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УДК 338.2 ББК 65.05
Yan Jian
can fiscal pressure contain the self-expansion of township government? observations from 2004 township government reform in chengdu city1
Правительство Китая, столкнувшись с увеличивающимся потоком жалоб и протестов крестьянства, в 2002 г. начало сельскую налоговую реформу и в 2006 г. аннулировало сельскохозяйственный налог. Сельская налоговая реформа и аннулирование налога сказались на положении местных органов власти, особенно на правительствах малых городов, доход которых основывался на сельскохозяйственном налоге. Чтобы выйти из финансового тупика, центральное правительство начало новый раунд «кампании» и наметило в 2004 г. упростить управленческую структуру городов. Смогло ли финансовое давление сдержать саморасширение правительственных структур городов? В процессе полевых исследований 2009 г. в городе Чэнду, столице провинции Сычуань, автор нашел, что, хотя правительство города было значительно сокращено за короткое время, реформа не смогла препятствовать тому, чтобы масштаб правительственных структур города не восстановился. Сельская налоговая реформа действительно налагала ограничения на масштаб правительства города, делая его положение в финансовом отношении неприемлемо тяжелым. Согласно выводам автора, в конечном счете возобладала логика герметичной системы, которая заставила правительство города использовать возможность возврата к состоянию, близкому к исходному.
Key words:
tax reform, modern economic policy in China, agriculture, township government, Chengdu city
Background
In the history of the People's Republic of China (PRC), township government has always been the target of government reforms. Among these, the fiercest reform on township government was its replacement by People's Commune in late 1950s. Even after the reform and opening up, township government has still been the frontrunner of any government reforms in China. Since the reform and opening up, the frequency of township government reform has intensified. In the past three decades, China's township government has witnessed one round of reform after another, which greatly shaped the relationship between the local state and the rural society.2
Faced with the financial impasse after rural tax reform, the municipal government of Chengdu launched a new round of township government reform in 2004, only 3 years after its previous round in 2001. The 2001 reform was a response to the guidelines on government reform laid out by the 15 th CCP Party Congress and its major objectives were "cutting organs and decreasing the staff scale of township government". After the 2001 reform, about 50% of government organs were cut in the 333 township governments of Chengdu city, nearly 20% of staff in township government was condensed. By the April, 2001, more than 4600 employees of township governments were sacked in Chengdu city [2].
So, one would wonder: why was a new round of reform activated in 2004, only 3 years after
the 2001 large-scale township government reform in Chengdu? Is the 2004 reform a different one from 2001? What happened in township government between 2001 and 2004? Can 2004 reform contain the self-expansion of township government once for all? To answer these questions, we should have a closer look at the 2004 township government reform in Chengdu.
2004 Township Government Reform in Chengdu
On August 13, 2004, the municipal government of Chengdu released the document "Suggestions on Further Streamlining the Township Governments", which paved the way for a new round of township government reform in Chengdu. According to this document, the problems facing the township governments in Chengdu include fragmented jurisdictions, weak rippling effects on the countryside, overlapping of functions, overstaffing, low efficiency and fiscal deficit [8].
The objectives of the 2004 township government reform include transforming the functions of township government, streamlining the township government structure, reforming its fiscal management system and enlarging its jurisdiction.
By the end of2004, the reform has achieved some tentative goals: the number of township governments was reduced from 333 to 227; 205 party and government organs, 1028
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10 Table 1
2001 Township Government Reform in Several Counties of Chengdu City
County Administrative Organs (Xing-zheng Danwei) Public Organs (Shiye Danwei)* Number of Leadership Positions Administrative Staffs Staffs in Public Organizations Temporary Employees
Longquanyi 38 reduced 112 reduced 8 111 reduced 261 reduced 171 reduced
Shuangliu 5 organs for big town and 4 for medium town Unclear 5-8 for big towns and 4-7 for medium towns 30 staff for big town and 22 for medium town Unclear unclear
Wenjiang 4 organs for each Street (town) 6 organs for each street (town) 44 leadership positions reduced 84 reduced 105 reduced unclear
Pengzhou Unclear Unclear Unclear 145 reduced unclear 125 reduced
Source: 2002 Yearbook of Longquanyi, 2002 Yearbook of Shuangliu, 2002 Yearbook of Wenjiang and Sichuan Daily (September 14th, 2001).
