinese state included the government, the Chinese Communist Party (CCP), the People’s Liberation Army (PLA), the smaller surviving parties of the ancien régime, and the organizations which mobilize the populace. This system, whose structural features were similar to those of the Soviet Union and Eastern Europe, was authoritarian and highly coercive. It was dominated by a single party formally organized on Marxist-Leninist principles and had a socialist or Soviet-type economy. So went the conventional description of the core features of the Chinese system. Its authoritarian or totalitarian features merited stress due to the alleged firm grasp of the state over society, the absence of the rule of law, and the hierarchical structure of power. Compared to most other countries, the top leaders wielded enormous power, and few if any institutional checks existed to guard against the exercise and abuse of this power. The central role of the public security apparatus in the relationship between the elite and the masses underscored the salience of coercion in the system. In no small measure, order was maintained in society through the threat and use of force as well as through automatic deference to authority.

The socialist economy particularly deserved emphasis due to the role of the state in the management of the economy. The state owned and managed the major means of production. Private property was strictly limited, and the allocation of strategically significant resources occurred through state command rather than in the market place. The state sought to regulate the economy through five year and annual plans rather than through monetary and fiscal instruments of control. Prices of key commodities were bureaucratically administered rather than set impersonally in the market.

No portrayal could overlook the fact that the Chinese Communist Party dominated the state apparatus through its control of personnel appointments, its setting of policy guidelines which Party members everywhere were expected to obey, and its control of the media through which it shaped the ideological climate in which the entire populace lived. The adherence of the leaders to Marxist-Leninist ideology constituted another core feature, not only because of the organizational consequences which flowed from their beliefs but because the goals which the leaders set for the nation, the methods they employed to analyze problems, and the perceptual lenses through which they filtered information about their environment were all significantly influenced by their formal ideology.

In the mid-1960’s, several major books were published which elaborated on these core features. To varying degrees, the authors had combined interviews of lower level former Chinese officials with extensive readings of the Chinese press to reach their conclusions. In Cadres, Bureaucracy, and Political Power in China,¹ A. Doak Barnett drew upon interviews to detail the hierarchical structure of the state and describe how the Party penetrated and controlled the government apparatus. Leadership in Communist China² by John Lewis also illuminated the formal structure and ideology of the Party. Jerome Cohen examined the coercive dimension of communist rule in The Criminal System in the People’s Republic of China.³ The Chinese Economic System by Audrey Donnithorne provided an encyclopedic account of the bureaucratic structures which controlled the economy,⁴ while Market Control and Planning in Communist China by Dwight Perkins analyzed state control of the market.⁵ In his classic Ideology and Organization in Communist China,⁶ Franz Schurmann argued that the penetration of society and the Chinese Communist Party and its Marxist-Leninist ideology had reunified a nation previously fragmented by foreign aggression, civil war, and loss of a value consensus.⁷ In Mao Tse-tung: A Political Biography, Stuart Schram demonstrated how the thought of Mao prompted his specific policy preferences.⁸ Finally, in Political Participation in Communist China, James Townsend stressed that the populace was involved in the implementation of policy at the choice of the rulers, but ordinary citizens lacked meaningful opportunity to influence the process.⁹

The major discordant theme was struck by Lucian Pye. He advanced a particularly controversial cultural interpretation of the Chinese politics in The Spirit of Chinese Politics,¹⁰ and his student Richard Solomon refined and elaborated upon this approach in his seminal Mao’s Revolution and the Chinese Political Culture.¹¹ To Pye and Solomon, the communist system was unmistakably Chinese. Certain cultural traits infused and were core to the system, especially the importance of personal relations, the allure of patrimonialism and patron-client ties, and the deep-seated fear of disorder (luan). They argued that, for cultural reasons, the organizational apparatus which so impressed most analysts was vulnerable to rapid breakdown. They claimed that from birth, Chinese are taught to enter into and exploit patron-client relations. Subordinates place excessive faith in the capacity of their patrons, whether familial or political, and when hopes are dashed, anger comes to the fore. Chinese are not taught to handle conflict well, according to the Pye-Solomon interpretation. As a result the structure of political authority, built upon clientist ties, is easily susceptible to rupture either when the leaders engage in their inevitable factional struggles at the top or when patrons prove unable to protect their clients.

The Effect of the Cultural Revolution upon Analysis

For several reasons, the Cultural Revolution and its aftermath from 1966 to 1976 eroded the emerging consensus and appeared to validate the insights of Pye and Solomon. For the most part, the previous description of the core features of the regime did not enable Western analysts to anticipate or explain the Cultural Revolution. While not overturning the insights of the earlier landmark studies, therefore, political developments during that tumultuous decade raised new questions and posed new challenges to the mid-1960’s portrayal of the system. The original Schurmann argument underwent a significant metamorphosis. Previously he had argued that ideology and organization were mutually reenforcing, but with the attack by Mao Zedong upon the Party, in the revised edition of his book,¹² Schurmann observed that the relationship between beliefs and institutions could become tension ridden. Schurmann, as many others, concluded the Cultural Revolution in part was a conflict between defenders of the faith and defenders of the institutions. Equally significantly, Schurmann as others concluded that the Cultural Revolution revealed the continued vitality of Chinese traditions and social organizations beneath the formal organizational overlay. In a sense, this conclusion reenforced the theme of Pye and Solomon, a message long proclaimed by historian John Fairbank: a valid interpretation of Chinese politics must be rooted in an understanding of its cultural and intellectual roots.¹³

The deep differences among the top leaders called into question the previous assertions that they adhered to a single, unifying ideology. Marxism-Leninism clearly permitted a diversity of views on goals, epistemology, and policies. The previous portrayal of a cohesive leadership group in smooth control of its society clearly had to be modified, and henceforth no portrayal could ignore the political conflict and tension seemingly endemic to the system. Indeed, explaining the sources of conflict became a new, major analytical task.

