De Facto Federalism in China: Reforms and Dynamics of Central-Local Relations

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De Facto Federalism in China: Reforms and Dynamics of Central-Local Relations, by Zheng Yongnian. Singapore: World Scientific, 2007. xxvi + 429 pp. US$87.00/£47.00 (hardcover).

Zheng Yongnian argues that, by using a simplistic dichotomy between "unitary states" and "federalism", researchers looking at relations between the centre and local governments in China have failed to see that formal organizational changes have lagged behind important informal behavioral changes in these relations. He uses the concept of de facto federalism to describe this singular pattern (p. 29).

After explaining why the structural, procedural and cultural approaches to the study of central-local relations are lacking when each is taken individually, Zheng introduces the new institutional approach to provide an integrated approach for analyzing this central-local dynamics. In Chapter 2, he introduces the three institutions that he sees embedded in China's de facto federalism: coercion, bargaining and reciprocity. Chapter 3 argues that central-local relations have become increasingly reciprocal in the post-Mao era because of three factors. First, coalitions have emerged between reformers in the central government and local leaders, after the former implemented nationwide major reforms which the latter succeeded in initiating. Second, the reform era eroded the authority of central leaders in Beijing, reducing the role of Party ideology. Finally, a system of local elections gave legitimacy to local leaders.

In the three chapters that follow, Zheng looks at three case studies illustrating this pattern of reciprocity. He observes that the Jiangsu provincial government obtained considerable autonomy in de facto federalism but did not use this to adopt policies differing from those of the central government. This tacit understanding between the central and provincial governments was possible because both levels of government agreed on the goals of economic growth. One of the positive fallouts of that decentralization is that it convinced the central government that granting some measure of autonomy to the province did not have adverse consequences for the country's unity.

In the next chapter, Zheng looks at the relations between the central and Zhejiang provincial governments, but also at Wenzhou municipality, thereby adding a level of complexity and nuance to his study of decentralization. He shows that Wenzhou, a dynamic centre for the private sector up to the 1960s, departed the most from the socialist model, and therefore received little support from the central government at the beginning of the reform process, when the reformers' hold on the central government had yet to be entrenched. Zheng argues that, despite conflicts between the local government and the centre over the pace and the extent of reform, the central government did not reclaim the powers which it had delegated to the province, but instead provided incentives to local leaders to ensure their cooperation with the centre.

The third case study focuses on Guangdong, a province which gave great difficulty to the central government because of the strength of localism, and where a policy of recentralization has been applied more recently. The chapter explains the quandary the central government faces when trying to clamp down too harshly on localism: central leaders fear the risk of the political fragmentation inherent in strong localism, but they also recognize its importance in fostering economic growth. However, Guangdong, where the reassertion of central control remains to be firmly implemented, may represent an exceptional case.

In Chapter 7, Zheng looks at the options available to provinces lacking the resources and endowment of rich coastal provinces examined in his previous chapters. When provinces lack the resources to bargain, they may face difficulty in gaining support from the centre and in benefitting from reciprocity. In his study of the Economic Cooperation Association of Southwest China (ECASC), which includes Guizhou, Yunnan, Sichuan and Tibet, Zheng documents the strategy of collective bargaining adopted by provinces with little resources in order to obtain support from the centre. …