A village election in Shidong town, Guangdong Province, China (Picture Credit: The Carter Center/ Jian Yi | Carter Center Slideshow (2006))
In February, the ruling Chinese Communist Party (CCP) proposed edits to the 1982 Constitution that would remove language limiting the president’s service to two five-year terms. The proposal was successfully adopted in March and allows 64-year-old President Xi Jinping to stay on indefinitely in all three of his roles: President, General Secretary of the CCP and Chairman of the Central Military Commission (though the last two never carried a term limit).
The change has been met with consternation by many Western media outlets, and pro-democracy groups in Hong Kong have denounced the CCP’s actions as contributing to a “one-man imperialistic rule.” As one Forbes pundit noted with bemusement, the media reacted as though “China had been a vibrant liberal democracy and Xi had suddenly staged a coup.”
Critics say that realistically, the move is less about President Xi’s desire to impose dictatorship in modern China and more about the determination of the CCP that China continue as a one-party nation, a goal that should surprise no one. The dialogue around President Xi’s role too often paints Chinese governance as fairly one-dimensional, and fails to highlight other elements that shape the national agenda, such as local government structures.
Despite the lack of international attention, local governments are an incredibly significant part of the Chinese economic and political landscape. China has 33 provincial territories: 22 provinces, 5 autonomous regions, 4 municipalities (including Beijing and Shanghai) and 2 special administrative regions (Hong Kong and Macao). Additionally, there are 2,461 counties, as well as 660 ‘county level cities’, that are overseen by provincial authorities and mediate between the state and local populations. The importance of these local levels of governance has grown in the last few decades, especially as economic reforms have granted them additional power.
Dr. Ho Bing Shin of the London School of Economics points out that the decentralization of the Chinese government since 1978 in combination with the subsequent rise of increasingly autonomous localities have played a significant role in spurring the massive economic growth of the last few decades. Furthermore, Chinese local governments are far from homogenous identities controlled by the centralized Communist Party — they are idiosyncratic entities, both demographically and politically.
In the last few years, a common challenge for local governments has come to light: sustaining growth. In an effort to continue their upward trajectories, local governments have been borrowing money, and lots of it. Local government debt (estimated at ¥16 trillion) is now a serious worry for President Xi and the CCP, who must balance the pressing need to curb this debt with the desire to keep local governments satisfied and functioning. This mission is complicated by the fact that local governments only receive 50% of collected taxes, yet are responsible for as much as 80% of area government expenses. Concerns that debt is much higher than reported have contributed as well, highlighting the potential inaccuracy of Chinese economic data.
At the same time, local governments have largely maintained their prominence and continue to transition away from administrative duties in favor of the provision of services. The pursuit of a stronger social safety net to assist China’s aging population has largely occurred at the local level. These reforms also aim to include improved disaster relief mechanisms, a measure sorely needed as rates of natural disasters continue to rise.
Local governments influence China’s global relationships as well. The last decade has seen a dramatic increase in foreign investment in China. Companies hoping to operate in the country quickly realize the necessity of forming powerful, resilient relationships with local offices, which are known to exercise authority in many sectors, from product approvals and import regulations to land use and marketing directives.
The influence of localities is not a 21st century phenomenon. For example, the modern system of care found in China today stems from reforms that began at the district level in Shijiazhuang district of Hebei province. The progressively socialized model of care that began in Hebei was later endorsed by the national government and adopted on a larger scale.
All of this is not to say that local governments are irreproachable or isolated agents — they certainly follow and implement directives handed down by the national government. Many local politicians have been discredited by President Xi’s anti-corruption campaign and concerns about the extent of the shadow-financing worlds of localities are serious.
In addition, the challenge of managing social services continues to grow and with it, mounting debt — local borrowing has tripled since 2007. Decentralization has fostered local innovation and experimentation, yes; but it has also contributed to the financial risk and hardship that many localities face.
China is one of the world’s leading superpowers and is home to roughly 20% of the world’s population. It is certainly important to discuss President Xi and his administration. However, it is equally important to engage in nuanced, critical dialogue. Those who aim to contribute to the conversation must not forget the prominence of local governments in shaping China’s future.