The rise of the People’s Liberation Army and Lin Biao during 1965-1971 and the subsequent role of several top PLA commanders in helping Deng Xiaoping to become the successor to Mao also had several implications. The PLA surpassed the public security apparatus as the coercive instrument meriting foreign attention; scholars had previously tended to neglect its domestic role. Further, the PLA not only played a role in maintaining order in society, but was intimately involved in elite level political struggles. The role of coercion in Chinese politics extended to the apex of the system.¹⁴

The Red Guard movement revealed that under certain circumstances, political involvement of the populace could escape the confines of the leadership, and some spontaneity in participation could occur, with considerable influence upon policy, although the effect was not necessarily what the populace intended. The previous image of a state in control of society yielded to a more complex portrayal of interaction between the leaders and the led.¹⁵ This issue stimulated some scholars to modify and apply interest group theory developed in the United States to the Chinese case, as Sovietologists were also then doing in the Soviet case.¹⁶ Other scholars began to examine in depth how particular sectors of society sought to influence the system,¹⁷ and yet others began to examine carefully the interaction of state and society at the lowest levels. Interesting for our purposes, this literature in recent years has persuasively traced the relationship between structure and process in such diverse work units as rural villages, hospitals, and factories.¹⁸ In all locales, the researchers have found, the political structure fosters dependency and patrimonialism. In a sense, our study discovers the same phenomenon at the bureaucratic and higher levels.

Finally, documents released during the Cultural Revolution, as well as changes in the structure of the Chinese state, especially the attacks upon Party and government bureaucracies in 1966-68, raised questions about the efficacy, discipline, and coherence of Chinese organizations. A debate emerged between some scholars who argued the system was centralized and others who contended the system was cellular, with either the provinces or local units enjoying considerable autonomy and a capacity to resist the upper levels.¹⁹ Our study joins this debate as well.

Two Models of the Policy Process Emerge

In short, the core features of the system which were elaborated in the early and mid-1960’s provided a static picture which proved unable to explain political change or the dynamics of the system. The Cultural Revolution and its aftermath stimulated many new questions and approaches to the study of Chinese politics. Nowhere was this invigoration more evident than in the analysis of the policy process: how decisions are made and why particular policies are adopted.²⁰ In fact, two different approaches emerged in the 1970’s in the common effort to illuminate the policy process. One approach focused on the evolution of policy in particular areas: agriculture,²¹ science,²² public health,²³ education,²⁴ agricultural mechanization,²⁵ and so on. The second focused on the elite political strife which produced major policy departures: the Hundred Flowers campaign, the Great Leap Forward,²⁶ the Cultural Revolution,²⁷ or the post-Mao reforms.²⁸ For understandable reasons, given the limitations of the previous emphasis upon the totalitarian features of the system and the seeming weakening of organizations in China from 1966 to 1976, a third approach received only muted emphasis: to examine structure and bureaucratic politics.²⁹

The selection of a research topic inescapably reveals the assumptions of the analyst about the dynamics of the system. To sharpen the differences between the two dominant emphases—one initially focused on policy analysis and the other on personal politics at the top—we suggest the first stems from an implicit rationality model of the policy process while the second arises from an individual or factional power model. To the former, reasoned debates by the leaders over substantive issues are primary in Chinese politics, while to the latter, the struggle for power among contending leaders supercedes other considerations. The rationality model focuses upon the response of the leaders to changing economic and foreign policy environments, while the power model attributes the stimulus for policy changes to the perpetual jockeying for position among the leaders.

In reality, most analysts of a policy issue also draw upon the power model, while many studies of elite strife incorporate aspects of the rationality approach. The analysts of policy issues recognize that the resolution of policy disputes depends, in part, upon the power of the various contending schools, while the adherents of the power model acknowledge that most leaders pursue power as a means to attain policy objectives. Yet, it is worth elaborating upon pure versions of the two models in order to illuminate the strengths and limitations of each, especially since this study seeks in self-conscious fashion to incorporate both models and add a third ingredient—the interaction of the elite with the bureaucracies, the relations within and among bureaucracies, and the role of bureaucracies in the policy process. With some exceptions, neither the policy analyses undertaken to date and the rationality model which they embody nor the studies of elite politics and the power model on which they are primarily based investigate bureaucratic politics in depth or recognize that in many instances policy outcomes are in substantial part the product of ubiquitous inter-agency competition.