* Public organs in China are government-sponsored organizations that provide public service to local residents-Notes of the author
administrative positions and 10994 positions in public organs were slashed. As a result, it's estimated that more than 73 million Yuan of government budget had been saved thanks to the reform.
Annexation of Township Governments
Before the reform, the average population and jurisdiction area of towns of Chengdu is only 24100 people and 36.57 square kilometers respectively and there are 37 towns whose population is below 10000. Under such circumstances, the economic volume of towns is considerably small, which hindered its economic rippling effect on the rural areas. Another reason for the annexation of township governments is to reduce the fiscal burden. More township governments mean higher administrative costs, which is becoming increasingly unsustainable after the rural tax reform since 2002.
Table 2
Changes in the Number of Township
Government in Chengdu (2003-2006)
Year Number of Township Government
2003 333
2004 227
2005 225
2006 223
Sources: Yearly Statistics of Chengdu City: 2004, Beijing: China Statistics Press, 2005; Yearly Statistics of Chengdu City: 2005, Beijing: China Statistics Press, 2006; Yearly Statistics of Chengdu City: 2006, Beijing: China Statistics Press, 2007; Yearly Statistics of Chengdu City: 2007, Beijing: China Statistics Press, 2008.
In August 2004, the party committee and municipal government of Chengdu initiated the campaign of annexing township governments. By the end of 2004, the campaign came to an end. The number of township governments shrank from 333 to 227. Towns with a population less than 10000 were reduced from 37 to 13. The average population and jurisdiction area of a town increased from 24000 to 32000 and 37.5 square kilometers to 49.7 square kilometers respectively.
Through the annexation of township governments, information, capitals, technology, land and other resources were much more integrated, which opened more space for the economic and social development of rural areas. On the other hand, however, it enlarged the gaps among different towns. For example, the population of Linqiong town of Qionglai city and Zhao town of Jintang county reached 149000 and 134000 respectively while the population of Longchi town of Dujiangyan city and Nanbao town of Qionglai city remained only 3600 and 4100 respectively.
With the annexation of township governments, it became more difficult for the newly enlarged township governments to effectively monitor the numerous village committees. To encounter this problem, the response from Chengdu municipal government is to annex villages at the same time. Another problem related to the annexation of township governments is the increasing transportation costs for peasants to handle their issues in the towns. As a countermeasure, Chengdu city established "Convenience House" in all villages. The peasants can present their requests and demands to the "Convenience House" and special agents will help the peasants handle those issues.
Table 3
Population Gaps among Different Towns after the Annexation in Qionglai City
11
Linqiong: 149 Gaohe: 12 Jiaguan: 19 Linji: 22 Wolong: 15 Sangyuan: 27
Baolin: 16.4 Qianjin: 25.7 Guyi: 32.7 Mouli: 54 Ranyi: 29.8 Huilong: 21.1
Shuikou: 5 Gaogeng: 19.8 Nanbao: 4.1 Kongming: 12.5 Youzha: 17 Chayuan: 13.1
Daozuo: 8.7 Datong: 17.7 Yangan: 41
Source: URL: http://www.qionglai.gov.cn Unit: 1000 People
streamlining the structure of Township Governments
China's government system is generalized by some Chinese scholars as a pressurized system [on the pressurized system of China, see: 4], in which the township government lies in the lowest ladder of the government hierarchy. On the one hand, the township governments have to cope with all kinds of directives, commands and orders from the higher authorities. On the other hand, the township government has been obsessed with clumsy and ineffective organs that expanded tremendously during the reform era. So under the pressurized system, it's rational for China's township governments to expand its organs and staff scales to respond to tremendous directives from higher authorities. Put it differently, China's pressurized system is just the underlying reason behind the clumsy, overstaffing and ineffective township government.
Hence, streamlining the structure of township governments is a focus of the 2004 reform in Chengdu. To curb the expansion of township party and government organs, Chengdu municipal government made corresponding ceilings: the numbers of party and government organs for the big, medium and small towns shouldn't be more than 5, 4 and 3 respectively (those towns with a population over 100000 can set up 6 organs). After the reform, 146 township party and government organs were slashed.
