Ethnoregional Disparities, Fiscal Decentralization

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2008 January

Ethnoregional Disparities, Fiscal Decentralization and Political Transition: The Case of China

Émile Kok-Kheng Yeoh

(Paper presented at the ChinaWorld International Conference at the Institute of China Studies, University of Malaya, "Implications of a Transforming China: Domestic, Regional and Global Impacts", 5-6 August 2007)

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Ethnoregional Disparities, Fiscal Decentralization and Political Transition: The Case of China

Dr Émile Kok-Kheng Yeoh Institute of China Studies University of Malaya Malaysia [email protected]

ABSTRACT If federalism could be seen as a degree of decentralization, centralization would not be inconsistent with federalism; in other words, federalism could be centralist, depriving states of their rights. By broadening the federal concept to include the quasi-federal systems and those where the constituent states are characterized by their subordination to the centre (the “nonfederal”, though somewhat contradictory in terms), students of federalism have long noted the social and political forces that created varieties of federalism and concluded that federalism was a variable response to opposing demands for the dispersal and concentration of power, on specifically a territorial basis. Hence, decentralization could be seen as a variant of centralization that in turn, means the concentration of power in only one central authority. Decentralization represents the dispersal of power from this central authority to other centres of power which could be functional or territorial units. China, for instance, while highly centralized, has a public finance system that carries strong features of fiscal federalism. While it is a tendency for large countries, which tend to be diverse in the ethnic make-up of their populations and have large interregional differences in terms of demand for government services, to decentralize for various reasons, including the large diseconomies of centralized management, China has unmistakably stood out as an anomaly. This paper is an attempt to look closely at the interplay of various crucial aspects of this Chinese puzzle – ethnic fragmentation, ethnoregional disparities, the State’s regional policy, fiscal structure and reform, and political transition.

Keywords: China, ethnicity, region, poverty, fiscal federalism, political change

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Introduction In the government document “Scientific Concept of Development and Harmonious Society” that formed the theme of China’s 17th National Congress of the Communist Party, 2007 (15th–21st October 2007), it was reiterated that “[t]o coordinate development among different regions, we should promote the common development of all regions. Regional gaps are not only found between eastern China and western China, but also between provinces, autonomous regions and municipalities directly under the central government. This problem should be gradually addressed in the course of industrialization, urbanization and market development.” 1 While brief, this statement reflects the probably understated concern of the ruling regime of the People’s Republic of China over the widening gap in economic development between eastern and western China, between rural and urban population, and between different social strata.

The size of China both demographically and geographically has led to the fact that her regional policy is always overshadowed by a host of complex interlinked socioeconomic, political, ethnic, territorial and historical factors. A three-region demarcation has been followed since the Jiang Zemin administration introduced the “Develop the Western Region” strategy.

Table 1

Three Economic Regions of China

Eastern coastal

Central

2

11% of China’s total land area, 39% of China’s total population. Transport condition advantageous, technological foundation relatively good, regional innovation capability strong. Existing problems are shortages of energy and raw material. There is urgent shortage of land in some places because too many lands are sold too early at low prices. 18% of China’s total land area, 33% of China’s total population. Rich in water resources and nonferrous metal reserve. Appropriate position and important transport location. Agriculture advanced. Gap in comparison with eastern region in terms of level of economic development. In recent years’ development lagged behind eastern and western regions. Besides,

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Western *

especially heavy population pressure led to an economic structure that relied mainly on the export of labour and energy, raw material. 71% of China’s land area, 28% of China’s total population. Immense region. Low population density. Fragile habitat environment. Overall level of economic development backward. Nevertheless, important in regional geostrategic status and potential advantage in its rich mineral and energy resources.

* Includes Guangxi (originally “eastern”) and Inner Mongolia (originally “central”). Source: Hu 2005: 259, footnote 1.

The western region of China is usually divided into the northwest and southwest. The northwest constitutes 32 per cent of the country’s total land area, hence tops the six major regions in an oft-used six-region scheme (eastern, central south, north, northeast, southwest, northwest) in land area, but its population constitutes only 7 per cent of the national total, and in terms of population density it has only 31 persons per km2 – far lower than the national average. Tucked deep in China’s hinterland, the southwest constitutes more than 24 per cent of China’s land area (just smaller than the northwest), occupying the second place in China’s six major regions. Its population is 15.7 per cent of the national total, just next to the eastern and central south regions, occupying the third place. (Hu 2005: 511, 557)

Regional Policy and Poverty Such problems in development that China is facing today are the same ones that many other developing countries are experiencing in the second half of the last century and now at the beginning of this century. In general, China’s amelioration of the poverty problem has been nothing less than remarkable. In 1978, China’s population in poverty totaled 250 million. Entering the new millennium, poverty has been reduced to 29.27 million in 2001, 28.2 million in 2002 and 29 million by 2003, with the incidence of poverty having declined Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

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from 30 per cent to just 3.1 per cent, according to official figures. (IDE Spot Survey 2001: 54, Table 1; Chen 2006: 174)

There are four characteristics typical of the distribution of poverty population in China: 1. Concentration in the mountainous areas. 2. Concentration in the western region. 3. Concentration in environmentally fragile areas. 4. Concentration in ethnic minority areas.

Out of the 29 million people in absolute poverty in 2003, 15.5 per cent were in the eastern region, 35.5 per cent in the central region, and 49 per cent in the western region. Areas with incidence of poverty less than 1 per cent were all located in the eastern region. Guangxi, Sichuan and Chongqing were the only places in the western region with incidence of poverty between 1 and 5 per cent. Inner Mongolia, Yunnan, Shaanxi, Gansu, Ningxia and Xinjiang were places in the western region with incidence of poverty between 5 and 10 per cent. All areas with incidence of poverty above 10 per cent were in the western region, viz. Guizhou, Tibet and Qinghai. Rural population with income of 637-882 yuan per annum are officially classified as the low-income group. In 2003, those in the lowincome group totaled 29.46 million just within the poverty counties alone. (Chen 2006: 175, footnote 1) Combining the rural poverty population and the low-income group, the number in 2003 totaled 85.17 million, of which 40.14 million (47.1 per cent) were in the western region, 31.2 million (36.6 per cent) in the central region and 13.83 million (16.2 per cent) in the eastern region. (ibid.: 176, Figure 7-2) The regional dimension of poverty has left an impact on the fiscal capacities of the regional governments as can be seen in Tables 2–4

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and Figure 1. It is also noticeable out of the 5 poorest provinces, zizhiqu (“autonomous regions”) and zhixiashi (municipalities directly ruled by the central government), 4 are in the western region, 1 central.

Table 2 China: Fiscal and Economic Concentration in Rich# and Poor# Provinces (sheng), Zizhiqu and Zhixiashi, 2004 %

Five richest provinces, zizhiqu and zhixiashi * Percentage of GDP

25.70

Percentage of population

13.35

Percentage of government revenue

36.96

Percentage of government expenditure

27.06

%

Five poorest provinces, zizhiqu and zhixiashi ** Percentage of GDP

8.73

Percentage of population

17.22

Percentage of government revenue

8.80

Percentage of government expenditure

12.37

#

by GDP per capita * Beijing, Zhejiang, Tianjin, Shanghai, and Guangdong. ** Guizhou, Gansu, Guangxi, Yunnan, and Anhui. Source: Yeoh 2006a: 8, Table 3 (computed with data from China Statistical Yearbook, various years).

Table 3 yuan)

Government Revenues of Eastern and Western Regions (hundred million

year Revenue of western region Revenue of eastern region

1999

2000

2001

2002

2003

2004

1029

1127

1301

1430.5

1649.5

1982.9

3321.6

3947.0

5005.7

5458.2

6356.1

7458.2

Source: Indicators of the Overall Moderate Well-being of the Farming Villages in the Western Region of China 2006: 61, Table 4-7.

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Table 4 China: Population, GDP, Government Revenue and Expenditure by Region (2004) Region

Population

492510000

GDP per capita (yuan) 19351

Government Revenue per capita (yuan) 1514

Government Expenditure per capita (yuan) 2119

Ratio of Government Revenue to GDP (%) 7.83

Ratio of Government Expenditure to GDP (%) 10.95

Eastern Central

430370000

9376

523

1168

5.58

12.46

Western

371270000

7430

534

1383

7.19

18.61

Source: Computed with data from China Statistical Yearbook.

Figure 1

China: Government Revenue and Expenditure by Region, 2004 (a) Revenue

(b) Expenditure

Western 17%

Central 19%

Western 25%

Eastern 64%

Eastern 51% Central 24%

Source: Computed with data from China Statistical Yearbook.

Central-Regional Relations Since 1949, although China’s central government has consistently sought to exercise strong control over the country, it has at times done so by decentralist rather than centralist policies. The Dengist policies since economic reform began, for example, have had a strongly decentralist element, with continuing devolvement of control to the provincial governments. Paradoxically being unitary yet highly decentralized, the government apparatus and fiscal system of China begins from the central level, down to the levels of the provinces/zizhiqu/zhiziashi 2 , prefectures, counties, and townships. The 6

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subnational

governments

totaled

around

fifty

thousand

units,

viz.

31

provinces/zizhiqu/zhixiashi 3 , 333 prefectures, 2148 counties and 48697 townships. Besides the five administrative units listed above, there is also the village as an informal level of government. In a highly centralized country like China, a subnational government is but an extension of the central government and their legitimacy is derived directly from the central government. Classical developmental State model emphasizes the importance of State capacity, defined as “the ability of a government in getting its job done and includes its capacity to mobilize society, to extract resources, to steer development and to legitimate the regime” (China National Capability Report 1993: 235, cited in Xia 2000: 2).

Figure 2

China’s Hierarchically Ordered Budget Levels

Central Government

Provinces 27

Townships 31600

Zhixiashi 4

Prefectures 127

Municipalities/cities 206

Counties 1735

Municipalities/cities 413

Town 16400

Source: Rao (2003: 27).

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From the political perspective, the success of the model in maintaining State capacity depends mainly upon two crucial institutional arrangements, viz. the suppression of local autonomy and the negligible role of legislatures (Xia 2000: 2). Nevertheless, in the case of China, the Dengist reforms began with decentralization and legislative development. During the decades of reform, subnational governments were conferred with regional property and autonomy, and legislatures at both the central and local levels were encouraged to expand their institutions and power (ibid.: 3). Thus, on the level of institutional arrangements, China deviated in two important aspects from the other East Asian developmental states, according to Xia, who termed the China model “dual developmental state”:

[T]his “dual developmental state” [...] has a two-tiered structure in which the developmental role of the central state is nested within the context of the central/local synergism. Reform-minded central leaders, for a long time led by Deng Xiaoping, have encouraged local leaders to explore new policies and experiment with ideas in order to generate experiences and learn lessons. But since local leaders have come to need a mandate from the center, the central state and local states have formed an interdependent relationship. The mutual needs of both levels of the governments have helped to establish and maintain an equilibrium over the past two decades, despite the oscillating nature of the central and local power relationship. (ibid.: 3) In China’s central-regional relations, the central government is responsible for macroeconomic management, foreign affairs, national defense, customs, post and communications, etc. Responsibilities for protection, urban development, finance, civil affairs, ethnic affairs, justice, supervision and population planning were shared between the central government and the subnational government. The main means of administration were the “rule of law” and executive orders. National laws and executive orders from the State Council overrule those from the subnational governments, and the

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central government demanded full compatibility of local rules to the national ones. Despite such strictures on paper, throughout the 1980s, the central government in reality delegated a large number of authorities to the subnational governments, and sometimes this turned out to be more beneficial to the subnational authorities than to the central government. Under the guidelines of decentralization, some subnational authorities were conferred with the rights for their own budgets and to manage their own finance. While the powers to determine tax bases and tax rates lied totally in the hands of the central State, the subnational governments did have considerable manoeuvrability in making public expenditure decisions, with around 70 per cent of government expenditures being incurred at the subnational levels.

Permission to experiment with a financial responsibility scheme similar to the rural household responsibility system, for instance, was given to the coastal provinces of Guangdong and Fujian in 1979. This financial responsibility scheme includes measures to draw up set figures of revenues and expenditures, to submit set quotas of revenues to the central coffers, and to set five-year quotas. There were negotiations between parties regarding terms and numbers. Such base figures were set as the minimum financial obligation for these provinces.