POLICY ANALYSIS AND THE RATIONALITY MODEL

The original rationality model posits that policy outcomes are the result of an evaluation of choices by a coherent group with shared perceptions of the values to be maximized in response to a perceived problem. The overarching concern of the group is to advance the national interest. The model originates with Western notions about how policy ideally ought to be made: a problem triggers a search for the appropriate solution. Data are gathered about the nature of the problem. Pragmatic officials, motivated primarily by the desire to advance the public good, evaluate alternative solutions in light of their respective costs and benefits, and finally, after reasoned debate, the best solution is selected.³⁰

While no analyst of politics is so naive as to accept this portrayal as representing all of reality,³¹ the model has had its impact in subtle but important ways. Scholars implicitly influenced by the rationality model in the study of Chinese politics believe Chinese politics are rooted in reasoned debates over perceived policy problems. Such analysts devote their energy to explicating the inner logic and coherence of each viewpoint in a particular policy debate. The differences among Chinese leaders are explained in terms of their distinctive values and preferences for the nation. The contending solutions to a problem are each the result of relating means to ends, with proponents advocating different objectives. Policy alternatives are articulated by contending schools of thought, and policy outcomes are the result of either a victory of one policy line over another or a compromise. The rationality model researchers tend to portray outcomes as coordinated responses to perceived policy problems, in light of the ideological proclivities of the prevailing policy makers.

Examples of policy studies which implicitly draw heavily upon the rationality model are Uncertain Passage by A. Doak Barnett,³² Organizing China by Harry Harding,³³ and Chinese Business under Socialism by Dorothy Solinger.³⁴ Although he has also pioneered institutional studies, through the years Doak Barnett has perhaps been the leading political analyst to detail the objective environment within which policy is shaped and the range of rational responses the leaders enjoy to the problems that press upon them. He believes the primary way to identify long-term trends is to illuminate the parameters which the leaders perceive and in which they inescapably work.

Several sentences in the opening pages of Organizing China reveal Harding’s similar underlying assumptions: [The] aim is to examine the problems Chinese leaders have encountered in building and maintaining effective administrative organizations. The book examines Chinese organizations through the eyes of China’s leaders, seeking to understand their diagnoses of their country’s organizational problems, the debates they have conducted on organizational questions, and the programs they have adopted. . . . Chinese leaders have experimented with a wide range of organizational programs and structures, seeking at some times to rationalize their bureaucracy, at other times to subject it to external supervision, and at still other times to replace it with more participatory forms of organization. . . . The Chinese communists have realized that political organization is an essential mechanism. . . . Because of the importance assigned to organizations, discussions of this administrative apparatus have occupied a [high] place on the Chinese political agenda.³⁵ These sentences embody a strong underlying assumption of rationality in the policy process. Organizing China implicitly assumes a connection among what it terms the diagnoses, debate, and program stages of the policy process.

Nor is the Harding volume alone in the rationality that it assumes inheres in the Chinese policy process. In the introduction to her informative work on the politics over domestic commercial systems, Solinger suggests that conflict among the Chinese elite over the organization of domestic trade revolves around the question of the proper scope for the market under socialism. . . . This controversy has its roots in conflicting ideals within the philosophy of Marxism, each of which is relatively more important to some members of the elite than to others.³⁶ Chinese Business Under Socialism identifies these conflicting values as maximizing equity, preserving order, and increasing productivity. It concludes that the repeated reorganizations of the processes for handling consumer goods is in large part the product of sharp clashes among the elite over the priorities in these values.³⁷

LIMITATIONS OF THE RATIONALITY MODEL.

Those who utilize an underlying rationality model, in short, believe Chinese policies result from an effort of the leaders to match national resources to national objectives and to relate national means to national ends. The theoretical literature on decision making enumerates the requisites for this rationality model to prevail. The decision makers must have available the relevant information, they must have a clearly ordered set of priorities, they must have sufficient time to define and evaluate their choices, and the reasons they consciously offer for their choices must be the operative considerations that govern their behavior. Western scholars who implicitly accept the rationality model, however, have generally not explored the constraints upon China’s top leaders which may preclude their attaining the rationality which the scholars assume. Thus, the policy analysts tend not to probe decisional constraints upon the leaders due to the limited information available to them, the ambiguities and ambivalences in the minds of the leaders concerning their hierarchy of value preferences, and the time pressures they confront in comprehensively evaluating their alternatives.

Further, the analysts of Chinese policy issues frequently accept the rationale for policy choices which the leaders offer, instead of asking whether the real motivations of the decision makers differed from stated rationales. They do not explore the possibility that policy was no more than an uninformed and unconsidered impulse which powerful leaders then instructed their idealogues to cloak in ideologically justifiable garb. Moreover, while policy analysts such as Harding and Solinger recognize there are competing solutions to policy problems, they tend to portray each solution as equally rational, coherent, and reasoned in relating national resources and objectives. They frequently do not consider that the views of one group may indeed be the product of a rational calculus, while a second view may be simple whim, and a third may be the product of yet another decisional process.