Table 4
Changes of the Number of Village Committees in Chengdu (2003-2006)
Year Number of VC
2003 4543
2004 3949
2005 2391
2006 2327
Sources: Yearly Statistics of Chengdu City: 2004, Beijing: China Statistics Press, 2005; Yearly Statistics of Chengdu City: 2005, Beijing: China Statistics Press, 2006; Yearly Statistics of Chengdu City: 2006, Beijing: China Statistics Press, 2007; Yearly Statistics of Chengdu City: 2007, Beijing: China Statistics Press, 2008.
However, the number ceilings of township party and government organs have always been overstepped in practice. For instance, the number of township party and government organs in Qionglai city is 123 in 2009, higher than its ceiling number of 117 in 2004. 10 township party and government organs were set up in Linqiong town (as stated above, the ceiling number for big town is only 6), including Community Service Center, Enforcement Squad, Office of Employment and Office for Letters and Visits. Even in Shuikou town, a very small town, 6 township party and government organs were established.
The rebounding of the number of township party and government organs proved that it's very hard to curb the self-expansion of township government under a pressurized system. Behind the rebounding of township organs lies in the difficulty to sack staffs.
Table 5
The Shrinkage of Township Party and Government Organs
District or County Number of Township Organs in 2001 Number of Township Organs in 2004 Organs Reduced
Longquanyi 47 42 5
Qingbaijiang 49 43 6
Xindu 66 59 7
Wenjiang 35 31 4
Dujiangyan 107 95 12
Pengzhou 116 103 13
Qionglai 133 117 16
Chongzhou 130 113 17
Shuangliu 114 100 14
Pixian 79 70 9
Jintang 122 108 14
Pujiang 64 56 8
Dayi 116 103 13
Xinjin 63 55 8
Total 1241 1095 146
Source: Chengdu Commission Office for Public Sector Reform: "Explanations on the g Reform Initiative of Further Streamlining the o Township Organs in Chengdu", May 5th, 2007 3 (unpublished) o
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Table 6
The Number of Township Party and Government Organs in Qionglai City (2009)
Linqiong: 10 Gaohe: 4 Jiaguan: 6 Linji: 6 Wolong: 6 Sangyuan: 6
Baolin: 6 Qianjin: 5 Guyi: 6 Mouli: 5 Ranyi: 5 Huilong: 5
Shuikou: 6 Gaogeng: 6 Nanbao: 5 Kongming: 5 Youzha: 5 Chayuan: 6
Daozuo: 5 Datong: 6 Yang'an: 6 Average: 5.8
Source: URL: http://www.qionglai.gov.cn
Fighting against overstaffing Problem
Overstaffing is an endemic problem for China's township government. How to effectively fight against overstaffing problem largely determines the fate of township government reform in China. The failure to effectively eradicate overstaffing problem in China's township government was blamed to be the key reason of the failed township government reforms since early 1980s.
The 2004 township government reform in Chengdu aimed to substantially resolve the overstaffing problem. Firstly, it attempted to reduce the number of leadership positions in township government. Chengdu municipal government stipulated that the number of leadership positions in township government shouldn't be more than 7, including 1 party secretary, 2 deputy party secretaries, 1 vice chairman of township people's congress, 1 mayor, 2 deputy mayors and 1 official in charge of military affairs. Under this arrangement, the mayor concurrently held the position of deputy party secretary and the party secretary concurrently held the position of chairman of township people's congress. By the end of 2004, 945 leadership positions at the township level were slashed across the township governments in Chengdu city.
Staffs in China's township government can be divided into two categories. One is administrative staffs (Xingzheng Renyuan), the equivalent of government employee in the western countries. The other is staffs working for various public organizations (Shiye Renyuan), which were set up to deliver all kinds of public services to the peasants, including, among other things, farming machinery, seeds, broadcast, cultural events, forestry and birth control. To reduce the scale of the administrative staffs and staffs working for various public organizations is crucial to address the overstaffing problem in China's township government. During the 2004 reform, Chengdu municipal government stipulated that the scale of administrative staffs in big, medium and small towns should be 26, 20 and 14 respectively. On the other hand, the scale of staffs working for various public organizations was restricted to 3-5. As a result, 1144 administrative staffs
and 8200 staffs working for various public organizations were sacked during the reform.