What are the benefits of such “negotiated” arrangements? From the point of view of the central government, its tight budget status would improve with ensured revenues from the subnational governments. From the point of view of the subnational governments, they would benefit from the additional revenues that they could collect above the quotas, i.e. if they managed to do so with their aggressive reform policies. Spearheaded with the provinces of Guangdong and Fujian, from the year 1985 this experimentation came to be

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adopted for the whole of China, in particular with the series of “open and reform” policies for the coastal region to “get rich first”, giving these subnational governments crucial incentives and great revenue sources for economic development. While the subnational governments had no authority at all over the structure of their expenditures before the Dengist economic reforms, such authority was conferred to them by the central government within a broad set of guidelines. Central government ministries could no longer issue mandatory spending targets for the provinces, while the latter also gained the authority to make decision upon fiscal arrangements with the sub-provincial government within their respective jurisdictions (Oksenberg and Tong 1991, cited in Jin, Qian and Weingast 2005).

Besides governmental devolution, another mainstay of Deng’s decentralization was the caizheng chengbao zhi (fiscal contracting system) – also described as fenzao chifan (eating from separate stoves) – since 1980 that aimed at providing subnational governments with fiscal incentives that hardly existed under the Maoist system of tongshou tongzhi (unified revenue, unified spending) – commonly known as chi daguofan (eating from one big wok).

Under the new fiscal contracting system, the subnational governments were conferred with authority over their local expenditures, while the local revenues – all revenues other than the central fixed revenues comprising mainly custom’s duties, direct taxes and profit remittance from SOEs supervised by the central government – were shared between the central and provincial governments. Jin, Qian and Weingast (2005) gave these examples of such pre-determined sharing schemes that evolved through the three phases of 19801984, 1985-1987 and 1988-1993 before the fiscal reform was launched in 1994: 10 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

Guangdong’s remittance was a fixed annual amount of 1 billion yuan 4 during 1980-1987, and a fixed amount that increased by 9 per cent per year during 1988-1993; Guizhou’s a fixed share of revenue to the central government; while Guizhou was to receive fixed subsidies with an annual increment of 10 per cent. In fact, many provincial governments retained over time the full amount of their total local revenue at the margin.

In recent years, the “neo-corporatism” hypothesis emerged to claim that while the traditional Leviathan hypothesis from the school of public choice reappeared in Russia in the form of the “grapping hand” hypothesis, China is instead characterized by a “helping hand” (Krug and Zhu 2004; Frye and Shleifer 1997; Shleifer and Vishny 1994, 1998; Oi 1992, 1995, Unger and Chan 1995, Nee 2000; summarized in Krug, Zhu and Hendrischke 2004). The “helping hand” and the “grabbing hand” were said to be the same “invisible hand on the left” described by Olson (2000):

When there exists an encompassing interest, it is logical for the government to use its power, at least to some degree, in accord with the social interest. The invisible hand on the left becomes the helping hand which would support productive investment, promote business activities, or simply, not to grab or grab in an orderly way. However, the constructive use of power by the second invisible hand can be shifted to the destructive use when narrow interests replace the encompassing interest. The helping hand would then turn into the grabbing hand. (Gu and Chen 2002: 7) Gu and Chen’s analysis with a multiregional econometric model found that “[w]hen local revenue share rises, the helping hand of local government becomes stronger and further leads to promotion in local economies and subsequently the national economy. When the centre increases its revenue share and adopts other recentralization measures, local governments become losers and switch from helping to grabbing hand.” They came to the

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conclusion that in China, “the corruption of the helping hand when taxes are decentralized can be socially preferable to the corruption of the grabbing hand when taxes are centralized.” (ibid.: 25)

Such quota scheme also gave rise to the unintended result that the southern coastal provinces were growing less and less willing to comply with directives from the central government, increasingly reflecting the age-old Chinese dictum: shan gao huangdi yuan (“the mountains are high and the emperor is far away”). Cook and Murray (2001) gave a scenario in which “the erosion of sovereignty via such combined pressures as globalization, new regionalism (based partly on newly emerging elite groups) and ethnic dissent, would lead to China fragmenting” (Cook and Murray 2001: 90):

Rich regions like Guangdong and Fujian might attempt to break away from the centre to form a South China state with Hong Kong and Taiwan in order to maintain their economic prosperity, while poor regions would become poorer with the possibility of social unrest and even civil war. (Cook and Li 1996: 213) Cook and Murray added to this scenario the possible secession of Xizang (Tibet) and Xinjiang (Eastern Turkestan), resulting in the China proper shrinking to a rump centred on the Huang He (Yellow River) and Yangzi Jiang (Chang Jiang) deltas (Cook and Murray 2001: 93).

Farfetched it might seem to be, such “China deconstructs” nightmare scenario does underline the long-term worries of China’s rulers over the impacts of decentralization since Dengist reforms began. The disintegration of the Soviet Union in December 1991 serves further as a premonition of bad days to come. After all, China is the world’s only former

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empire that has not disintegrated as have, all in the 20th century, the Ottoman, AustroHungarian, the Western maritime empires, and the Russia empire (later, the Soviet Union). The only ethnic region that managed to break away from China is Outer Mongolia that formed the independent Mongolian People’s Republic in 1924, with Russian support, though not recognized by China until 1946. 5 (Yeoh 2006b: 228)

However, it still seems unrealistic to have predicted China’s political collapse and disintegration based on the observation of such decentralization:

… on a purely fiscal basis, a zero-sum tilting of revenues towards the localities away from the center can be identified. But does this mean that the center has lost the political capacity to hold its sub-national units together? Not necessarily. Ultimately, the monetary division of the fiscal pie is only one dimension of central-local relations. From a more nuanced perspective, we can see that fiscal decentralization has been accompanied by local state-building as localities have taken on functions formerly performed and financed by the center. In other words, local governments have grown bureaucratically in size and extended their administrative reach to lower levels in the process of providing new services and collecting revenues to finance these services. By 1985, for example, the average number of government agencies at the provincial level exceeded the number of central agencies for the first time in PRC history. Yet growth in the institutional density of local governments has not come at the expense of the central party-state’s political authority […] the center has retained the authority to appoint top provincial officials who therefore serve as agents of the center rather than being captured by local interests. This nomenklaturabased power over the allocation of personnel explains why the center has generally been able to enact macroeconomic stabilization policies that go against the short-term economic interests of certain localities. (Tsai 2002: 26-27)

Unity has been the greatest concern of the generation that holds dear to the conviction that China’s shameful defeat at the hands of Western and Japanese colonizers would never be allowed to be repeated, and that, though not often explicitly stated, high degree of regional autonomy especially in the non-Han regions like Tibet and Xinjiang could be

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the prelude to separatism and pave the way to China’s disintegration 6 , as the cases of the former Soviet Union and Yugoslavia have amply attested to. When the former Taiwanese (“Republic of China” 7 ) president, Lee Teng-hui, came up with his theory of “China in seven blocks” 8 , he was widely vilified not only in Mainland China, but also among the Chinese community leaders overseas 9 .

Lee’s idea was proposed in a book 10 he published in May 1999 towards the end of his presidency. Lee wrote that the ideal situation is when China is finally able to throw off the yoke of Great Sinism 11 and allow comprehensive autonomy for regions with diverse cultures and differing degrees of development. Lee believed that competition among these seven regions for progress and prosperity would auger well for a more stable Asia. The proposed regions include Taiwan, Xizang (Tibet), Xinjiang (Eastern Turkestan), Mongolia (Inner Mongolia), the Northeast – as stated in Lee’s book – and two more region understood to be Jiangbei (north of the Yangzi River) and Jiangnan (south of the Yangzi River).

Lee’s proposal instantly caused uproars both in China and the overseas Chinese communities. His detractors wasted no time to show their disgust at his audacity to so explicitly proposing the splitting of China. He was crowned with the unenviable title of a stooge of the Western and Japanese anti-China forces. The fact that Lee said before twenty-two years old he had considered himself a Japanese and the media published his photograph wearing a kimono did not help, given the painful memory both in China and in the overseas Chinese communities 12 of the unspeakable inhumanity the Japanese military committed against the Chinese populace during its 1937-1945 invasion and occupation of China and Southeast Asia. On the other hand, those who came to Lee’s defense stressed 14 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

that Lee, as the first popularly elected president of the first human rights-respecting liberal democracy in the five millennia of Chinese history and the first native Taiwanese Chinese to become Taiwan’s head of state – “who successfully guided the Taiwanese people into full democracy through an election-led, gradual and peaceful process that some international observers have praised as a ‘quiet revolution’” (Wakabayashi 1999: 91) – was not proposing China’s disintegration, but administrative decentralization through conferring regional autonomy for economic development.

Figure 3

China, Taiwan and ASEAN: Political Rights and Civil Liberties

Notes: 1 is the best rating, 7 the worst. Ratings are for 1st December 2005 – 31st December 2006. * Xizang (Tibet) Zizhiqu (”autonomous region”), China + Hong Kong Special Administrative Region (SAR), China Source: Data from Freedom in the World 2007.

Lee’s proposal might have had its origin in an earlier book by Wang Wen-shan 13 . Wang advocated breaking up China into seven parts – not seven regions, but seven independent countries. Wang’s rationale is that a China with 1.3 billion people could never become a

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democratic country. The best way to avoid the resurrection of the ancient Chinese empire was to let China disintegrate into several smaller Chinas peacefully, voluntarily and rationally, stated Wang. It has been said that Lee was deeply impressed by Wang’s book and recommended it to many people including his officials in-charge of cross-Strait relations. He also showed the book to the Japanese writer Fukada Yusuke during the latter’s visit to Taiwan and suggested a Japanese translation. Fukada brought it back to Japan and got a Japanese version out in 1997 called, more provocatively, “Seven Chinas”, published by the Bungeishunju. This was not the first time the breaking up of China was suggested in Japan in recent years. Taking France as having the optimal country size, Japan’s China expert Nakashima Mineo had earlier suggested dismantling China into twelve blocks, viz. Tibet, Mongolia, Xinjiang, Manchuria, Taiwan, Hong Kong, Macau, eastern China, southern China, western China, northern China and central China. Another Japanese China expert Miyazaki Masahiro also asserted in 1995 that the post-Deng China would split into 16 small states forming a federal system.

Decentralization and Local Autonomy It is a tendency for large countries in the world to decentralize for various reasons, including the large diseconomies of centralized management. Moreover, large countries tend to be diverse in the ethnic make-up of their populations and have large interregional differences in terms of demand for government services.

The decentralization of government operations has often been seen to be a possible response to diverse preference, as well as a solution to the difficulty in reaching collective decision in a diverse society (Tiebout 1956; Wallis and Oates 1988). However, such

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argument rests upon the assumption that groups of people with similar preferences are able to sort themselves into relatively homogeneous communities with different local governments. In the case of ethnic diversity, this possibility is reflected in countries where separate ethnic groups are uniquely concentrated into separate regions (e.g. Switzerland, Spain, Belgium). Here, political decentralization and fiscal federalism can allow each group to determine its own preferred level of public output. More precisely, the real extent of a country's ethnic division along regional lines both physically and psychologically, is measured by the degree of sectionalism, defined by Banks and Textor (1963: 88) as "the phenomenon in which a significant percentage of the population of a nation lives in a sizable geographic area and identifies self-consciously and distinctively with that area to a degree that the cohesion of the polity as a whole is appreciably challenged or impaired". Furthermore, while “‘racial’ – meaning phenotypical – differences are only skin deep, ethnic boundary as a process … tends to be tenacious and uncompromising, the manifestation of the age-old fourfold ascriptive loyalty of race, territoriality, language and religion” (Yeoh 2006c: 224). Although ethnic diversity is not an exclusive feature of developing countries like China, it is nevertheless critically relevant to them, since economic deprivation or desperate poverty “unduly heightens sensitivities and breeds a general atmosphere of unreasonableness and distrust, making it immensely more difficult to attain solutions to outstanding problems on the basis of a reasonable give and take” (Vasil 1984: 1-2).

China’s Ethnic Diversity In terms of ethnic composition, China’s is undeniably highly homogeneous – 0.125 in an ethnic diversity scale of 0 to 1 (Yeoh 2003) 14 . However, due to the abnormal size of

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China’s population and in particular the size of China’s citizens of the Han ethnicity, a distortion or misrepresentation has to be recognized in the application of this EFI to China as the country’s large populations of minorities (about 110 million in total, including the 16 million Zhuang, 10 million Manchu, 9 million Hui, 8 million Uyghurs, 5 million Mongols and 5 million Tibetans) are practically dwarfed almost to invisibility by the sheer size of the Han population, as is evident in Table 5. It is obvious that the issue of "numerical significance" cannot be the sole criterion involved in the anomaly of China. A real picture of China’s ethnic mosaic will only emerge as one goes beyond such national-level statistics to examine the country’s sub-national units whose degrees of ethnic diversity are shown in Table 6 and Figure 4.