The policy analysts also tend to assume that there is a direct relationship between the problem and the solution, and that the policy is an actual response to the problem that triggered the decisional process. But organizational theorists suggest even this assumption merits scrutiny. The connection between the original stimulus, the process, and the response may be very complex, loose, and nearly random.³⁸ In the American case, at least, policies can be adopted not so much actually to solve the perceived problem of the moment but because the leaders wish to appear to be grappling with the problem at hand. They accept as the purported solution a policy which specialists had devised as a preferred response to a previous policy problem. Unable to market their recommendations on the last occasion, these specialists then seize upon the new opportunity to repackage and sell their solution to the leaders.³⁹ Given all the processes that demonstrably arise in other bureaucratic systems, a sophisticated approach to the Chinese political process cannot be safely rooted in assumptions that the rationality model has sufficiently powerful explanatory value to be used in isolation from other approaches.⁴⁰

POWER MODEL

The second frequently employed model of the Chinese policy process is the power one. Policy outcomes result from struggles among the top leaders who are quite sensitive to the implications of alternative policy choices upon their stature and power. Issues are not just or even largely decided on their merits in terms of promoting the national interest. Rather, they are evaluated in terms of the personal consequences of the decision upon the individual policy maker or faction. To label one approach the rationality model and the second a power model does not imply that the adherents of the power model necessarily portray the individual leaders of China as irrational. To the contrary, from their individual or factional perspectives, given their individual or factional means and ends, the behavior of the leaders may be quite rational. But the policies which result from the struggle over power cannot be said to be either rational or irrational. Rather, policy is the aggregate response of leaders or factions to problems they perceive and this response reflects the relative power of the participants, their strategies for advancing their beliefs and political interests, and their differentiated understanding of the problem at hand.

Several sophisticated studies have appeared in recent years employing this framework, among them The Origins of the Cultural Revolution by Roderick MacFarquhar, and The Dynamics of Chinese Politics by Lucian Pye.⁴¹ MacFarquhar succinctly described his approach, which seeks to combine principles and power, in this fashion:

The official explanation of the cultural revolution is that it was . . . a long term struggle between two [policy] lines. . . . But a careful examination of the evidence suggests that neither Mao nor Liu was consistent; that Mao and Liu were not always opponents. . . . Use of the term two lines implies that the issues were of fundamental importance, and this is certainly true in large part. . . . But as always in the affairs of men there were also bitter feuds over power and status. The cultural revolution was rooted in both principled and personal disputes.⁴²

Attributing his interpretation to cultural influences, Lucian Pye justifies his focus on factionalism at the top in this way:

The fundamental dynamic of Chinese politics is a continuous tension between the imperative of consensus and conformity on the one hand, and the belief, on the other hand, that one can find security only in special, particularistic relationships, which by their very nature tend to threaten the principle of consensus. These particularistic ties tend to produce factions.⁴³

Pye goes on to argue that factions rarely, if ever, represent clearly defined institutional, geographical, or generational interest. Rather, the bases of factions are shared trust and loyalties, perceived common foes, and mutual career self-interest. Nor, says Pye, are factions formed in response to shared policy preferences. Pye asserts, Those who are actively engaged in [Chinese politics] do not have the luxury of deciding their stand on new issues on the basis of an objective weighing of all the pros and cons.⁴⁴ Pye then asserts, There are no fixed rules in the relationship between policy and factional politics.⁴⁵

Most China specialists propounding the power model have not placed their analysis in a comparative framework.⁴⁶ Yet, several theorists of Western organizations have featured prominently the struggle for power among competing individuals and factions.⁴⁷ As well, some of the underlying dynamics of the power model have been captured by those who use game theoretic concepts to study conflict and cooperation. They focus on motivations, payoff matrices, constraints, and the resulting strategies to influence the behavior of others. Decisional outcomes are the result of strategies pursued by rational actors facing different payoff matrices. Outcomes occur at the point where different strategies intersect, and the game of politics involves trying to encourage the other players to alter their strategies so that the point of intersection will change to a more favorable payoff point to oneself.⁴⁸ The choices of rational individuals are governed by the structure of the situation which they confront.

INTRODUCING BUREAUCRATIC STRUCTURE

The contrast between the power and the policy models is considerable. Their most significant difference is that the policy analysts believe the top leaders of China evaluate policy choices in terms of their perceptions of the national interest, while the power analysts stress that the choices are evaluated in terms of individual or factional interests. A second difference is that the policy analysts tend to neglect the pursuit of and struggle over power as a core interest in politics, while the power analysts usually do not dwell in depth on the substantive issues at stake. Yet, both models accept the notion that policy is shaped primarily at the top and that the leaders seek a purposeful outcome. While both approaches recognize that bureaucratic structure often creates or compounds the problems demanding political decisions, neither approach considers the structure of the bureaucracy as a necessary ingredient for understanding typical policy outcomes. Neither approach examines the ways in which bureaucracies alter, bend, or distort the external impulses—such as information about economic development or foreign affairs—which they channel to the top leaders. With rare exception, the policy analysts do not detail the formal structures, the different organizational missions, or the ethos of each bureaucracy involved in handling the particular issues they study. The power analysts, while cognizant of the formal procedures at the apex, neither carefully examine the differentiated linkages between each of the top leaders and the bureaucracies they lead nor fully explore the extent to which some leaders reflect the views of the bureaucracies for which they are responsible. Both MacFarquhar and Pye acknowledge the importance of this dimension but do not extensively pursue it.