Before the reform, all township governments in Chengdu city hired a big quantity of temporary employees, who brought about heavy fiscal burdens. The 2004 reform sacked 2199 temporary employees hired by the township governments [see: 9]. To prevent the rebounding of the scale of temporary employees in the township governments, Chengdu municipal government even issued a directive, prohibiting the township governments to hire any new temporary employees since 2004.
One difficulty in addressing the overstaffing problem is how to arrange those people who were sacked in the reform process. It could trigger social tension if those people were not properly arranged. Thus, Chengdu municipal government had to strike a balance between reform and stability. During the reform proc-
Table 7
The Number of Leadership Positions at the Township Level (LPTL) in Chengdu
District or County Number of LPTL 2001 Number of LPTL 2004 Position Reduced
Longquanyi 93 59 34
Qingbaijiang 104 66 38
Xindu 132 85 47
Wenjiang 71 45 26
Dujiangyan 220 139 81
Pengzhou 233 148 85
Qionglai 275 173 102
Chongzhou 289 182 107
Shuangliu 238 149 89
Pixian 172 112 60
Jintang 245 156 89
Pujiang 140 89 51
Dayi 231 146 85
Xinjin 138 87 51
Total 2581 1636 945
Source: Chengdu Commission Office for Public Sector Reform: "Explanations on the Reform Initiative of Further Streamlining the Township Organs in Chengdu", May 5th, 2007 (unpublished)
ess, Chengdu municipal government provided social securities and welfare for those who lost their jobs due to the reform. However, it still remained a big challenge for the reformers. In some cases, many slashed staffs were eventually reinstated under various forms.
Another challenge for the reformers was how to prevent the rebounding of staff scale in the township government. It's really hard for the township government to keep the staff scale at an acceptable level, especially at a time when emergent issues broke out frequently in local areas. For example, a coal mine in Bailu Town, Pengzhou City, was hit by a powerful gas explosion, which left 19 people dead and another 11 wounded. Chengdu municipal government made an emergent notice and demanded that every township government must have someone who is fully in charge of work safety issues [6]. Due to the shrinking of staff scale, the township government sometimes had to neglect some subordinate functions in order to focus on the major work. Once this happens, the relevant departments at higher levels will give out notice or warnings. For example, the Coordination Committee for Work of the Disabled of Chengdu city required every township government should have at least one government staff that is responsible for the issues concerning the disabled, a response to the situation that the township government was previously paying too little attention to those issues. Moreover, the function expansion of the township government is another reason for the rebounding of staff scale. For example, to improve the environment quality of rural areas, Qingbaijiang District government required every township government should hire an environment observer, who would take charge of environment protection issues in their localities.
As it turned out in Chengdu, the rebounding of staff scale in the township government seemed irresistible. The number of administrative staff in the township government of Chengdu is 6151 in 2007, an average of 27.7 for each town, while the number ceiling of administrative staff for big towns was only 26 according to the 2004 reform plan. Meanwhile,
Table 8
Staffs Slashed in Wenjing District (2004)
Staff Position Slashed
LPTL 24
Administrative Staff 46
Staff in the Public Organs 195
Temporary Employees 80
Source: 2004 Yearbook of Wenjiang, Beijing: China Statistics Press, 2005
the number of staffs working for various public organizations has reached 5711 in 2007, with an increase of 1886 compared with the number in 2004 [1].
So it's not enough to focus only on streamlining the township government structure and slash government positions. What's more urgent is to change the nature of township government and transform its functions fundamentally. As Professor Wu Licai argued, "Without the function shift from extraction to service, the township government, even if less staffed, still consumes the resources extracted from the villages and remains a financial burden to the peasants. After the rural tax reform, the objective of township government reform is to accelerate the shift from extraction to service." [11, c. 5] In the 2004 township government reform, Chengdu municipal government also made some efforts to transform the functions of township government.
transforming the Functions of Township Government
Under the current pressurized system, the major function of township government is to implement directives and commands from higher authorities. According the Organic Law of Local People's Congresses and Local Governments, the major functions of township government include: 1) implementing resolutions by township people's congress and commands and orders by the higher authorities; 2) mandating the economic and social development and budget, and administering economy, education, science, culture, health, sports, finance, civil affairs, public security, justice, birth control and other issues under its jurisdiction; 3) protecting public properties and legal properties of citizens, safeguarding social order and protecting civil rights of citizens; 4) protecting the legitimate interests and rights of various economic entities; 5) protecting the rights of ethnic minorities and respecting their customs; 6) protecting the equal rights of women; 7) handling other issues handed down by the higher authorities [7]. It's palpable that the legal functions of township government focuse on regulation and control, i.e. implementing orders from the higher authorities, administrating economic and social issues and maintaining social order.