Table 5

China: Ethnic Composition – The National Picture

1

Han

92%

29

Tu

0.019%

2

Zhuang

1%

30

Mulam (Mulao)

0.017%

3

Manchu (Man)

0.9%

31

Xibe (Xibo)

0.015%

4

Hui

0.8%

32

Kirghiz (Kirgiz)

0.013%

5

Miao

0.7%

33

Daur (Tahur)

0.0107%

6

Uyghur (Uygur)

0.68%

34

Jingpho (Jingpo)

0.0106%

7

Tujia

0.65%

35

Maonan

0.0086%

8

Yi

0.63%

36

Salar (Sala)

0.0084%

9

Mongol

0.47%

37

Blang (Bulang)

0.0074%

10

Zang (Tibetan)

0.44%

38

Tajik

0.0033%

11

Bouyei (Buyi)

0.239%

39

Achang

0.00273%

12

Dong

0.238%

40

Pumi

0.00271%

13

Yao

0.21%

41

Evenki (Ewenki)

0.0025%

14

Chosŏn (Korean)

0.151%

42

Nu

0.0023%

15

Bai

0.15%

43

Kinh (Vietnamese)

0.0018%

16

Hani

0.12%

44

Jinuo (Jino)

0.0017%

17

Kazakh (Kazak)

0.1007%

45

De’ang

0.0014%

18

Li

0.1005%

46

Bonan (Bao’an)

0.0013%

18 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

19

Dai

0.093%

47

Russki (Russian)

0.00126%

20

She

0.057%

48

Yugur (Yugu)

0.0011%

21

Lisu

0.0511%

49

Uzbek (Ozbek)

0.001%

22

Gelao (Gelo)

0.047%

50

Moinba (Menba)

0.00072%

23

Dongxiang

0.041%

51

Oroqen (Olunchun)

0.00066%

24

Lahu

0.037%

52

Drung (Dulong)

0.0006%

25

Sui (Shui)

0.033%

53

Tatar (Tartar)

0.00039%

26

Wa (Va)

0.03%

54

Hezhen (Hezhe)

0.00037%

27

Naxi

0.0249%

55

Gaoshan

0.00036%

28

Qiang

0.0246%

56

Luoba (Lhoba)

0.00024%

Source: Computed with data from the 2000 population census.

Table 6 China: Ethnic Diversity by Province (sheng), Zizhiqu and Zhixiashi (Ethnic Fractionalization Index) Rank

Province/Zizhiqu/Zhixiashi

EFI

Rank

Province/Zizhiqu/Zhixiashi

EFI

1

Qinghai*

0.633

17

Hubei

0.085

2

Xinjiang* (Uygur Zizhiqu)

0.629

18

Hebei

0.085

3

Guangxi* (Zhuang Zizhiqu)

0.620

19

Beijing (Zhixiashi)

0.084

4

Guizhou*

0.581

20

Tianjin (Zhixiashi)

0.053

5

Yunnan*

0.543

21

Fujian

0.034

6

Ningxia* (Hui Zizhiqu)

0.456

22

Guangdong

0.029

7

Inner Mongolia* (Mongol Zizhiqu)

0.344

23

Henan

0.025

8

Hainan

0.317

24

Zhejiang

0.017

9

Liaoning

0.295

25

Shandong

0.014

10

Hunan

0.191

26

Anhui

0.013

11

Jilin

0.175

27

Shanghai (Zhixiashi)

0.013

12

Gansu*

0.165

28

Shaanxi*

0.010

13

Xizang/Tibet* (Tibetan Zizhiqu)

0.133

29

Jiangsu

0.007

14

Chongqing* (Zhixiashi)

0.125

30

Shanxi

0.006

15

Sichuan*

0.097

31

Jiangxi

0.006

16

Heilongjiang

0.095

* provinces, zizhiqu, and zhixiashi now classified as the “western regions” Source: Computed with data from the 2000 population census.

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Figure 4

Ethnic Diversity Map of China

Notes: Officially designated Western Regions in bold italics. East-West Boundary. Source: Computed with data from the 2000 population census.

It can be noted in Table 5 and Figure 4 that the top seven regions in the ethnic diversity 15 rankings are regions now classified as western under the “Develop the West” (xibu dakaifa) strategy. They include four of the five ethnic zizhiqu of China. Xinjiang – one of the two politically most volatile regions of the country (the other being Tibet) – tops the list. To further understand the ethnic mosaic of China, see Table 7 and Figure 5 that indicates the proportion of each ethnic group in the country’s sub-national units (only those groups that are not lower than one per cent are shown). 16 While the current “Develop the West” strategy would cover many minority zizhiqu (“autonomous regions”) whose majority population are ethnolinguistically and/or ethnoreligiously distinctive from the Han Chinese

20 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

central State, the plan has always been understood to be a political process to allocate pieces of the economic pie to the local governments in the western regions but not about political decentralization (Yeoh 2006b: 243-244). Table 7

China: Ethnic Distribution by Province (sheng), Zizhiqu and Zhixiashi +

Province, zizhiqu and zhixiashi

Ethnic distribution

1

Qinghai*

Han 54%; Tibetan 23%; Hui 16%; Tu 4%; Sala 2%; Mongol 2%

2

Xinjiang* (Uygur Zizhiqu)

Uyghur 45%; Han 41%; Kazakh 7%; Hui 5%; Khalkh 1%; Mongol 1%

3

Guangxi* (Zhuang Zizhiqu)

Han 62%; Zhuang 32%; Yao 3%; Miao 1%; Dong 1%

4

Guizhou*

Han 63%; Miao 12%; Buyi 8%; Dong 5%; Tujia 4%; Yi 2%; Gelao 2%; Shui 1%; Bai 1%

5

Yunnan*

Han 67%; Yi 11%; Bai 4%; Hani 3%; Dai 3%; Zhuang 3%; Miao 2%; Hui 2%; Lisu 1%; Lahu 1%; Wa 1%; Naxi 1%

6

Ningxia* (Hui Zizhiqu)

Han 65%; Hui 34%

7

Inner Mongolia* (Mongol Zizhiqu)

Han 79%; Mongol 17%; Manchu 2%; Hui 1%

8

Hainan

Han 83%; Li 16%; Miao 1%; Zhuang 1%

9

Liaoning

Han 84%; Manchu 13%; Mongol 2%; Hui 1%; Korean 1%

10

Hunan

Han 90%; Tujia 4%; Miao 3%; Dong 1%; Yao 1%

11

Jilin

Han 91%; Korean 4%; Manchu 4%; Mongol 1%

12

Gansu*

Han 91%; Hui 5%; Tibetan 2%; Dongxiang 1%

13

Xizang/Tibet* (Tibetan Zizhiqu)

Tibetan 93%; Han 6%

14

Chongqing* (Zhixiashi)

Han 94%; Tujia 5%; Miao 2%

15

Sichuan*

Han 95%; Yi 3%; Tibetan 2%

16

Heilongjiang

Han 95%; Manchu 3%; Korean 1%

17

Hubei

Han 96%; Tujia 4%

18

Hebei

Han 96%; Manchu 3%; Hui 1%

19

Beijing (Zhixiashi)

Han 96%; Hui 2%; Manchu 2%

20

Tianjin (Zhixiashi)

Han 97%; Hui 2%; Manchu 1%

21

Fujian

Han 98%; She 1%

22

Guangdong

Han 99%; Zhuang 1%

23

Henan

Han 99%; Hui 1%

24

Zhejiang

Han 99%

25

Shandong

Han 99%; Hui 1%

26

Anhui

Han 99%; Hui 1%

27

Shanghai (Zhixiashi)

Han 99%

28

Shaanxi*

Han 100%

29

Jiangsu

Han 100%

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21

30

Shanxi

Han 100%

31

Jiangxi

Han 100%

+

Decimals are rounded to the nearest. Ethnic groups below 1 per cent are not shown. * provinces, zizhiqu, and zhixiashi now classified as the “western regions” Source: Computed with data from the 2000 population census.

Figure 5 China’s Ethnic Map – Major Ethnic Groups by Province (sheng), Zizhiqu and Zhixiashi

Notes: Mg = Mongol; T = Tibetan; U = Uyghur; Z = Zhuang Only ethnic group > 10% are shown 17 . Officially designated Western Regions in bold italics. East-West Boundary. Source: Computed with data from the 2000 population census.

22 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

Ethnoregional Dimension of Poverty In 2000, of the 592 poverty counties – including 257 ethnic minority poverty counties – 62 per cent were concentrated in the western region. Of the 32.09 million poor in 2000, more than half were among the ethnic minorities or in the ethnic minority areas, totaling 17 million people. Not much had changed by 2003, where out of the national figure of 29 million people in poverty, 16.98 million or 58.55 per cent were in the 12 zizhiqu and provinces of the western region. (China Ethnic Minorities Development Report, 2001-2006: 235) Hence, it is discernable that there is a trend of gradual concentration of the poor towards the western region and the frontier, and towards the ethnic minorities. Estimation of the extent of absolute poverty among the ethnic minorities ranges from 40 per cent of the total population as estimated by researchers in China to 60 per cent as estimated by Nicholas Stern of the World Bank. In view of the fact that ethnic minorities only constitute 8.41 per cent of China’s total population, that 40 to 60 per cent of China’s poor come from them is indeed alarming. (ibid.)

The dominant component of the rural poor is the ethnic minorities. Out of the 592 poverty counties, 267 (44 per cent) are ethnic minority counties. Among the poor of the national focal poverty assistance counties of year 2003, 46.7 per cent were ethnic minority areas, with incidence of poverty of 11.4 per cent that was higher than those of the mountain areas (10.1 per cent), hilly areas (7.1 per cent), old liberated areas (7.7 per cent), the plains (7.8 per cent). Among the provinces/zizhiqu, 80 per cent of the 4.59 million poor of Guizhou were ethnic minorities; almost all of the 3.1 million hard-core poor of Guizhou were ethnic minorities. In the mountain areas of southern Ningxia, 60 per cent of the 520 thousand poor were Hui; 85 per cent of Yunnan’s 4.4 million poor and more than 90 per cent of

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Tibet’s 250 thousand poor were also ethnic minorities. (Chen 2006: 177) In fact, out of the country’s 2.9 million poverty population, 45 per cent or more than 1.3 million were in the minority areas. Among the 22 ethnic minorities with population less than 100 thousand, totaling 630 thousand, 394 thousand were in absolute poverty or low-income category. (Wu 2006: 15)

Official figures by end of 2004 showed that ethnic minority areas’ rural hard-core poor constituted 47.7 per cent of the national total, incidence of poverty was 5 percentage points higher than the national, population with low income constituted 46 per cent of the national total, proportion of low-income population in rural population was 9 percentage points higher than the national figure, hard-core poor plus low-income population constituted 46.6 per cent of the national total, and the proportion of absolute-poverty plus low-income population in rural population was 14 percentage points higher than the national figure. Almost 80 per cent of China’s ethnic minorities are found in the country’s western region, especially the rural areas. China’s northwest with about 20 different ethnic minorities and total minority population of more than 15 million and southwest with more than 30 ethnic minorities and total minority population of more than 29 million being the country’s two areas with the most complex ethnic composition and the largest number and most concentrated ethnic minorities, the geographical coincidence of ethnic minority distribution (largely populating the frontier areas) and poverty population distribution is unmistakable, hence reflecting the composite phenomenon made up of rural poverty, geographical poverty, ethnic poverty and frontier poverty. (Nie and Yang 2006: 153)

24 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

China’s Degree of Decentralization Going back to the issue of decentralization, it can be noted that Bahl (1998: 73) listed the following benchmarks on the requirements for effective decentralization: 1) elected local council; 2) locally appointed chief officials; 3) locally approved budget; 4) absence of mandates as regards local government employment and salaries; 5) possibility for local governments 18 to exert control on the level of some revenue sources; 6) local governments having some powers to borrow; 7) the grant system being transparent and local governments understanding their entitlements; 8) expenditure assignment being clear; 9) local governments having the capacity to collect taxes and deliver services efficiently; 10) local governments keeping adequate books of account; 11) the central government having the ability to monitor the progress of effective fiscal decentralization.

Measured against these benchmarks, Bahl noted that in China: 1) there were elections, but not popular elections; 2) chief provincial and local government officials were appointed by the next highest level of government; 3) local authority budgets did not require approval, but total revenues were fixed by the centre; 4) guidelines were provided by the central government; 5) local governments might choose whether or not to levy certain taxes or charges, but the rates and bases of nearly all taxes were beyond their reach; 6) local governments might not borrow directly; 7) the grant system was ad hoc, with the central government deciding on the retention rates under the sharing system and on the distribution of earmarked grants; 8) expenditure assignment was relatively clear to local government officials; 9) local governments varied widely in their capacity to deliver services effectively, with problems arising mostly because of limited revenues and shortage of capital and skilled employees; 10) the professional and technical ability of the

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staff in many local authorities was below the

level needed to produce accurate and

meaningful accounts, though in some provinces the capacity was quite strong; 11) there was a fiscal planning unit that deals with intergovernmental fiscal relations in the Ministry of Finance, but there was no strong underlying data system to support the work of the staff.