The neglect of bureaucratic structure frequently leads to dubious assumptions about the policy process. For example, both the policy and power analysts search for logical coherence in policy and assume it must have an underlying, logical consistency. Or, they attribute evident discrepancies—such as contradictory paragraphs in a policy document—to differences among the elite. Another possibility—that semi-autonomous bureaucracies are pursuing different policies and that inconsistencies in a single policy statement are the effort of the top leaders to satisfy competing agencies—tends to be insufficiently explored. Neither the rationality model nor the power model adequately considers that leaders might propound the views of the bureaucracies over which they preside, and that elite contention over policy and/or power might be a manifestation of bureaucratic conflict. Nor do either of these models leave much room for the ubiquitous bureaucratic struggles over the transformation of policy decisions into detailed administrative directives, the incorporation of the directives into budgetary expenditures, and the jurisdictions for implementing the directives.

Recognizing the considerable advances made by the adherents of both the rationality and the power models, this monograph seeks to wed those two approaches while introducing and emphasizing the bureaucratic structure in which the policy process is embedded. Our effort parallels work of several other scholars who stress the importance of the bureaucratic structure in understanding Chinese politics.⁴⁹ Our own focus on structure, process, and outcomes reveals the potential relevance of yet another body of literature—theories of decision making or problem solving in complex organizations. The structural evolution posited in our concluding chapter and the policy processes in the sphere of energy development appear to resonate with a number of competing, abstract models of decision making that have been derived from observing how individuals reach decisions in large bureaucracies.⁵⁰ In recent years, organizational theorists have developed many different abstract models of the decisional process: garbage can, satisficing, evolutionary, or incremental, to name a few. Our information does not allow our identifying one model as the most powerful analytical tool from among the alternatives, all of which place boundaries on the explanatory power of the rationality or game theoretic models. Many of these organizational decision making models recognize that policy outcomes in large organizations do not reach or are not even intended to seek the best outcome. Rather, drawing upon the pioneering work of Herbert Simon, many analysts stress that decisional processes permit the attainment of acceptable or satisfying outcomes, with the participants employing a number of alternative criteria to identify acceptability.⁵¹ As information about Chinese decision making becomes more available, insights of this theoretical literature will prove valuable in developing a more refined sense of policy processes in China.

New Sources

To repeat, we do not denigrate the contribution of the policy or power approaches or the models which they implicitly embody. Those approaches were an improvement over and built upon the earlier static descriptions of the core features of the Chinese state. As both the policy and power analysts recognized, their studies were constrained by the sources available to them, and they did not have direct access to Chinese bureaucracies.⁵² They could not probe the organizational dimension of the process as fully as they might have wished.

It has recently become possible to advance one step further: to place Chinese politics more firmly in its bureaucratic setting and to explore how the structure affects the policy process and elite struggles over power and principle. The opening of China in the post-Mao era to foreign scholars, businessmen, diplomats, journalists, and philanthropists permits this progress, as does the presence abroad of Chinese officials, scholars, and visiting dignitaries who are willing to describe the process from their vantage. Beginning in the early 1980’s, it became possible to interview Chinese officials systematically in different ministries and research institutes.⁵³ No longer were Chinese organizations abstract entities to the analysts. The Ministry of Finance, the State Science and Technology Commission, the Ministry of Education, and other agencies became peopled by human beings working in dank, ill-lit office buildings. Researchers could begin to identify the mandates, spirit, and histories of different agencies.

Not only did foreign scholars gain access to Chinese organizations in the early 1980’s, but foreign businessmen began to invest in China, undertake joint ventures, and establish permanent offices in Beijing, Shanghai, and Guangzhou. Foreign journalists developed their own contacts with individual Chinese. Foundation officials and international civil servants began to cooperate with Chinese in development projects involving many Chinese ministries. Many foreigners, in short, began to acquire insight into diverse parts of the Chinese system, especially its economic dimension. Through interviews, scholars could combine this disparate knowledge into a coherent interpretation of the system.

In addition, the Chinese government resumed its habit of the 1950’s of publishing some administrative regulations, statistics, yearbooks, and organizational handbooks which revealed new information about administrative procedures and the state structure. These new materials did not obviate the utility of the previous sources: deciphering of the People’s Daily and other major newspapers and journals, interviewing in Hong Kong, reading of fiction, and so on. But the newly available sources of the early 1980’s, combined with the evident need to go beyond policy studies and reconstructions of elite struggles, provided the impetus for this monograph. We seek to build upon previous approaches, not to discard them, while drawing upon the new sources of information.

LIMITATIONS OF THE STUDY

Our data concerns China’s energy policy decision making, including the structures and processes of Chinese energy bureaucracies and their influence on energy policy outcomes. More precisely, we focus on the initial development of large-scale energy projects. We gathered information on this sector because the energy bureaucracies—petroleum, coal, and hydroelectric—have developed extensive contact with the outside world, and officials in these bureaucracies were willing to assist our study. They, as we, believed that an enhanced Western understanding of their structures and processes would facilitate the cooperation they sought.