It should be noted that the "control-oriented" functions of township government met the demands of the "totalitarian state" existed during the Mao-era. Under the totalitarian system, the state power infiltrated into every corner of rural society and incorporated the peasants into a highly hierarchical system (the People's Commune), which finally resulted in
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"militarization of social live, administration of economic life and standardization of spiritual life."[11, c. 4] During this process, the township government (and its later variation "the People's Commune") fulfilled two basic functions: one is integrating rural society and the other is extracting resources from the villages.
With the kickoff of reform and opening up, the "totalitarian state" was dismantled and the state power began to retreat from rural society, which left considerable autonomy space for the peasants. Against such a background, the township government needs to shift its functions as well, i.e. from "control-oriented" functions to "service-oriented" functions. More often than not, with the deepening of rural tax reform and the final annulment of agriculture tax, the township government is facing stringent fiscal revenues, which prompted the higher authorities to launch new round of township government reform after another. More importantly, it also provided impetus for the function transformation of township government.
In order to transform the functions of township government, Chengdu city moved forward with the following steps:
Firstly, it made great efforts to standardize the fiscal relation between the county government and the township government. Under the pressurized system, the fiscal relation between county government and township government is obscure, which provided the former much latitude to divert its fiscal burdens to the latter. When the fiscal burdens go beyond the fiscal capability of township government, then it will have to divert it to the peasants. With the deepening of rural tax reform and annulment of agriculture tax, however, it becomes more difficult for the township government to extract extra resources from the villages, which made a large number of township governments fiscally unsustainable.
So it's logical that the township government under the pressurized system has to spare tremendous efforts to levy fees and extract resources from the villages, without tangible incentives to provide public service for the peasants. To address this issue, Chengdu municipal government introduced the system of "County Management of Township Budget", under which all revenues and expenses of the township government will be under the constant monitor of the county government. Through clarifying the functions of county government and township government, safeguarding the administrative expenses of township government and standardizing transfer payments, a tentative public finance framework was established in Chengdu city, which
paved the way for the function transformation of the township government.
Secondly, it established a consistent public service delivery system. Through a series of programs, Chengdu municipal government dramatically reduced the urban-rural gap in terms of public service delivery. A lot of government organizations extended their functions to the rural area. Meanwhile, Chengdu municipal government has put into tremendous resources to improve the infrastructure of rural areas. 1.9 billion Yuan was injected into the villages to improve the infrastructures including revamp of 410 middle schools, 223 township public hospital, 2396 village health centers and expansion of cable TV network etc [5]. The establishment of a consistent public service delivery system calls for the transformation of township government functions. For example, among the 59 public services the government promised for the peasants, 38 were provided by the county and township governments [3].
Thirdly, it deepened democratic governance at the township level. The transformation of township government functions can hardly be achieved without the political participation from the peasants. Under the pressurized system, the higher authorities controlled tremendous resources and the promotion chance for cadres, which enabled the former to enjoy the compliance of township officials. Put it differently, under a pressurized system, the township government will be definitely responsible to the higher authorities. However, the transformation of township government functions called for democratization. Only by empowering the villagers will the township government be possible to become accountable to the villagers.
In the 2004 reform, Chengdu municipal government placed grassroots democracy and inner-party democracy as two cornerstones of transformation of township government functions. Since 2003, some pilot experiments on "public recommendation and direct election of township party secretary" were conducted in Chengdu city. By the end of 2007, over one third of township party secretaries in Chengdu were selected through "public recommendation and direct election", which greatly enhanced the participation of ordinary villagers and improved the democratic governance of rural area. In order to make the township party secretaries more accountable, Chengdu municipal government also introduced the system of "democratic evaluation of township party secretaries" in 2007. Through opinion polls and "democratic evaluation meetings", the voices and preferences of ordinary villagers were channeled into the evaluation process of township party secretaries, which largely enhanced
the accountability of township party secretaries and township government as a whole.