Centrifugal Forces and the Threat to the Central State While political decentralization was not the State’s agenda, the advent of the 1990s somehow brought heightening uneasiness in the ruling regime with the increasing economic strength of several southern coastal provinces increasingly alluded by foreign observers as de facto “kingdoms” – as some observers wryly noted: “the center pretends to rule and the provinces pretend to be ruled” 19 . The threat of China’s disintegration loomed increasingly large for the politburo behind the high walls of Zhongnanhai 20 , amidst the overseas “China deconstructs” doomsayers’ claim that China would fragment into a host of “smaller Chinas” under the combined pressures of globalization, new regionalisms and ethnic dissent, as the continuing devolvement of control to the provincial governments was predicted to lead to the reassertion of old regionalisms 21 and the development of new regionalisms – the latter owing much to increased local autonomy, rapid economic growth and increasingly globalizing trade and business linkages.

The fact is that the central government in the early 1990s lacked the financial means to arrest this tendency, having to rely upon revenues from the subnational governments while facing increasing expenditure demands for an expanding budget. In addition, the quota scheme under the contracting system in practice had created problems of interregional

26 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

inequalities and financial burden imbalance. Quota negotiations were often difficult bargainings involving favours and special terms and were always a bane for the central government. To the Beijing government, the decentralization that has been going on since the beginning of reform in 1978 has financially weakened the hand of the central government, besides growing worries over the widening inequalities between the increasingly prosperous coastal regions and the inland regions that were left behind that had all the potentials to lead to instabilities that could threaten the Communist Party’s monopoly of political power, when even official figures admitted that the gap between the ethnic regions and the advanced eastern region was expanding, with Shanghai’s and Guangdong’s respective annual average growth rates of 13.11 per cent and 13.97 per cent for the 2000-2004 period exceeding the 13.05 per cent of the ethnic regions, and the annual average growth rate of Guangdong’s total import-export exceeding the ethnic regions by 9 percentage points for the same period (China Ethnic Minorities Development Report, 2001-2006: 64).

Spectre of Interregional Imbalance: The Environmental Dimension The concentration of the poor in the western region is related to the fact that the povertystricken mountainous areas are concentrated in the western region. The country’s 64.8 per cent of poverty-stricken mountainous areas and 56.2 per cent of the hilly areas are found in 10 provinces/zizhiqu/zhixiashi of the western region, occupying 72.9 per cent of the total area of the region, with mountainous areas alone taking up 53.1 per cent. The most mountainous provinces are the three southwest provinces of Sichuan (including Chongqing), Yunnan and Guizhou, with mountainous areas taking up 72 per cent, 80.3 per cent and 80.8 per cent of the respective total areas of the said provinces. If inclusive of the Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

27

hilly areas, the figure rises to 95 per cent for Yunnan and Guizhou, and 97.5 per cent for Sichuan. (Chen 2006: 176; original source: China Mountainous Areas Development Report 2003: 246-247) Out of the 592 poverty counties 22 , 366 are in the western region, and out of these 366 counties, 258 are in remote mountain counties, occupying about 70 per cent of the western mountain counties. Most of these poverty counties are distributed over 6 major areas of fragile environmental habitat, viz. Inner Mongolian plateau’s southeastern border area that suffers from desertification, Huangtu plateau’s gully area that suffers from severe soil erosion, the environmentally deteriorating mountainous areas of the Qin Ba region, the environmentally endangered hilly areas of the karst plateau, the sealed-off mountain and valley areas of the Hengduan range and the severely cold mountain areas of the western deserts. Being environmentally fragile, all these are areas extremely short of resources, with extremely bad environment for human habitation. (Chen 2006: 177)

There are three main issues in the western region’s environmental degradation: soil erosion, desertification and receding grassland. Major symptoms like the increasingly serious Huanghe (Yellow River) drought since the 1990s, the severe flood of mid-Yangzi River in 1998, and the almost yearly spring sandstorm since 2000 all pointed to the critical stage of environmental degradation of the western region. Up to 80 per cent of the country’s total area of soil erosion, 81.43 per cent of the area of desertification and 93.27 per cent of the area of receding grassland are in the western region. (ibid.: 19; original source: China Regional Development Report 2000) Of all the provinces/zizhiqu/zhixiashi (not including Chongqing), seven have area of soil erosion exceeding 100000 km2. Other than Shanxi, all of these provinces/zizhiqu are in the western region: Sichuan, Inner

28 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

Mongolia, Shaanxi, Xinjiang and Gansu. Soil erosion in the southwestern region is also serious. The desertification of farmland in the western region involves a total area of up to 1.1 million hectares. While this is only 2.24 per cent of the total area of farmland in the western region, it contributes to 43.24 per cent of the national total area of desertification of farmland – that suffering from light- and medium-degree desertification is 87.95 per cent of the national total area; that suffering from high-degree desertification is 12.05 per cent of the national total area. Provinces/zizhiqu in the western region particularly severely hit by desertification are Xinjiang, Qinghai, Gansu and Tibet. (Chen 2006: 20)

With the “Develop the West” strategy inevitably aiming at exploiting the rich natural resources (water, nonferrous metal, petroleum, natural gas etc.) of the western region, both to promote the region’s economic growth and enhance the living standard and welfare of the region’s inhabitants, and to meet the energy needs of the country as a whole, in time there could arise the inherent contradiction between environmental protection and the basic aim of xibu dakaifa that cannot be ignored.

Illiteracy, Illness and the Poverty Trap An important factor that is behind such differential is the educational level of the labour force. The western farming region in general suffers from the problem of shorter schooling years and hence the relatively high percentage of illiteracy and semi-illiteracy in total labour force. In the year 2002, 11.7 out of every hundred people in the western region are illiterate or semi-illiterate, those with only primary education constitute 36.53 per cent, lower secondary 42.48 per cent, upper secondary 7.39 per cent, middle tertiary (zhongzhuan) 1.57 per cent, higher tertiary (dazhuan) and above 0.33 per cent. In terms of

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illiteracy and semi-illiteracy and those with only primary education level, the western region far exceeded the eastern and central regions, while in terms of those with higher education levels the western region lagged far behind the eastern and central regions. This problem was particularly serious in the ethnic regions like Tibet and Qinghai. The illiterate constituted 58.42 per cent of Tibet’s labour force, those with only primary education 41 per cent, those with only primary education or lower 99.42 per cent, far exceeding the national average of 37.75 per cent (Indicators of the Overall Moderate Well-being of the Farming Villages in the Western Region of China 2006: 71-72)

In fact, relatively high illiteracy has always been a problem for China’s non-Han nationalities, and is adversely affecting the development of minority areas. While official figures show that the minorities’ adult (age 15 years and above) illiteracy rate had fallen remarkably from 30.68 per cent in 1990 to 14.54 per cent in 2000, the latter was still 5.46 percentage points higher than the national level of 9.08 per cent, and the illiterate adults (10995.8 thousand people) among the minorities constituted 12.64 per cent of the China’s total illiterate adult population (China Ethnic Minorities Development Report, 2001-2006: 231). The problem was worse for the female adults of the minorities, with an illiteracy rate of 20.41 per cent, compared to 8.92 per cent for the male (ibid.). According to the 2000 official figures, only 10.59 per cent (11065.2 thousand) of the total minority population had had higher secondary schooling and above, i.e. 4.08 percentage points lower than the national figure of 14.67 per cent; while 2.49 per cent of the total minority population had had higher tertiary (dazhuan) education and above, i.e. 1.06 percentage points lower than the national figure of 3.54 per cent (ibid.). The above figures actually reflect the basic problem of the backwardness of foundation education among the minority nationalities.

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Official statistics show that there are 13 minority nationalities with years of schooling less than 5, the lowest being the Dongxiang (a Muslim minority) with just 2.6 years (ibid.). Furthermore, with lower level of health service and hygiene and standard of living, the ethnic minority areas of western China also suffer from high risk of local diseases and epidemics like AIDS, high infant mortality rate and lower health. While the national average life expectancy in 2000 was 71.40 years, the official figure was 67.41 in Xinjiang, 66.03 in Qinghai, 65.96 in Guizhou, 65.49 in Yunnan and 64.37 in Tibet, respectively, which ranked the five lowest in life expectancy among the provinces and zizhiqu of China (ibid.).

On the other hand, maternal death during pregnancy/delivery in western China is higher than 200 per 100000, four times above national urban average and more than double the national rural average. It was reported that in 1998 maternal death during pregnancy/delivery in Tibet was 431.6 per 1000000, Guizhou 191.1, Qinghai 190.6, Xinjiang 191.7 and in 2004 the figure for Gansu was 79.47 per 100000, far higher than the national average of 51 per 100000. (Nie and Yang 2006: 301)

The Resource Dimension The importance of the western region to the central government is undoubtedly underlined by the fact that it is endowed with rich mineral resources. Almost all of the world’s known mineral resources can be found in China’s western region. Of China’s 155 mineral resources with already known reserve volume, 123 are found in the western region. Of the 60 major mineral resources, western region’s 33 mineral resources contribute to more than half of the national reserves. According to the forecast of the country’s geology and mineral department, China’s largest long-term coal reserve is in Xinjiang, with long-term

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reserve volume up to 2.19 trillion tons, and of this, the shallow reserve (within 1000 metres) volume alone is already up to 900 billion tons. (China Regional Economic Development Strategy Study 2003: 121) The already known exploitable reserve volume of petroleum in the western region is almost one-fifth of the national reserve, that of natural gas is about 35 per cent, and that of water resource is 77 per cent of the national, while already 82 per cent of the national volume of hydro-electric power is from the western region. It was forecasted that by 2010, western region’s coal, petroleum, natural gas etc. will be adequate to guarantee the country’s economic development or exports. The western region is poised to become China’s important reserve base of strategic resources. (ibid.) For instance, recently, In September 2007, the largest gold mine in Asia was found in Wen county, Gansu province, with a reserve of 308 tons or about 500 billion yuan, capable of producing annually 10 tons or 16 billion yuan. 23 The poor province of Gansu as the treasure trove of China, though sounding paradoxical, is indisputable. More remarkably is the large mineral reserves in the ethnic minority area of the province. In the ethnic minority area that constitutes just about 38.7 per cent of the Gansu province, the confirmed mineral reserves consist of 68 types, at more than 630 locations (Chen 2004: 84).

Extrabudgetary Funds – A Final Note on Fiscal Decentralization The preceding discussion has pointed to the fact that China represents an anomaly, being the most populous country in the world and one of the largest in land size facing undeniable problems of ethnoregionalism and challenges of ethnoterritoriality exacerbated by issues of poverty, socioeconomic inequalities and developmental imbalance, yet continuing with a highly centralized formal political and fiscal structure, the latter especially

32 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

after the recentralization with the 1994 fiscal reform. Before 1994, the Dengist reforms gave the regional governments an opportunity to find their way to fiscal autonomy, through the “backdoor” no less, but often with the consent of the central government. The 1994 reform made this no longer possible. Yet, paradoxically, despite being so unitary in structure, China’s fiscal system could still, to date, be considered highly decentralized, owing to her tradition of decentralization below the provincial level stemming from close government-enterprise interaction at the county and township levels, giving local governments significant control over fiscal resources despite the fact that taxation powers rest mainly with the central government (Rao 2003: 26). From the fiscal point of view, one thing that continues to provide considerable autonomy to the subnational governments is the important role played by the extrabudgetary funds, which is also a source of much abuse and corruption. China’s extrabudgetary revenues (yusuanwai shouru), comprising tax surcharges and user fees levied by the central and subnational government agencies and earnings from the State-owned enterprises, is a product of the economic reforms although its existence can be traced back to the 1950s. Central-local sharing schemes do not apply to such extrabudgetary local revenues although the central government could levy taxes on them.