We recognize that the decisions concerning energy development projects are not typical or representative of all decision making in China. Indeed, this study examines only one sector of a complex and varied system, and the extent to which its specific findings apply to other sectors awaits subsequent research.

In several respects, the policy process for large-scale energy development projects is distinctive. First, feasibility studies, financial calculations, and measurement of output are somewhat easier to undertake in evaluating alternatives in the economic sector than, say, in the educational or military sphere. Thus, the criteria for decisions in this sphere may differ from those employed elsewhere. Second, development projects are part of the capital investment decision process, in which the State Planning Commission—even under the reforms—plays an especially important role. This study does not dwell on structures and processes in the on-stream production and allocation of energy or in the setting and implementation of the annual energy plan. Such a focus would have led to greater attention to the State Economic Commission, the General Administration of State Supplies, and the mechanisms for resolving disputes over contracts.

Third, the large projects on which we focus—the exploration for offshore oil, the Three Gorges hydroelectric project, and large scale coal mines in Shanxi province—are not representative of the full range of energy projects. Most investment projects in the energy sphere are much smaller than these giant undertakings, and the procedures for inclusion of small projects in the state plan are different, with less detailed involvement of the central government and greater initiative residing at local levels. Indeed, during the 1980’s, a growing portion of small-scale investments was financed outside the traditional planning and budgeting process described in this monograph. Finally, our selection of projects with a foreign involvement introduces another distinctive factor. It probably means that to some extent the criteria for evaluating the merits of the project reflect foreign influence, with price, output, and profit considerations receiving heightened attention. The role of the foreigner also probably encourages high level officials to become involved in the decision.

It is also likely that the role of the Chinese Communist Party is more limited in the politics of large-scale energy development projects than, for instance, in the formation and implementation of agricultural policy, cultural policy, or personnel decisions. Not only does the sector we study lead to a portrayal of the Party as less central than usually is assumed to be the case, but our written sources and Chinese informants revealed little about the role of the Party: the role of the Party Committees and Party core groups within the Ministry, the chain-of-command from the Party organizations within government agencies to their supervisory CCP bodies (these chains-of-command do not completely coincide with the government chains-of-command), and the roles of provincial Party committees and Central Committee organs in the setting of energy policy. This is the single most serious limitation to the study, but the problem is not so severe as to drain all value from the findings.

We suspect that in fact many of our generalizations about the government energy bureaucracies would apply to the Party in energy policy decision making as well. The CCP and government are, after all, deeply intertwined. For example, in major economic ministries the Party core group usually consists of the minister and vice-ministers. These individuals make the key decisions on professional matters in the ministry regardless of whether they are wearing their Party or their government hats. Thus, our portrayal of the core features of the decision making process probably would remain basically the same if we knew more about the Party, at least in this major sector. Moreover, since we portray the Chinese bureaucracy as fragmented, we contend that in the post-Mao era, at least, the Party is not effectively performing one of its major roles: to bridge the natural divisions in the government bureaucracy and to perform an integrating or unifying function in the formulation and implementation of policy.

PRINCIPAL FINDINGS

Our study reveals a fragmented bureaucratic structure of authority, decision making in which consensus building is central, and a policy process that is protracted, disjointed, and incremental. We summarize these findings here, rather than in our conclusion, because these characteristics of the Chinese state prompted the sequence of chapters in this book: detailed analysis of formal organizations and informal processes, followed by three case studies of energy policy making.

A Fragmented Structure of Authority

The structure of authority within the Beijing leadership (what the Chinese term the Center) consists of four tiers: 1. the core group of twenty-five to thirty-five top leaders who articulate national policy; 2. the layer of staff, leadership groups, research centers, and institutes which link the elite to and buffer them from the bureaucracy; 3. State Council commissions and ministries that have supra-ministerial status and coordinate activities of line ministries and provinces; and 4. line ministries which implement policy. Different pressures and influences shape the behavior of officials at each level. Chapters Two through Four explore the factors at play in each sphere, noting the importance of personal considerations at the elite level and the different organizational missions and ethos at the ministerial level.

The structure of the energy sector highlights the fragmentation of authority. Put simply, the structure of authority requires that any major project or policy initiative gains the active cooperation of many bureaucratic units that are themselves nested in distinct chains of authority. This, in broad terms, has three operational consequences. First, issues tend to rise to higher levels in the system, where appropriate coordinating bodies (such as the State Planning Commission or, at the highest level in the government, the State Council Standing Committee) possess leverage over numerous bureaucratic hierarchies and can bring together the various parties. In other words, a single ministry or province usually lacks the clout by itself to launch or sustain a large project or major new policy. Rather, that ministry or province will have to obtain the active cooperation of others, and this in turn may require that the appropriate coordinating body exercise considerable effort to sustain momentum. Second, the fragmentation of authority demands that elaborate efforts be made at each stage of the decision making process to create and maintain a basic consensus to move forward with the effort at hand. The fault lines in the structure of authority essentially contour the opportunities of each of many different units to obstruct adoption and implementation of a major project. Finally, the fragmentation of authority requires that one or more top leaders enthusiastically support the initiation of a major project or policy in order to overcome bureaucratic impasses at lower levels.