Concluding remarks
The 2004 township government reform in Chengdu city made great strides in annexation of township governments, streamlining township government structure, slashing superfluous staffs, transforming township government functions and deepening democratic reforms in rural area. Most of the reform measures substantially improved rural governance in Chengdu. By examining the 2004 township government reform in Chengdu city, we can have a deeper understanding of the progresses and limitations of China's township government reform as a whole.
Firstly, outside pressure is an important factor in the transformation of township government. The township government is located at the intersection of the state and the rural society. Hence, it's especially sensitive to the changes occurred both in the state and the rural society. Thus, outside pressure always plays an important role in stimulating township government reforms. As it turned out in Chengdu, the rural tax reform and the annulment of agriculture tax made the township government fiscally unsustainable, which to a large extent propelled Chengdu municipal government to initiate the township government reform in 2004.
Bibliography:
[1] Chengdu Commission Office for Public Sector Reform, "Some Explanations on the Proposal to Further Streamline the Township Government". - 2007, May 8th, unpublished.
[2] More Than 4600 Cadres Slashed in Chengdu // Sichuan Daily. - 2001, May 6 th.
[3] Party Committee and Municipal Government of Chengdu: "Suggestions on Further Balanced Urban-Rural Development and Improving the Public Service and Social Management of Rural Area" (trial) // Chengweifa.
- 2008, № 37.
[4] Rong Jingben [et al.] The Transformation from a Pressurized System to a Democratic Cooperative System.
- Beijing: Central Compilation and Translation Press, 1998.
[5] Sunping. The Experience of Chengdu in Urban-Rural Balanced Development, unpublished speech.
[6] The General Office of Chengdu Municipal Government, «An Emergent Notice to Attach Greater Importance to Work Safety» // Chengbanfa. - 2004, № 195.
[7] The Organic Law of Local People's Congresses and Local Governments // Xinhua News Agency. - 2004, October 27th.
[8] The Party Committee and Municipal Government of Chengdu, «Suggestions on Speeding up the Balanced Development and integration of Urban and Rural Areas» // Chengweifa. - 2004, № 7.
[9] Chengdu Government. - URL: http://www.chengdu.gov.cn/newsrelease/listjsp?id=60314
[10] Wu Licai. Township Government Reform: How Can It Break the Circle of 'Deflating and Rebounding' // Journal of Guizhou Normal University. - 2000, № 6.
[11] Wu Licai. Township Government During Governance Transition / PHD dissertation. - Huazhong Normal University, 2006.
Secondly, the problems entangling China's township government stem from the nature of China's political system. More specifically, under the current pressurized system, the township officials are only responsible to the higher authorities rather than to the local peasants. What's more, under the current pressurized system, the township officials are propelled to extract more resources from the rural society and become more or less predatory. Hence, those problems China's township government faces cannot be resolved without changing the current pressurized system. In Chengdu, the fiscal pressure can only temporarily keep the scale of township government at an acceptable level. The rebounding of township government scale demonstrated that such measures were far from enough.
Lastly, democratization is the only way forward for China's township government. Strictly speaking, the problem of China's township government is not its big scale, but its lack of accountability to the local peasants. That's why Chengdu municipal government has attached great importance to the transformation of township government functions during the 2004 reform. Democratization is the only proved way to make political power responsible to its origin, the citizens. Chengdu's reform also convinced us, though arduous and filled with possible setbacks, both necessary and possible in today's China.
1 The author is a research fellow at China Center for Comparative Politics & Economics. The author thanks Professor He Zengke, Professor Yang Xuedong and Doctor Liu Chengli for their valuable comments. Any fault in this paper is his. The author can be reached at [email protected].
2 The central government launched five rounds of township government reform campaign since the reform and opening up. Each round of reform has different focuses and tasks, such as "streamlining government and decentralizing" (1986), "transforming government functions" (1992, 1998), "restricting staff, function and spending" (2000) and "releasing the financial burden" (2004). In 2009, the Central Staffing Department (zhongbianban) announced that a new round of township government reform will be activated. On the history of township government reform after the reform and opening up, see [10].
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