Besides the extrabudgetary revenue, there is also the zhiduwai shouru (extraestablishment revenue) that is collected by government departments and organizations for their own expenses. There are no official statistics on the EER, and no established rules governing its collection that has been described as the san luan (“three wantons”) – luanshoufei (wanton collection of fees), luanfakuan (wanton imposition of fines) and luantanpai (wanton raising of funds) – and mostly strongly associated with the grapping

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hand (Gu and Chen 2002). Given the predatory nature of the rampant san luan regulations afflicting businesses and citizens as well as their erosion of the central government’s tax capacity, a programme of feigaishui (taxes for fees; converting fees into taxes) became the first major effort in China’s fiscal reform. However, the effectiveness of fiscal reform alone without accompanying genuine political reform could be questionable, as Pei (2002: 4-5) cautioned:

The deterioration of state capacity is both fiscal and political […] Bad as it is, the country’s dysfunctional fiscal system conceals the larger political issue: the state’s fragmenting authority and progressive loss of control over local governments. The causes of this erosion are complex. To the extent that economic decentralization enhances local political power, the erosion is perhaps inevitable. Moreover, economic reform requires administrative decentralization, another factor in the decline of the central government’s authority.

Fiscal Reform and Political Decentralization The most striking difference between China and the decentralized systems in many Western countries is the absence of popular representation in the former. We have observed earlier the lack of political will to decentralize and similar lack of support for such crucial, not only fiscal but inevitably also political, reforms even among influential leaders in overseas Chinese communities, and the uproar Lee Teng-hui’s proposal of seven autonomous regions has caused. Given China’s ethnoregional dimension – where the large western regions are inhabited mainly by non-Han minorities that deeply distrust the Han-dominated central State, political reform along the federal, and even consociational, line could be crucial. It is not accidental that decentralized countries in the West, especially those that are ethnically diverse, have tended to adopt a consociational type of political system. Beijing has indeed been emphasizing the democratization of rural governance

34 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

since the National People’s Congress passed the “Village Committee Organic Law of the PRC (Experimental)” in 1987 that introduced the direct election of the directors, deputy directors and members of the villagers’ committees, and the recent years saw the geographical expansion of such villagers’ committee elections, with 929 counties across China covering Tianjin, Hebei, Shanxi, Inner Mongolia, Fujian, Jiangxi and Shaanxi holding such elections in the year 2003 (Zheng and Lye 2004). Nevertheless, such village committee election should not be taken as a sign that China is taking the first step in political reform moving towards multiparty liberal democracy. In fact, the country’s leadership has never made any pretension that this is so. Promoting such rural elections in 1987, Peng Zhen had argued that such elections could be used to help the Chinese Communist Party govern the country’s rural areas and perpetuate the Party’s rule (ibid.). 24

To the Western accusation that China’s so-called “political reform” is nothing but a ruse since political reform in an authoritarian state should mean democratization and that China is copying a bad Singaporean model 25 to develop its own version of neo-authoritarianism, combining free market economy with a dissent-muzzling one-party rule, China’s answer usually goes along the line like the West should recognize China’s specific national conditions and give due respect before China could reach the Western standards in human rights and democracy. The fact is, the so-called “political reform” in China “is not designed to decrease the power of the Party, but rather to increase it” (ibid.), and fiscal decentralization has not translated into political decentralization, as Tsai concluded: … post-Mao reforms have revitalized political and economic institutions that became moribund during the Cultural Revolution. As such, it is inaccurate to claim that fiscal decentralization has translated symmetrically into political decentralization, and it would be misguided (or at least premature) to diagnose political collapse on this basis. We can conclude, however, that economic growth in reform-era China has occurred unevenly under conditions of extensive

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local governmental intervention in the economy, fiscal decline in the center, and political uncertainty in intergovernmental relations. Rather than the emergence of a single, market-oriented pattern of national economic development, remarkable developmental diversity persists at the local level. On balance, China is off balance. (Tsai 2002: 27-28)

To place the case of China in proper global perspective, it should be noted that UNDP figures showed that while about 41% (52) of the countries (127) worldwide had adopted fiscal decentralization (based on sub-national shares of revenues and expenditures) in 1999, 76% (96) were politically decentralized with at least one elected sub-national level of government (Figure 6). Out of the 52 with fiscal decentralization, 92% (48) had at least one level of sub-national elections, while 50% (26) had intermediate level elections (Figure 7). UNDP figures also showed that countries with high incomes are likelier to adopt both fiscal and political decentralization, compared to countries with low incomes (Figure 8), and countries in East Asia and the Pacific are the second least likely (after those in West Asia and North Africa) to adopt political decentralization (Figure 9).

Figure 6

Fiscal and Political Decentralization Worldwide

Fiscal Decentralization

41

Political Decentralization

76

2 or More Elected Subnational Tiers

33

0

10

20

30

40

50

per cent

Source: UNDP 2002.

36 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

60

70

80

Figure 7

Correlation of Fiscal and Political Decentralization

Intermediate

50

Local

92

0

20

40

60

80

100

per cent

Source: UNDP 2002.

Figure 8

Fiscal and Political Decentralization by GNP 87

GNP

High

9

78 Fiscal

48 Middle

15

Low

41

8 20

Political

81

None

44

12

0

100

40

Both 60

60

80

100

120

per cent

Source: UNDP 2002.

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Figure 9

Fiscal and Political Decentralization by Region 10

Sub-Saharan Africa

70

22

4

44 East Asia & Pacific

22

58

30

16 South Asia

16

66

34 52

Eastern Europe & Central Asia

20

76

48 94

Western Europe

0 8 46

8

54 62

15

0

100

94

West Asia & North Africa

Americas

Fiscal Political None Both

20

100

48

40

60

80

100

120

per cent

Source: UNDP 2002.

Concluding Remarks It is still too early to pass a final judgment on the fiscal reform that began in 1994. The recentralization of the fiscal system has definitely weakened the limited autonomy of the subnational governments. Some observers, however, see the reform as replacing a negotiated system with a structure on which a decentralized system could be built (Bahl 1998: 74).

Fiscal reform and economic development With the progress of continuing reform, inevitably China’s economy is becoming more and more decentralized and market-based. Along with that, budget is gaining importance to be the major instrument of the government to carry out efficiently its responsibilities of

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allocation, distribution and stabilization. With the central government’s long-term difficulty in exerting fiscal control over subnational authorities in this large and populous country comprised of one-fifth of humanity, the fiscal reform of 1994 made it a priority to redefine the functional responsibilities of different levels of governments and reorganize intergovernmental fiscal transfers, but the long-term problems such as the lack of coherence in governmental institutions and frameworks for the central government to transmit its decisions and policies to the regions and local municipalities still persist, as noted by a recent OECD report, Governance in China (2006).

The same report pointed out the urgent need to improve transparency and accountability, as the oft-noted autonomy of the country’s hotchpotch of provinces, counties and other subnational units – paradoxically in a country that is so constitutionally unitary – is mostly derived not from any formal devolution but from the inefficiency inherent in central planning itself, historical isolation and neglect, successive waves of decentralization and recentralization, and series of ad hoc and incoherent policies that result in the present “complex and opaque” fiscal system, as Wong and Bird (2006: 12) said of China’s extrabudgetary funds:

EBF are not all bad, of course. They have provided considerable and arguably desirable autonomy to local governments. On the other hand, they have also added considerably to the obscurity and probably also the regressivity of the general public finance scene in China. No one really knows what is going on within the bowels of China’s complex and opaque fiscal system. No news is not necessarily good news. In fact, it is decidedly bad news from the perspective of building a more transparent public sector to support China’s continuing drive to modernization.

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Three decades after Deng Xiaoping 26 launched his “Reform and Open” (gaige kaifang) policy, the ruling regime of China has again come to a crossroads: How to continue insulating China from the “third wave” of global democratization and preventing a repeat of the 1989 tragedy that not only directly threatened the ruling CCP’s hold on power but also gave China and the CCP such bad publicity 27 while being able to sustain rapid economic growth? How to maintain an efficient multilevel administration in intergovernmental fiscal relations especially to keep tabs on regional ethnoterritorial aspirations while not letting it slip into political decentralization that the regime sees as the road to national instability and disintegration?

It is exactly in recognition of the realities of present-day China, an authoritarian one-party state where the liberal mechanisms of democracy 28 – elections, separation of powers, a legal system independent of politics – are absent and may still be long in coming 29 , federalism, at least fiscal if not political, as Jin, Qian and Weingast (2005) observed, might well be one of the few ways to at least provide the credible limits on government behaviour that are essential to sustain and strengthen reform, invigorate the economy and stimulate growth. After all, the case of China is both exciting and complex, and little is certain of the days to come, given the increasing turbulence that is plaguing a society in breakneck transition:

… It was reported that in 2005 public order disturbances rose 6.6 per cent to 87,000, or an average of almost 240 a day. Equally alarming is a series of unrest with an ethnoreligious or ethnoregional content or a mix of the two. A most notable of such incidents is the Han-Hui conflict in October 2004 that occurred in the Nanren village and two other nearby villages in Henan province, that allegedly killed more than 100 people including at least 15 policemen, and injured more than 400 people, and at one point threatened to draw thousands more into the frenzy […] Though the conflict was probably triggered by a local traffic accident, simmering tensions might have been exacerbated by China's 40 Asia Research Centre, CBS, Copenhagen Discussion Papers 2008-25

economic success that led to a growing gap between rich and poor, especially in the countryside. (Yeoh 2006b: 224)

Ethnicity, inequality, unemployment and the threat of social unrest The Nanren conflict inevitably draws our attention again to the menace of interethnic and ethnoregional disparities. Mainly engaged in traditional farming and animal husbandry, ethnic minorities’ level of urbanization is low. According to the 2000 Population Census, ethnic minorities’ level of urbanization was 23.44 per cent, i.e. 13.48 percentage points lower than the national figure of 36.92 per cent, and even 2.79 per cent lower than the 1990 national level of 26.23 per cent. While the national urbanization in terms of cities (chengshihua) was 23.55 per cent by the year 2000 and that in terms of townships (chengzhenhua) was13.37 per cent – the former being 1.76 times the latter – ethnic minorities’ urbanization in terms of cities was only 11.87 per cent, not much different from that of 11.57 per cent in terms of townships (China Ethnic Minorities Development Report, 2001-2006: 232). This lower urbanization of the ethnic minorities has directly affected the development of their occupational structure, resulting in the majority of them being engaged in the primary industry (agriculture). The proportion of ethnic minority population in the agricultural sector was 82.51 per cent, i.e. 7.24 percentage points higher than the national average. There has been a general increase in the agricultural population in the ethnic zizhiqu and multiethnic provinces, with the exception of Inner Mongolia and Guangxi. The highest increase was registered in Xinjiang, Tibet and Ningxia. In terms of occupational structure, ethnic minorities’ ratio of primary to secondary to tertiary sector employment was 78.8 : 7.1 : 14.1, compared to the national ratio of 64.4 : 16.8 : 18.8. Ethnic minorities’ primary sector employment ratio was thus 14.4 percentage points higher

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than the national, and secondary sector and tertiary sector ratios were respectively lower than the national by 9.7 and 4.7 percentage points. While the proportion of population in agricultural sector employment has dropped during 1990–2000 nationally (72.2 per cent to 64.6 per cent, i.e. by 7.8 percentage points) and for both the Han Chinese (71.3 to 63.0, by 8.34 points) and ethnic minorities (80.13 to 74.50, by 5.63 points), the extent of decline for the ethnic minorities was lower than the national figure and that of the Han Chinese, making them the largest grouping engaged in agriculture. (ibid.: 232-235) In terms of unemployment – take the case of the volatile region of Xinjiang, where official figures show a total of 152617 unemployed and xiagang 30 personnel as in August 2005, including those with tertiary education, and a total of 400 thousand people in the urban areas facing employment and re-employment problems. While the employment rate of ethnic minority graduates was 76.63 per cent as in August 2005, this number actually includes graduates who returned to their place of origin and were considered “in self-choice employment” (zizhu zeye). If those who were actually unemployed after returning to their place of origin are taken into consideration, the real employment rate of these ethnic minority graduates could be just half of the official figure (ibid.: 369-370).