Consensus Building

Consensus building is thus central to the policy process. It is a subtle and complex matter in practice. The Chinese system, after all, does permit the top leaders to bring enormous pressure to bear to advance a project over the objections of key participants. Yet, progress can easily bog down in the bowels of China’s various bureaucracies, and most top leaders recognize the great advantages that are to be gained from obtaining the active cooperation of all the major parties concerned. This has, moreover, become increasingly important as a result of the reforms of the system that have occurred to date. For example, the top leaders are more reluctant to employ the tools that Mao and his colleagues wielded in the past to overcome bureaucratic lethargy and resistance—political campaigns, ideological broadsides, suppression of dissent, purge of recalcitrant individuals, deification of the top leader, and so forth. Relatedly, the reforms have increased the financial resources available for various units to undertake activities outside of the state plan. This has increased the opportunities for units to use their resources for their own benefit instead of concentrating their efforts on state-mandated activities. The reforms, therefore, have increased the importance of a consultative process in making decisions on large energy projects.

A consensus must thus be sought both vertically and horizontally in the system. Lower level units have important resources they can bring to bear, and wide ranging efforts are, therefore, made to strike balances that permit each major actor to support an effort or project with some enthusiasm. To an extent, as the case studies in Chapters Five, Six, and Seven reveal, energy policy results from an ongoing process of bargaining among units at all levels of the bureaucratic hierarchy. The territory available for cooperative development with foreign firms at the Antaibao coal field in Shanxi province, for example, was delineated in a complex deal struck between Shanxi and the Center. The arrangements available to foreign firms for servicing of the offshore oil exploration effort in the South China Sea arose from the bargaining between the Center and Guangdong province. The height of the proposed Three Gorges dam is affected by the bargaining among Sichuan province, Hubei province, other units, and the Center. Each of these provincial units, in turn, must strike deals with their own relevant prefectures, counties and municipalities.⁵⁴ Understanding energy policy decision making is, therefore, in substantial part a task of identifying and understanding the resources, arguments, and specifics of the pertinent bargains that are made to permit policies to be adopted and implemented.

A Diffuse Policy Process

Partly as a result of the segmentation, bargaining, and consensus building, the policy processes in energy development are quite diffuse.⁵⁵ That is, the process is protracted, with most policies shaped over a long period and acquiring a considerable history that is well known to many of the participants. It is disjointed, with key decisions made in a number of different and only loosely coordinated agencies and inter-agency decisional bodies. And it is incremental, with policy in reality usually changing gradually.

This diffuseness is manifest in four ways. First, the press of events and the pursuit of particular missions by different bureaucracies have precluded the formation and implementation of a single, coherent national energy policy and produced instead a plethora of distinct and somewhat contradictory policies to deal with various dimensions of the energy issue. Second, the development plans and investment budgets of the different energy ministries are, in the main, considered separately. The basic expectation in the Chinese budgetary process—and our interviews confirmed this repeatedly—is that a ministry would receive at least what it obtained the previous year for its operating expenses. However, investment allocations can vary significantly from year to year, and the alternative energy ministries therefore compete primarily over the changes in investment funds. Third, for the typical policy or initiative there is no single decision that determines the issue. Rather, a whole string of mutually reinforcing decisions are required in order to keep any one initiative on track—and the announcement of a decision in the national media tends to cloak this protracted process. A major decision, in brief, does not by itself ensure that the substance of the decision will be implemented. Relatedly, the search for the timing of a particular decision is often misplaced, for the process of making a decision is protracted, as a consensus for it is built. Indeed, on occasion, one or another leader will try to push forward the decision making process and mobilize support by announcing that a major decision has been made when in fact no such thing has occurred.⁵⁶ Fourth, the fragmentation of authority in China has important operational consequences for the way policies work their way through the system—and for the capacity of the system to handle different types of issues effectively. Thus, energy policy is subdivided into sectoral and particular issues; a decision itself is composed of a series of reinforcing decisions; and authority is fragmented in ways that produce substantial operational consequences for the decision making process.

The lack of a cohesive, consistent national energy development policy is quite evident. For example, there have been continual changes in the priorities to be accorded to the development of coal, petroleum, nuclear, and hydropower resources respectively. Comparable changes have taken place, moreover, within at least the coal and hydropower sectors. The mid 1980’s shift away from the development of large, open pit coal mines in favor of local mines, for instance, changed priorities that had been set as recently as the end of the 1970’s. With a commodity as critically important as energy, not surprisingly the national leadership has been unable to specify and sustain a single strategic plan for development. In this, the Chinese experience is reminiscent of that of most other major countries.⁵⁷ But any analysis of how policy is made in the energy sector must take into account the multiplicity of such policies and the almost constant contention over energy-related investment priorities.

The lack of a single decision point perhaps requires additional explanation. Any important policy requires a series of decisions in order to move it along. Even when the top twenty-five to thirty-five leaders launch a bold initiative, the document proclaiming it typically results from considerable staff work and prior circulation among the leaders. Frequently, the document is issued nationwide in classified form as a draft directive, which is then promulgated in final form months later, after national debate and the mobilization of support. With considerable publicity, the Center then announces its bold decision to move ahead in a particular direction or to undertake a major project. Such a decision to move in a given direction, which is called a fangzhen, serves important purposes. Studies can then be conducted to decide how best to implement the fangzhen, and supporters of the policy will be able to point to the high-level decision to help them overcome remaining bureaucratic obstacles. Nevertheless, a fangzhen—a decision on the general direction of bureaucratic activity—is not in itself sufficient to produce concrete results.