The combined impact of poverty, unemployment, interethnic inequalities and ethnoregional disparities hence represents one of the major challenges facing China’s ruling regime in maintaining social stability for continued rapid economic development that is now increasingly seen as the key to the survival of its one-party rule. To add to the Nanren conflict mentioned above, in August 2007 there was also the unconfirmed news of another serious Han-Hui conflict in the Shimiao township in Huimin county of Shandong province, close to the Hui county of Shanghe, that resulted in at least a death and more than twenty

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injured. This was not the first such open conflict in Shandong which earlier experienced the well-known “Yangxin incident” in 2000 when six Huis were killed during a thousandstrong Hui protest against a “Halal pork” shop sign. 31

However, as Andrew Nathan (2006) commented in his review of Minxin Pei’s 2006 book China's Trapped Transition: The Limits of Developmental Autocracy, the fact that China’s society is turning more turbulent is not proof that the ruling Communist Party regime is at the verge of collapse. “Social contention may be frightening when it boils up from beneath the surface after having been repressed for a long time, but it may still serve the survival interests of the regime if it is managed well”, noted Nathan. It is an open question whether social pressures – like “nongovenmental organizations pressing for official action on issues such as HIV/AIDS and the environment, legal-aid offices helping migrant workers sue companies and the government, pensioners and laid-off workers petitioning for back wages and pensions, journalists embarrassing local officials with investigations of mining accidents and land grabs” 32 – would actually threaten or strengthen the Communist Party regime. It also remains to be seen whether the country’s growing domestic contradictions, systemic disruptions, as well as the challenges posed by central-peripheral conflicts, ethnic resource contest and ethnoterritorial aspirations – being exacerbated by the country’s “retreat from equality” and growing interregional economic disparity – the revival of old regionalisms, as well as the creation of new regionalisms brought about by increased local autonomy, rapid economic growth and increasingly globalizing trade and business linkages would pave the way for genuine political reforms long stalled since the purge of Zhao Ziyang 33 in 1989, or bring to an end the creeping democratization 34 process

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as an increasingly besieged regime resorts to its most familiar way of dealing with such crises, precipitating further endemic chaos, conflict and instability.

1

Available from: http://www.china.org.cn/english/congress/227029.htm

2

In this paper, for convenience, the term “provinces” (sheng) is sometimes taken to also refer to China’s zizhiqu (“autonomous regions”, i.e. Xinjiang, Guangxi, Ningxia, Inner Mongolia/Nei Monggol and Tibet/Xizang) and zhixiashi (municipalities directly under the central government, i.e. Beijing, Tianjin, Shanghai and Chongqing). “Billion” means a thousand million and “trillion” a million million. “Yuan” is the largest denomination of China’s currency “renminbi”, roughly equivalent to US$0.135. 3

Not counting the Special Administrative Regions (SARs) of Hong Kong (under British rule before 1997) and Macau (under Portuguese rule before 1999), and Taiwan – the island province de facto independent since 1949. 4

The largest denomination of China’s renminbi (“people’s currency”) is yuan (Latinized symbol ¥ or Ұ), a term with cognates in the Japanese yen or en (Latinized symbol ¥) and Korean wŏn (Latinized symbol ₩). 5

The Uyghurs in fact established, with Russian help, a short-lived East Turkestan Republic in 1944, but it collapsed after the 1949 Communist victory in China’s civil war, and the region was reincorporated into China as the Xinjiang Uygur Zizhiqu in 1955. Like the de facto independent Taiwan since 1949, with the collapse of the Qing Dynasty that led to the repatriation of the imperial troops from the region, Tibet (today China’s Xizang Zizhiqu) was in every respect virtually on her own from 1911 to 1950. 6

Such fear for the threat to territorial integrity with the death of the Soviet Union constantly hanging like the sword of Damocles is sometimes attributed to the idea of the Confucian “grand unity” (datong) in the “Cultural China” (Wenhua Zhongguo) construct. Nevertheless, this Confucian concept of “grand unity” cannot be taken for granted without paying due consideration to the will of all groups, whether dominant or subordinate, in the People’s Republic of China. This socalled “grand unity” emphasized in the Cultural China construct, far from a voluntary federalization by amalgamation, has always been a top-down arrangement in the millennia of China’s history, shaped mostly by conquest and domination. As Mikhail Gorbachev pointed out in the case of the former Soviet Union, the disintegration of such an entity represents the dissolution not of a country, but of the command structure that has long gone against the genuine will of the constituent nationalities of the empire (Gorbachev, 1991). 7

ROC is today recognized by 24 countries, after regaining St Lucia’s recognition on 1st May 2007, but losing Costa Rica (one of Latin America’s most democratic countries) to the PRC on 7th June 2007 – a bitter irony, according to Taiwan – within four days of the year’s anniversary of the 1989 Beijing-Tiananmen massacre.

8

“Zhongguo qi kuai lun”.

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9

These overseas Chinese community leaders are renowned Chinese personalities, far removed from the realities of everyday China, to whom the bainian guochi (hundred years of national humiliation) is still crying out loud for redemption and whose concept of China represents a collective memory of a great, splendid, permanent and stable “Cultural China”. An example is the well-known Malaysian political-activist-turned-entrepreneur Tan Kai Hee. Having long ago asserted his conviction when he published scorching diatribes in the Malaysian Chinese press condemning the student-led pro-democracy demonstrators during the height of the BeijingTiananmen massacre of 3rd-4th June 1989, Tan is today the secretary-general of the MalaysiaChina Friendship Association and the Malaysian Association for the Promotion of One China (MAPOC or Yi Zhong Cujin Hui), an inconsequential club of local ethnic Chinese tycoons. Like Tan Kai Hee, who has strong business links with China, MAPOC’s other members are also renowned personalities in the Malaysian Chinese community with business interests in China. Hence, besides the more abstract notion of the Cultural China sentiments, business considerations are undoubtedly paramount in view of MAPOC members’ business interests in China. There is something unsettling here to MAPOC’s detractors that the paramount issue that constitutes the raison d’être of the club is neither the pitfalls of political reform, nor the problems of democratization, nor the lamentable human rights record of a State apparatus that is directly impacting the welfare of one fifth of humanity, but solely the territorial integrity of China. Nor there are concerns regarding the welfare of the Taiwanese people in or the justifiability of subordinating human rights-respecting liberal democratic Taiwan, which was rated 2 (next to best) on political rights and 1 (the best) on civil liberties in the recently released Freedom House’s Annual Global Survey of Political Rights and Civil Liberties (see Figure 3), to an authoritarian one-party state which was rated 7 (the worst) on political rights and 6 (next to worst) on civil liberties (Freedom in the World 2007. The ratings are for 1st December 2005 – 31st December 2006). 10

Though usually translated as “Taiwan’s Viewpoint”, the title of Lee’s book Taiwan de Zhuzhang literally means “Taiwan’s Proposition”.

11

“Da Zhonghua zhuyi”.

12

The spectre of China’s disintegration has never ceased to haunt the generation of Chinese who have had the first-hand experience of China’s humiliation at the hands of the Western powers and Japan up to the Second World War. This is the generation that today still makes up the leadership echelons in China, and leaders and respected intelligentsia in the overseas Chinese communities. This is the generation whose outlook having been shaped by their personal experience, among whom Beijing’s stance that the benefits of stability under one-party rule far outweigh the risky endeavour of democratization and decentralization and that the human rights of the 1.3 billionstrong populace to be free from starvation and to be sheltered far outweigh the Western notion of freedom of speech and freedom of political choice would find resonance. This is a generation that the yearning and love for a great “Cultural China”, and a China that could stand tall among the community of nations, a China that is fast becoming a superpower, is all that counts in bestowing pride on one’s Chinese ethnicity. Probably little else matters. Such sentiments can be seen, for instance, in the public discourse of a personality like Chen Ning (Franklin) Yang, a joint winner of the Nobel Prize in physics in 1957 who opted for American citizenship in 1964, who attributed China’s success today to the embedded saliency both in traditional Chinese culture and the regime of the Chinese Communist Party – a saliency that he regarded as missing in other cultures as that of

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45

India and other political systems such as the Brazilian democracy whose people also lack the assiduity, obedience and respect for authority that are so characteristic of the Chinese people and the organizing ability of the Chinese Communist Party that are indispensable in the creation of China’s miracle today (Yu 2005). Yang, like Tsung-Dao Lee with whom he shared his 1957 Nobel Prize, has to date steadfastly refused to condemn the Beijing-Tiananmen massacre of 3rd-4th June 1989, concurring with Beijing’s stance that the brutal crackdown had been necessary to preserve China’s stability and economic progress. After all, Deng Xiaoping, in ordering the brutal crackdown of June 1989, allegedly said that it was worth killing 20 wan (i.e. 200 thousand) people to ensure 20 years of stability for China. 13

The title of Wang’s book Heping Qixiong Lun literally means “A Theory of the Peaceful Seven Powers”. “Wang Wen-shan” was the pen-name of Wang Shih-jung, a former associate professor at Taiwan's Chinese Culture University. The Chinese version of this book was published in December 1996. 14

The ethnic fractionalization index in Table 6 and Figure 4 is computed as follows: n ni EFI = 1 - Σ ( ---- ) (----------) i=1 N

ni - 1 N-1

where n = the number of members of the ith group and N = the total number of people in the population (Yeoh 2003: 28). The index is constructed through the computational procedure of Rae and Taylor's index of fragmentation (F), defined as the probability that a randomly selected pair of individuals in a society will belong to different groups (Rae and Taylor 1970: 22-3). The index varies from 0 to 1. The value is zero for a completely homogeneous country (the probability of belonging to different groups is nil). The value 1 occurs in the hypothetical society where each individual belongs to a different group. The fragmentation index is identical to Rae's measure of party system fractionalization (Rae 1967: 55-8) and Greenberg's measure of linguistic diversity (Greenberg 1956): n A = 1 - Σ ( Pi )² where P = the proportion of total population in the ith language group. i=1 15

Due to the abnormal size of China’s population and in particular the size of China’s citizens of the Han ethnicity, a distortion or misrepresentation emerges in the application of the ethnic fractionalization index to China as the country’s large populations of minorities – about 110 million in total, including the 16 million Zhuang, 10 million Manchu, 9 million Hui, 8 million Uyghurs, 5 million Mongols and 5 million Tibetans – are practically dwarfed almost to invisibility by the sheer size of the Han population, as is evident in Table 5. In fact, in view of the the "critical mass" theory (see note 17 below), It is obvious that the issue of "numerical significance" cannot be the sole criterion involved in the anomaly of China. The official population figures for Tibet differ much from certain unofficial ones. The official figures have been disputed by the Tibetan government-inexile who claims that “accelerating Han population transfer into Tibet … has reduced the Tibetan people to a minority in their own land … [and today] there are over 7.5 million non-Tibetan settlers in Tibet including Chinese and Hui Muslims, compared to six million Tibetans” (Cook and Murray

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2001: 141). According to the spiritual leader of the Tibetan government-in-exile Dalai Lama, who accuses China’s government of conducting a demographic invasion that has turned the Tibetans into a minority within Tibet, from the 50-60 thousand in the early days Lhasa’s population has jumped to today’s 300,000 people, of whom 200,000 are Han Chinese (‘Yindu Jin Guanyuan Qing Dalai Huojiang’, Dongfang Ribao (Malaysian daily), 5th November 2007). However, such allegations of population transfer is rebutted by the Beijing government, who argues that “the only Han Chinese living in Tibet are specialists who have gone there voluntarily to help in the region’s development … [and they] make up less than five per cent of the population and many of the people are there for only a few years before returning home” (Cook and Murray, op.cit.). 16

To complicate matters, “deep-rooted ethnic mistrust, closely interfacing with the politicoeconomic superstructure, more often than not makes many a best-intentioned effort in promoting interethnic harmony and national integration a Sisyphean endeavour” (Yeoh 2006c: 238), especially in a country like China that has gone through such horrors of the Great Proletarian Cultural Revolution and in view of the continuing repressive policies towards regions with long-running ethnoterritorial problems. Goodwill in interethnic relations, so crucial in times like this, is hardly won back with the continued long jail terms handed out to and brutalities against ethnic dissidents. A case recently highlighted by the Amnesty International is that of Hada who was tried behind closed doors in the Inner Mongolia Zizhiqu in 1996 and sentenced to 15 years in jail for separatism and spying and his support for the Southern Mongolian Democratic Alliance that sought greater rights for China’s ethnic Mongolians. The 2006 Nobel peace prize nomination of Rebiya Kadeer, the formerly jailed Uyghur rights activist, also attracted world attention to the plight of China’s regional ethnic minorities. Also do not help are incidents like the recent border shooting in Tibet captured on video by Romanian mountaineers and later aired on Romanian television that showed a Chinese border guard calmly opened fire from a mountain ridge on a group of unarmed, defenseless Tibetans below, as they struggled through the snow to escape to India, allegedly killing two, aged 13 and 17. 17

Based on the "critical mass" theory – advanced, among others, by Semyonov and Tyree (1981), societies are considered multiethnic only if minorities constitute more than ten per cent of their population.

18

Bahl (1998) used the term “local government” to refer to all subnational governments.

19

Cannon and Zhang 1996: 85, cited in Cook and Murray 2001: 90.

20

Zhongnanhai is a complex of buildings in Beijing which serves as the central headquarters for the Communist Party of China (CCP) and the government of the People’s Republic of China (PRC). 21

Sichuan was often noted as one of the centres of “old regionalism”, with potential for rebellion or upheaval centred upon its ancient cities such as Chengdu (the capital of the province) and Chongqing. The province even proclaimed a “Declaration of Independence” in 1921 (Cook and Murray 2001: 91). During the 1989 student-led pro-democracy movement that ended in the carnage around Beijing when the People’s Liberation Army clashed with Beijing residents and workers in support of the student demonstrators in the Tiananmen Square during the fateful night of June 3rd– 4th, 1989, Chengdu was one of the major cities in China that witnessed large-scale popular movement in support of the Beijing demonstrators. Zhou Enlai was said to have noted that Sichuan

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“always was the scene of turmoil before other provinces, and that order was always restored in that area later than the rest of the country” (Cook and Li 1996: 202). 22

“Counties with a relative concentration of the poor are designated by the State as “poor counties”, eligible to benefit from the government’s poverty relief policy measures. Designated as poor counties were ordinary counties with net income per capita of 150 yuan or less in 1985, “autonomous counties” of ethnic minorities with net income per capita of 200 yuan or less, and counties that were formerly bases of revolution with net income per capita of 300 yuan or less. In the adjustment made with the “State Seven-Year Plan to Help 80 Million People Get Out of Poverty” in 1994, counties with net income per capita of 700 yuan or more were removed from the designation but all counties with per-capita net income of 400 yuan or less were added, if they were not designated previously, increasing the total number of designated counties to 592.” (IDE Spot Survey 2001: 63-64, note 9).

23

Sin Chew Daily (Malaysia), 16th September 2007.

24

Any illusion that the Party is loosening its stranglehold over China’s politics would be broken by the stark reality that the tolerance threshold of dissent remains lamentable to date, not least highlighted lately by the arrest and jailing of civil rights lawyers Gao Zhisheng and Zheng Enchong, the jailing of researcher Zhao Yan, blind civil rights lawyer Chen Guangcheng and Straits Times (Singapore) journalist Ching Cheong. For each of these high-profile cases there are innumerable arrests and imprisonments that rarely raise an eyebrow beyond the border. According to the advocacy group Reporters Without Borders, there are more journalists in prison in China than anywhere else in the world. (‘Hong Kong Reporter Being Held By China’, Washington Post Foreign Service, 30th May, 2005. Available from: http://www.washingtonpost.com/wpdyn/content/article/2005/05/29/AR2005052900986.html) In the recently released Freedom House ratings, as referred to in note 9 above, China was rated 7 (i.e. the worst rating) on political rights and 6 (next to worst) on civil liberties (see Figure 3), making her one of the 17 “worst of the worst” countries in terms of political rights and civil liberties (Puddington 2007: 4), just marginally better than Burma, North Korea, Cuba, Sudan, Libya, Somalia, Turkmenistan and Uzbekistan that were all rated 7 on both political rights and civil liberties (Freedom in the World 2007). 25

‘Xinjiabo Fei Wei Zhongguo Shu Huai Bangyang’, Dongfang Ribao (Malaysian daily), 23rd November 2006. Whether the neo-authoritarian experience of the corruption-free tiny city state of Singapore could effectively be emulated by a huge country with one-fifth of humanity where corruption is endemic has always been a centre of debate, as Fang Lizhi, the dissident astrophysicist exiled after the 1989 Beijing-Tiananmen massacre, warned (1991: 254-255), “There is no rational basis for a belief that this kind of dictatorship can overcome the corruption that it itself has bred. Based on this problem alone, we need more effective means of public supervision and a more independent judiciary. This means, in effect, more democracy.” (‘China’s Despair and China’s Hope’, originally appeared in The New York Review of Books on 2nd February 1989, translated by Perry Link) 26

The twice-purged pragmatist and reformist Deng Xiaoping is today one of the most enigmatic figures in the history of China who will be remembered both as the pragmatist saviour of modern China who dealt the coup de grâce to Mao’s failed autarkic collectivist utopia in 1978 and as the

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butcher of Beijing who unleashed his deadly wrath upon the “ungrateful” students and other denizens of the ancient capital in 1989. 27

The term “Beijing Spring” was used by Western journalists to designate the 1989 BeijingTiananmen pro-democracy demonstrations: “… The martyrs of Tiananmen Square lie silent and still. They spoke for themselves throughout the tumultuous and chaotic weeks of the Beijing Spring of 1989. But now, in the aftermath of repression and intimidation, their symbolic Goddess of Democracy has been shattered, their banners have been removed, and their voices have been silenced […] We were incredulous spectators as the Chinese students dared to dream what became an impossible dream […] But certain events are so monumental, so symbolic, so glorious, and speak so eloquently to our highest ideals that they transcend the immediacy of the news. History demands that they be preserved.” – from Howard Chapnick’s foreword to Beijing Spring (Turnley et al. 1989), p. 15. Unlike the Prague Spring of 1968 – which lent its name to the analogous Beijing counterpart a decade later and here again to foreign observers to describe the hundred-day BeijingTiananmen demonstrations in 1989 – that was cut short by invading foreign troops, the crushing of the 1989 “Beijing Spring” was entirely a domestic affair, described by the Western journalists as the Rape of Peking (Beijing) in an insinuated analogy with the infamous Rape of Nanking (Nanjing) by the Japanese troops in World War II, as Asiaweek lamented a Goya-esque landscape but with, by hindsight, probably a gross underestimation of CCP’s resiliency and the effectiveness of authoritarian power: “… Not only is Peking a nightmare streetscape awash in atrocity and anguish; the nation at large has become a haunted land. This howling, lurching mega-ghost is the Chinese Communist Party. In one staggeringly brutal stroke, it shot itself through the heart. It will not recover. A regime that professes itself to be the distillation of popular will has turned on the Chinese people, committing the ultimate sacrilege of eating its own children. Hundreds of China’s brightest, most idealistic sons and daughters, their movement commanding wide public sympathy, were nakedly sacrificed to the cause of preserving an élite.” – from “The Rape of Peking”, Asiaweek editorial, 16th June 1989, p. 16. 28

Or the “fifth modernization” demanded of the ruling regime by China’s political dissidents from the earlier vanguards like Wei Jingsheng to the thousands of student demonstrators and hunger strikers on Tiananmen Square and other demonstrators from all walks of life from Beijing to Hong Kong, from Chengdu to Shenzhen, during the 100-day “Beijing Spring” that ended up with, à la Asiaweek, the “Rape of Beijing” on that fateful night of June 3rd-4th, 1989, when a besieged regime finally responded with a massacre to reclaim the capital from the unarmed peaceful protesters. Wei Jingsheng termed democracy China’s “fifth modernization”, i.e. in addition to the pursuit of the "Four Modernizations" of China’s agricultural, industrial, national defense and science sectors declared by Deng Xiaoping. Like the Polish labour union activist Lech Wałesa who was later elected president of Poland after the fall of the Communist Party dictatorship, Wei Jingsheng was also an electrician. Wei posted his manifesto “The Fifth Modernization” on the "Democracy Wall" on the morning of 5th December 1978 at a busy city intersection not far from the Tiananmen Square in Beijing, and the State responded by sentencing him to 15 years in prison. Eleven years later – at the 200th anniversary of the French Revolution, 70th anniversary of the May 4th Movement, 40th anniversary of Chinese Communist Party rule – protesting students on Tiananmen Square and their supporters from all walks of life around Beijing and other Chinese cities paid dearly by blood when they dared to voice the same demand during, paraphrasing Yazhou Zhoukan, “the hundred days of People Power that made one proud to be a Chinese” (“Preface”, Yazhou Zhoukan, 1989: 4).

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29

A cautious positive note has lately been expressed by the late Zhao Ziyang’s former top aide Bao Tong, purged along with Zhao in 1989 for opposing the sending in of troops and tanks to crush the demonstrations, and the most senior official jailed in the post-Tiananmen persecutions. Bao recently told a Reuters reporter who took the opportunity to interview him as China relaxed media curbs in the run-up to the 2008 Beijing Olympics, “"The fact that I can meet you and you can meet me is an improvement.” Bao has lived under tight, around-the-clock surveillance ever since he was released from jail in 1996. However, China’s Foreign Ministry has stated that the relaxation of media curbs will expire on 17th October, 2008, once the Games end. (The Star, Malaysian daily, 2nd January 2007) 30

The term “xiagang” refers to redundant workers mainly at State enterprises, without directly describing them as “unemployed”. Still officially attached to their work units or enterprises, the xiagang workers continue to receive basic minimum subsidies for their living and medical expenses, and are encouraged to change job, probably through State-run job and re-employment centres, or go into small businesses. In line with State enterprise reforms, the number of xiagang workers has been on the rise: 4 million in 1995, 8 million in 1996, 12 million in 1997, 16 million in 1998, 20 million in 1999, though dropping to 11 million in 2001. (Zhou 2006: 289) 31

Sin Chew Daily (Malaysia), 5th September 2007.

32

Nathan (2006).

33

The political reform much hoped for by some China watchers when Hu Jintao and Wen Jiabao – both being former colleagues and subordinates of the former reformist premier Zhao Ziyang who was disgraced in 1989 in a power struggle with hardliner Li Peng who subsequently executed Deng Xiaoping’s decision for a brutal crackdown on the Beijing-Tiananmen protesters – took over the presidency and premiership respectively has never materialized. Their absence at the memorial service for Zhao, who was placed under house arrest for sixteen long years till his death for his refusal to repent his decision to oppose the 1989 Beijing-Tiananmen crackdown and to urge for the accommodation of the hunger-striking students’ demands, when he passed away in 2005 has added to the doubt regarding the degree of their political power in the central politburo (see, e.g. the interview of the exiled dissident Yan Jiaqi, Zhao’s advisor when he was premier, in 2005 ). 34

A term used by Pei (1995).

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References Books and articles Bahl, Roy W. 1998. ‘China: Evaluating the Impact of Intergovernmental Fiscal Reform. In Richard Bird and François Vaillancourt (eds). Fiscal Decentralization in Developing Countries. Cambridge: Cambridge University Press (reprinted 2000). Banks, A.S. and R.B. Textor 1963. A Cross Polity Survey. Cambridge, Mass.: MIT Press. Cannon, T. and Zhang L.-Y. 1996. ‘Inter-region Tension and China’s Reforms. In I.G. Cook, M.A. Doel and R. Li (eds). Fragmented Asia: Regional Integration and National Disintegration in Pacific Asia. Aldershot, England: Avebury. Chen Jiansheng 2006. Tuigenghuanlin yu Xibu Kechixu Fazhan [Defarming-Reforestation and Sustainable Development in the Western Region]. Chengdu: Xinan Caijing Daxue Chubanshe. Chen Lixin 2004. Gansu Minzu Diqu Jingji Fazhan Yanjiu [A Study of the Economic Development of the Nationality Area in Gansu]. Beijing: Zhongguo Shehuikexue Chubanshe. Cook, Ian G. and Rex Li 1996. ‘The Rise of Regionalism and the Future of China’. In Ian G. Cook, M. Doel and Rex Li (eds). Fragmented Asia: Regional integration and National Disintegration in Pacific Asia. Aldershot, England: Avebury. Cook, Ian G. and Geoffrey Murray 2001. China’s Third Revolution: Tensions in the Transition towards a Post-Communist China. Richmond, Surrey: Curzon Press. Fang, Lizhi 1991. Bringing down the Great Wall: Writings on Science, Culture, and Democracy in China. New York: Alfred A. Knopf. Frye, T. and A. Shleifer 1997. ‘The Invisible Hand and the Grabbing Hand’. American Economic Review Papers and Proceedings 87 (2). Gorbachev, Mikhail Sergeyevich (1991), The August Coup: The Truth and the Lessons, New York: HarperCollins. Greenberg, Joseph H. 1956. ‘The Measurement of Linguistic Diversity’. Language 32(1), March. Gu, Qingyang and Kang Chen 2002. Impact of Fiscal Re-Centralization on China’s Regional Economies: Evidence from a Multi-Regional Model. Paper presented at the ‘International Conference on Policy Modeling’, Brussels, 4–6 July 2002.