Actual activities are the result of concrete policies (zhengce) that are adopted in support of the general decision. These concrete decisions may take the form of including certain projects in the State Plan, adopting particular sets of implementing regulations, passing down specific orders for action, and so forth. There is usually a series of iterations of this process, where the initial zhengce prove inadequate and are supplemented by ever more refined administrative orders, regulations, directives, and instructions to achieve the broad task that has been articulated.⁵⁸

There are, then, important differences among decisions: to consider an initiative among the leaders; to announce the initiative; to enter the actual allocation of funds and commitment of material resources into the plan; and then to approve the pertinent construction schedules, regulations, and concrete measures to make the initial decision produce the desired outcome. Many of these subsequent steps require extensive bargaining among involved units. Any major project, for example, currently requires separate approvals of a feasibility study, a general design study, a technical design study, the construction plan, annual appropriations of funds and materials for construction, and so forth. The range of actors participating, moreover, varies according to the nature of the particular decision at issue. In this, the process resembles in some fashion that of the American Congress, where many major decisions must clear hurdles first in House and Senate Committees, then on the full floor of the House and of the Senate, then a joint conference, and then repeat this whole series in the appropriations process, to say nothing of the roles of the Executive and Judicial Branches. Certainly the nature and bases of these hurdles differ fundamentally between China and the United States. But in Beijing as much as in Washington, it is simply unrealistic to view a single act as constituting the sum and substance of the decision on a major issue or project.

The central leadership obviously is aware of this dynamic, and many central decisions, therefore, are evidently quite consciously viewed as steps in a process of mobilizing bureaucratic resources in a protracted effort to tackle a problem. Thus, central decisions often only set forth goals or prescriptions on what should be done. They do not bear close resemblance to the types of detailed implementing and regulating documents that frequently accompany high level decision making in the United States. In their scope and language, they may mislead foreigners into believing that the Central leaders in fact have more latitude on an issue than the leaders themselves know to be the case. The protracted bureaucratic negotiations that ensue from high level decisions often transform these bold initiatives into modest programs or turn them, in reality, into non-decisions.

Sometimes the essentially tentative nature of most decisions stands out in fairly bold relief. For example, as explained in Chapter Six, in both 1958 and 1984 the top leadership decided to build the Three Gorges Dam, but the supplementary decisions necessary to turn these major decisions into actual dam construction have not yet been forthcoming. And Chapters Five and Seven detail how the 1979 decision to enter into production sharing and risk contracts with foreign oil firms initiated a protracted process to give specificity to a new orientation in policy. In the past, the detailed information has been lacking to remind analysts of this fundamentally incremental dimension of the Chinese policy process.

Variation in Perspective and the Locus of Decision

We have already noted that a four tiered structure exists at the national level: the top 25 to 35 leaders; the personal staffs, leadership groups, research centers, and institutes that link the leaders to the bureaucracies; the supra-ministerial commissions which coordinate policy; and line ministries. Energy decisions can be made at any of these levels, with considerable consequence for the range of considerations that are taken into account. Two major analytical questions, then, concern the differences in perspectives among these levels—especially between the top leaders or the commission and ministerial level—and the factors which determine the locus of specific decisions.

The literature on national decision making in the United States has posited several distinctions that are pertinent to these questions.⁵⁹ According to this literature, the perspectives on a policy of importance to an official arise from a variety of sources. One is the bureaucratic position of the individual, a perspective summed up by the phrase where you stand [on an issue] depends on where you sit [in the bureaucracy]. This is the influence of current role: the official’s responsibilities and the ethos of his organization. A second major influence is the past experiences of the official, as these may have led him to some basic conclusions about risk taking, the reliability of certain kinds of information, the efficacy of various types of initiatives, and so forth, that can play a major role in shaping his views on the matter at hand. This is the effect of background. A third influence is the standard operating procedures of the organization, and a fourth influence is the shared definition in the national capital of the national interest. A fifth influence is the game of political power itself, stemming from the fact that political leaders deal with a wide range of issues and must employ tactics that permit them to retain the resources they consider necessary over the long run, often at the cost of advancing their preferred choice on a particular policy issue.

In China, these various determinants of perspective appear to vary in relative importance according to the level of the hierarchy. For the top 25 to 35 leaders, and especially for the preeminent leader, the generalists, and the elders (these terms are explained in Chapter Two), past experience, the game of politics, and concerns with the national interest have greater salience. Their roles as preeminent leaders, generalists, or elders necessitate their casting their policy preferences in national interest terms and expose them to conflicting bureaucratic positions. Here is where the policy and power approaches to Chinese politics acquire their rationale. For example, the past experiences of Chen Yun and his view of the national interest have led him to embrace quite strong and consistent views concerning the danger of deficits, the importance of holding the line on inflation, the utility of local markets, and the best means by which to