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Hu Xin 2005. Zhongguo Jingji Dili [China Economic Geography]. 5th edition. Shanghai: Lixin Kuaiji Chubanshe. Jin, Hehui, Yingyi Qian and Barry R. Weingast 2005. ‘Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style’. Journal of Public Economics 89(9-10). Krug, Barbara and Ze Zhu 2004. Is China a Leviathan? (ERIM Report Series ‘Research in Management’, ERS-2004-103-ORG). Erasmus Research Institute of Management, Rotterdam School of Management/Rotterdam School of Economics. Available from: http://hdl.handle.net/1765/1821 Krug, Barbara, Ze Zhu and Hans Hendrischke 2004. China’s Emerging Tax Regime: Devolution, Fiscal Federalism, or Tax Farming? (ERIM Report Series ‘Research in Management’, ERS-2004-113-ORG). Erasmus Research Institute of Management, Rotterdam School of Management/Rotterdam School of Economics. Available from: http://hdl.handle.net/1765/1841 Lee, Teng-hui 1999. Taiwan de Zhuzhang [Taiwan’s Viewpoint]. Taipei: Yuan-Liou. Nathan, Andrew J. 2006. ‘Present at the Stagnation’. Foreign Affairs, July/August. Available from: http://www.foreignaffairs.org/20060701fareviewessay85414/andrew-jnathan/present-at-the-stagnation.html Nee, V. 2000. ‘The Role of the State in Making a Market Economy’. Journal of Institutional and Theoretical Economics 156. Nie Hualin and Yang Jianguo 2006. Zhiongguo Xibu Nongcun Shehuibaozhang Gailun [An Outline Introduction to Social Security of Farming Villages in Western China]. Beijing: Zhongguo Shehuikexue Chubanshe. Oi, J.C. 1992. ‘Fiscal Reform and the Economic Foundations of Local State Corporatism in China’. World Politics 45(1). –– 1995. ‘The Role of the Local State in China’s Transitional Economy’. China Quarterly 144. Oksenberg, Michel and James Tong 1991. ‘The Evolution of Central-Provincial Fiscal Relations in China, 1971-1984: The Formal System’. China Quarterly, March. Olson, Mancur 2000. Power and Prosperity: Outgrowing Communist and Capitalist Dictatorships. New York: Basic Books. Pei, Minxin 1995. ‘’Creeping Democratization’ in China’. Journal of Democracy 6(4), October. –– 2002. Beijing Drama: China’s Governance Crisis and Bush’s New Challenge (Policy Brief no. 21). Carnegie Endowment for International Peace, November.

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–– 2006. China's Trapped Transition: The Limits of Developmental Autocracy. Cambridge, MA: Harvard University Press. Puddington, Arch 2007. ‘Freedom in the World 2007: Freedom Stagnation amid Pushback against Democracy’. Freedom House. Available from: http://www.freedomhouse.org/uploads/press_release/fiw07_overview_final.pdf Rao, M. Govinda 2003. ‘Fiscal Decentralization in China and India: A Comparative Perspective’. Asia-Pacific Development Journal 10(1), June. Rae, Douglas W. 1967. The Political Consequences of Electoral Laws. New Haven: Yale University Press. Rae, Douglas W. and Michael Taylor 1970. The Analysis of Political Cleavages. New Haven: Yale University Press. Semyonov, Moshe and Andrea Tyree 1981. ‘Community Segregation and the Costs of Ethnic Subordination. Social Forces 59(3), March. Shleifer, A and R. Vishny 1994. ‘Politicians and Firms’. Quarterly Journal of Economics 109. –– 1998. The Grabbing Hand. Cambridge, MA: Harvard University Press. Tiebout, Charles M. 1956. ‘A Pure Theory of Local Expenditures. Journal of Political Economy, October. Tsai, Kellee S. 2002. ‘Off Balance: The Unintended Consequences of ‘Fiscal Federalism’ in China’, April. Available from: http://www.jhu.edu/~polysci/faculty/tsai/offbalance.pdf Turnley, David, Peter Turnley, Melinda Liu and Li Ming 1989. Beijing Spring. New York: Stewart, Tabori & Chang. Unger, J. and A. Chan 1995. ‘China, Corporatism, and the East Asian Model’. The Australian Journal of Chinese Affairs 33. United Nations Development Program (UNDP) 2002. ‘Overview of Decentralisation Worldwide’. Presentation at the ‘Second International Conference on Decentralisation’, Manila, 25th-27th July 2002. Vasil, Raj K. 1984. Politics in Bi-Racial Societies: The Third World Experience. New Delhi: Vikas Publishing House. Wakabayashi, Mashiro 1999. ‘Taiwan de zhuzhang (Taiwan’s Viewpoint), by Lee Teng-hui’ (book review). China Perspectives 25, September–October 1999. Available from: http://www.cefc.com.hk/uk/pc/articles/art_ligne.php?num_art_ligne=2509

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Wallis, John J. and Wallace E. Oates 1988. ‘Decentralization in the Public Sector: An Empirical Study of State and Local Government’. In Harvey S. Rosen (ed.). Fiscal Federalism: Quantitative Studies. Chicago: The University of Chicago Press. Wong, Christine P.W. and Richard M. Bird 2006. ‘China’s Fiscal System: A Work in Progress’. Available from: http://faculty.washington.edu/cpwwong/China's fiscal system.pdf Wu Yingmei 2006. Xibu Shaoshuminzu Jujuqu Jingji Fazhan ji Jizhi Yanjiu [A Study of Economic Development and System in the Ethnic Minority Areas of Western China]. Beijing: Renmin Chubanshe. Xia, Ming 2000. The Dual Developmental State: Development Strategy and Institutional Arrangements for China’s Transition. Aldershot: Ashgate Publishing Ltd. Yazhou Zhoukan 1989. Jingtiandongdi de Yibai Ri [The Hundred Days That Shook Heaven and Earth]. Hong Kong: Yazhou Zhoukan. Yeoh, Emile Kok-Kheng 2003. ‘Phenotypical, Linguistic or Religious? On the Concept and Measurement of Ethnic Fragmentation’. Malaysian Journal of Economic Studies 40(1 & 2): 23-47. –– 2006a. Development Policy, Demographic Diversity and Interregional Disparities in China (Copenhagen Discussion Paper Series No. 12, June). Copenhagen: Asia Research Centre, Copenhagen Business School. –– 2006b. ‘Demographic Diversity and Economic Reform in a Globalizing World: Regional Development and the State in China’. In Emile Kok-Kheng Yeoh (ed.). China and Malaysia in a Globalizing World: Bilateral Relations, Regional Imperatives and Domestic Challenges. Kuala Lumpur: Institute of China Studies, University of Malaya 2006: 208-273. –– 2006c. ‘Ethnic Coexistence in a Pluralistic Environment. GeoJournal: An International Journal on Human Geography and Environmental Sciences (Springer) 66(3): 223241. Yu Jie 2005. ‘Yang Zhenning Jiujing Ai Neige ‘Guo’’ [Which Country is Chen Ning Yang Actually Patriotic To?]. Zhengming, August 2005, repr. in Boxun, 1 August 2005. Available from: Zheng, Yongnian and Lye Liang Fook 2004. ‘Reform, Leadership Change and Institutional Building in Contemporary China’. Paper presented at the conference “Emerging China: Implications and Challenges for Southeast Asia”, University of Malaya, Kuala Lumpur, 22-23 July 2004.

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Zhou, Linong 2006. China Business: Environment, Momentum, Strategies, Prospects. Singapore: Prentice Hall/Pearson.

Reports 2000 Nian Zhongguo Quyu Fazhan Baogao: Xibu Kaifa de Jichu, Zhengce yu Taishi Fenxi [China Regional Development Report 2000] (by Lu Dadao et al.). Beijing: Shangwu Yinshuguan, 2001. 2000 Nian Zhongguo Renkou Pucha/2000 Population Census of China. Beijing: Zhonghua Renmin Gongheguo Guojia Tongjiju/National Bureau of Statistics of China, 2002. 2003 Nian Zhongguo Shanqu Fazhan Baogao [China Mountainous Areas Development Report 2003] (by Chen Guojie et al.). Beijing: Shangwu Yinshuguan, 2004. Freedom in the World 2007. Freedom House, 2007. Available http://www.freedomhouse.org/uploads/press_release/fiw07_charts.pdf

from:

Governance in China. Paris: Organisation for Economic Co-operation and Development (OECD), 2005. IDE Spot Survey – China’s Western Development Strategy: Issues and Prospects (edited by Yasuo Onishi). Chiba, Japan: Institute of Developing Economies/IDE-JETRO, December 2001. Zhongguo Diqu Jingji Fazhan Zhanlüe Yanjiu [China Regional Economic Development Strategy Study] (chief editor: Liu Jiang). Beijing: Zhongguo Nongye Chubanshe, 2003. Zhongguo Guojia Nengli Baogao [China National Capability Report] (by Wang Shaoguang and Hu Angang). Shenyang: Liaoning Renmin Chubanshe, 1993. Zhongguo Minzu Fazhan Baogao, 2001-2006 [China Ethnic Minorities Development Report, 2001-2006] (Minzu Fazhan Lan Pi Shu/Blue Book of Ethnic-Affairs) (edited by Hao Shiyuan and Wang Xi’en). Beijing: Shehuikexue Wenxian Chubanshe (Social Sciences Academic Press), 2006. Zhongguo Xibu Nongcun Quanmian Xiaokang Zhibiao Tixi Yanjiu [Indicators of the Overall Moderate Well-being of the Farming Villages in the Western Region of China] (edited by Hu Xiaoping). Chengdu: Xinan Caijing Daxue Chubanshe, 2006. Zhongguo Tongji Nianjian/China Statistical Yearbook (compiled by the Zhonghua Renmin Gongheguo Guojia Tongjiju/National Bureau of Statistics of China). Beijing: Zhongguo Tongji Chubanshe/China Statistics Press (various years).

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COPENHAGEN DISCUSSION PAPERS 2005: 2005-1 May: Can–Seng Ooi, ”Orientalists Imaginations and Touristification af Museums: Experiences from Singapore”. 2005-2 June: Verner Worm, Xiaojun Xu, and Jai B. P. Sinha, “Moderating Effects of Culture in Transfer of Konwledge: A Case of Danish Multinationals and their Subsidiaries in P. R. China and India”. 2005-3 June: Peter Wad, “Global Challenges and Local Responses: Trade Unions in the Korean and Malaysian Auto Industries”. 2005-4 November: Lenore Lyons, “Making Citizen Babies for Papa: Feminist Responses to Reproductive Policy in Singapore”.

2006: 2006-5 April: Juliette Koning,” On Being “Chinese Overseas”: the Case of Chinese Indonesian Entrepreneurs”. 2006-6 April: Mads Holst Jensen, “Serve the People! Corporate Social Responsibility (CSR) in China”. 2006-7 April: Edmund Terence Gomez, “Malaysian Investments Transnationalism and the ‘Chineseness’ of Enterprise Development”.

in

China:

2006-8 April: Kate Hannan, “China’s Trade Relations with the US and the EU WTO Membership, Free Markets (?), Agricultural Subsidies and Clothing, Textile and Footwear Quotas”. 2006-9 May: Can- Seng Ooi, “Tales From Two Countries: The Place Brandin g of Denmark and Singapore”. 2006-10 May: Gordon C. K. Cheung, “Identity: In Searching the Meaning of Chineseness in Greater China 2006-11 May: Heidi Dahles, ‘CHINESENESS’ AS A COMPETITIVE DISADVANTAGE, Singapore Chinese business strategies after failing in China 2006-12 June: Émile Kok- Kheng Yeoh, Development Policy, Demographic Diversity and Interregional Disparities in China

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2006-13 June: Johannes Dragsbaek Schmidt, China’s "soft power" re-emergence in Southeast Asia 2006-14 September: Michael Jacobsen, Beyond Chinese Capitalism: Re-Conceptualising Notions of Chinese-ness in a Southeast Asian Business cum Societal Context 2006-15 October: Ng Beoy Kui, The Economic Rise of China: Its Threats and Opportunities from the Perspective of Southeast Asia

2007: 2007-16 February: Michael Jacobsen, Navigating between Disaggregating Nation States and Entrenching Processes of Globalisation. Reconceptualising the Chinese Diaspora in Southeast Asia 2007-17 April: Émile Kok-Kheng Yeoh, Shuat-Mei Ooi, China-ASEAN Free Trade Area: Implications for Sino-Malaysian Economic Relations 2007-18 May: John Ravenhill, Yang Jiang, China’s Move to Preferential Trading: An Extension of Chinese Network Power? 2007-19 May: Peter J. Peverelli, Port of Rotterdam in Chinese Eyes 2007-20 June: Chengxin Pan, What is Chinese about Chinese Business? Implications for U.S. Responses to China’s Rise 2007-21 September: Charles S. Costello III, The Irony of the Crane: Labour Issues in the Construction Industry in the New China 2007-22 October: Evelyn Devadason, Malaysia-China Network Trade: A Note on Product Upgrading

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2007-23 October: LooSee Beh, Administrative Reform: Issues of Ethics and Governance in Malaysia and China 2007-24 November: Zhao Hong, China-U.S. Oil Rivalry in Africa

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